May 27, 2018

Could New Disclosure Rules Delay Luxury Sales?

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Could New Disclosure Rules Delay Luxury Sales?

Last week, the government announced that it will require all-cash high-end home buyers in Miami and Manhattan to disclose their identities to the government, which some industry insiders say could cool the ultra-luxury market.

Read more: Foreign Investors See Big Opportunity in US

Four large title companies — First American, Fidelity National, Stewart and Old Republic will soon need to disclose the identities of cash buyers who pay more than $1 million for properties in Miami and more than $3 million in Manhattan, if their ownership of a property is at least 25 percent, under the new rules from the Treasury Department. The temporary regulations will run March 1 and will end Aug. 27. The government may then decide to expand the program to more markets.

The Treasury Department says it’s the first step to try to crack down on criminals who may be stashing illegal money in U.S. real estate.

“Shady people find other ways of getting things done. Let’s be real,” Samantha DeBianchi, a luxury  broker in Miami and star of Bravo’s Million Dollar Listing Miami, told Forbes in talking about the new regulations.

The new regulations could discourage some legitimate buyers, some real estate professionals note.

It also leads to several other questions: “How does this affect costs? Will it delay closings?” Wayne Stanley, director of public affairs at the American Land Title Association, whose members include the title companies that will be affected by the new guidelines, told Forbes. “Unfortunately we don’t have the answers on that yet.”

Source: “Treasury’s New Disclosure Regulations for All-Cash Buyers Could Slow High-End Property Deals,” (Jan. 14, 2016)