How The Government Plans To Unmask Secret Money Parkers
The US Treasury Department has created a public ownership registry in NYC and Miami in an attempt to unmask secret foreign buyers parking (potentially unsavory) money in US real estate.
In the past five years, $8B worth of ultra-luxury apartments has been bought—three times more than in years past—raising suspicions of money laundering.
A whopping 50% of these have been bought for cash from shell companies, a troubling trend expected to grow in the year ahead. Unlike Swiss banks, developers and lawyers are not required to know who their clients are, making the US a magnet for dirty money, the New York Post reports.
Organizations like the G7, the United Nations and the Organization for Economic Cooperation and Development have been vocal in supporting legislation against money laundering.
The move, which may eventually be rolled out nationally, is intended to introduce more transparency in the luxury real estate market. To date, the enormous influx of cash has inflated US housing levels, spiking the average SF price in New York from $1k to $1,450 in the past five years alone.
But the biggest losers could be luxury developers and wealthy foreigners. Between 2004 and 2013, $1.39 trillion left China while $1 trillion in hidden money left the Russian shores. Meanwhile Mexico produced an outflow of $528B. [NYP]