New Federal Rule Targets Money Laundering in Residential Real Estate

Criminals, corrupt officials, and terrorists have exploited legal entities and trusts to launder money via real estate deals, the U.S. Treasury said.

Rows of homes in the Sunset District in San Francisco on Feb. 20, 2023. Justin Sullivan/Getty Images

A new reporting requirement aimed at cracking down on unlawful funding in the residential real estate sector has been introduced by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

The rule, which will take effect on Dec. 1, 2025, requires individuals involved in real estate closings and settlements to report on transfers deemed “high risk for illicit financial activity” by the Treasury Department, according to an Aug. 29 Federal Register notice.