Acting on the growing unease of flows of undeclared money surging into luxury real estate developments, the U.S. Treasury Department has said that it would begin identifying and tracking undisclosed buyers.
The program will commence in two of the United States major destinations for global wealth, namely Manhattan and Miami.
The aim is to clarify who is behind all-cash purchases made by shell companies that often screen purchasers’ identities.
Strong sales of luxury properties
The federal government action is likely to send tremors through the top tier players in the real estate industry. In the past few years the arrival of wealthy global clients into the U.S. market has seen a boom in high end luxury developments.
Chinese, Russian and Middle Eastern UHNW's have been aggressive buyers of ultra luxurious condominiums in Manhattan and Miami, bringing good times for the agencies.
Virtual safe deposit boxes
The initiative is part of a broader federal effort to increase the focus on money laundering in real estate. Treasury and federal law enforcement officials said they were putting more emphasis into investigating luxury real estate sales that involve shell companies like limited liability companies, often known as L.L.C.s; partnerships.
«We are concerned about the possibility that dirty money is being put into luxury real estate,» said Jennifer Shasky Calvery, the director of the Financial Crimes Enforcement Network, the Treasury unit running the initiative.
