I want to inform our clients and partners about important new federal regulations that will impact certain residential real estate transactions. The Financial Crimes Enforcement Network (FinCEN) has issued a final rule that creates new reporting requirements for non-financed transfers of residential real property to legal entities or trusts.
Effective Date: The new rule will take effect on December 1, 2025.
Scope: The reporting requirements apply to transfers of residential real property, including:
Reportable Transactions: The rule focuses on non-financed transfers of residential real property to legal entities or trusts.
Reporting Responsibility: The rule establishes a "cascading" system to determine who must file the report, typically falling to professionals involved in closing or settlement functions.
Information to be Reported: The required "Real Estate Report" will include details about:
Reporting Deadline: Reports must be filed by the later of:
Exemptions from Reporting: Exemptions are provided for certain common, lower-risk transfers. A reportable transfer does not include:
While this new rule primarily affects those directly involved in closing and settlement functions, it's crucial for all real estate professionals to be aware of these changes. The regulation aims to increase transparency in the U.S. residential real estate sector and combat potential illicit financial activities.
What This Means for Our Clients
If you're considering purchasing residential property through a legal entity or trust without traditional financing, be prepared to provide more detailed information about the ownership structure. This may include:
At Bigueur Realty Group Inc., we are committed to staying informed about regulatory changes that affect our industry and our clients. While we may not be directly responsible for filing these reports in most cases, we will work closely with closing agents, title companies, and legal professionals to ensure smooth transactions that comply with all applicable regulations.
As we approach the implementation date, we will provide updates and additional information to help our clients navigate these new requirements. If you have any questions about how this might affect your real estate transactions, please don't hesitate to reach out to our team.
Remember, these regulations are designed to protect the integrity of the real estate market and prevent potential misuse of property transactions for illicit purposes. By working together and staying informed, we can contribute to a more transparent and secure real estate environment for all.
Read the full FinCEN post here:
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