The Financial Crimes Enforcement Network (FinCEN), a division of the US Treasury Department, will again extend the Geographic Targeting Order (GTO) which first went into effect in 2016. This extension will last from November 16, 2018 to May 15, 2019.
The GTO’s purpose is to combat money laundering schemes by identifying individuals behind companies and other entities purchasing real estate. To qualify for reporting under the GTO, a transaction must meet four criteria:
- The property being purchased must be in an area covered by the GTO. In New York, this includes all of New York City’s five boroughs. However, certain counties in Texas, Florida, California, Hawaii, Nevada, Washington, Massachusetts, and Illinois also apply.
- The buyer is a Legal Entity, such as a limited liability company or partnership. It should be noted that, as of the new extension, Trusts are no longer defined as a Legal Entity for the purposes of the GTO.
- The consideration is greater than $300,000.00.
- The purchase price is not paid using any external financing from a financial institution, and is being paid in any part with cash, certified check, personal check, traveler’s check, attorney escrow check, money order, wire transfer, or e-currency.
Any transaction meeting the above criteria must be reported to FinCEN within 30 days of closing.
For more details, you can find the FinCEN website here.