Reported by Keith Griffith

The U.S. Treasury Department has issued a new rule that aims to prevent nefarious actors from using residential real estate deals for money laundering.

The final rule issued on Wednesday will require real estate professionals to report the true identity of all-cash homebuyers who use shell companies or other legal entities to purchase residential property in the U.S. While those buyers can remain publicly anonymous, the rule requires the disclosure of their identity to the Financial Crimes Enforcement Network.

The purpose of the new rule is to prevent illicit actors such as drug cartels, international criminals, or sanctioned foreign oligarchs from laundering money through the housing market using anonymous transactions. Similar reporting rules already apply to banks and other mortgage lenders.

“The Treasury Department has been hard at work to disrupt attempts to use the United States to hide and launder ill-gotten gains,” said Treasury Secretary Janet L. Yellen in a statement. The new requirements will “close critical loopholes in the U.S. financial system that bad actors use to facilitate serious crimes like corruption, narcotrafficking, and fraud.”

A separate final rule that the Treasury Department also issued on Wednesday adds certain investment advisers to the list of financial professionals who are required to notify FinCEN about suspicious transactions.

The new reporting rule for all-cash real estate deals will take effect on Dec. 1, 2025, while the new rule for investment advisers kicks in on Jan. 1, 2026.

Read full report: https://www.realtor.com/news/real-estate-news/anti-money-laundering-rules-cash-real-estate/