According to industry players, the new rules are meant to serve as a dragnet for offenders, but might very well end up spooking legitimate international and billionaire buyers instead.
“There are people that for whatever reason probably won't buy apartments right now because of these new Treasury laws. I think there will be some lost business associated with this,” Elliman broker Raphael De Niro told Curbed.
“A wealthy individual isn't going to risk ending up on a list somewhere. They can wait six months,” added Jonathan Miller, president of a property appraisal firm.
The Treasury’s geographic targeting orders would compel title companies to identify and disclose the actual individuals who are making all-cash purchases of properties worth at least, and greater than, $3 million and $1 million in Manhattan and Miami, respectively
Big buyers aren’t the only ones that would be affected by the changes, which would go into effect on March 1 and will last until August 7. Luxury brokers and those who are looking to offload their properties are also at risk.
“Additional regulation is the last thing that we need to hurt potential business that really creates jobs for American workers. This is another layer of difficulty that is going to potentially hurt further development,” Extell president Gary Barnett said, noting that criminal elements are more likely to funnel dirty money into artwork, jewelry, and gold than into real estate.
The U.S. Treasury’s recent announcement of its intent to crack down on money laundering conducted by unscrupulous individuals through high-cost real estate transactions has sent brokers and would-be sellers into a panic.