If you're involved in a cash real estate purchase, you need to be aware of new federal reporting requirements from the Financial Crimes Enforcement Network (FinCEN).
Overview of FinCEN’s New Residential Real Estate Rule
FinCEN has adopted a new nationwide rule that requires reporting of certain all cash residential real estate transactions. The rule applies when residential property is purchased by a legal entity or trust, and compliance begins March 1, 2026. The purpose of the rule is to increase transparency and reduce money laundering risks in U.S. real estate.
What transactions are covered
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Applies to all-cash purchases of residential real estate
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Reporting is required only when the buyer is a legal entity or trust
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Purchases by individuals (in their personal name) are not subject to this reporting rule
Who files the report
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The reporting obligation falls on the title company, escrow agent, attorney, or other settlement professional handling the closing
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Buyers using an LLC, trust, or other entity should expect to be asked to provide detailed information so the settlement professional can complete the required filing
What information is reported
The report will include identifying information about:
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The legal entity or trust purchasing the property
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The beneficial owners of that entity or trust
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The buyer and seller
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The property and the nature of the transaction
When reporting begins
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The rule was originally scheduled to begin December 1, 2025, but the effective date has been postponed to March 1, 2026 to allow time for preparation
Why this rule exists
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FinCEN and the U.S. Treasury have identified a higher risk of money laundering in all-cash real estate transactions
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The rule is intended to bring greater transparency to transactions involving legal entities and trusts
Bottom line
If you are buying or selling residential real estate in an all-cash transaction where the buyer is an LLC, trust, or other legal entity, expect new federal reporting requirements and be prepared to provide additional information during the closing process.
And, of course, if this new rule applies to you, give me a call to discuss how to best prepare.
