Concerns Arise For Privacy And Anonymity of Legitimate Cash Buyers In Miami Real Estate Market
The U.S. Treasury Department announced plans to disclose and track the identity of buyers completing all cash-transactions for pricey luxury residences in the Miami real estate market. The legitimacy of wealthy buyers of Miami Beach’s priciest luxury condos and homes is questioned as reports indicate the possibility that some buyers may be purchasing property illegally, that is, through investing millions of dirty money. It’s important to note that names of buyers will not be revealed to the public but instead is reported by title Insurance companies to the Federal authorities for investigation.
The government will require insurance companies to uncover the identities of the buyers of any all-cash deals above $1 million in Miami (Dade Country) and above $3 Million in New York City (Manhattan), two of the leading markets for high-end Real estate in the country. South Florida is the number 1 market for cash buyers in the country which has fueled the real estate market with record-breaking sales and a strong economic boom. The news has been received with scrutiny and heavy considerations for the implications for buyers innocent of any wrongdoing and for the possible effect on the market in general.
Many real estate professionals have come out in support for buyers and investors who have nothing to hide and are not guilty of any criminal offense other than valuing their privacy. As of now many real estate industry insiders in South Florida maintain that cash buyers in the Miami Beach real estate market, mainly Latin Americans, usually form shell companies or LLC’s as a private way to purchase real estate to hide and seek a safe haven for their cash amidst government corruption and economic conflict in their own countries.
While government officials may require investigations to identify drug-kingpins and criminals, concerns about privacy and anonymity for legitimate investors have been raised as certain South American buyers may face possibility of being harassed, kidnapped, or shaken down if their identity were to be revealed. Ultra-wealthy foreign buyers and legitimate investors too, who are accustomed to private and exclusive lifestyles for personal and business reasons, often use domestic and offshore companies when buying property to prevent their names from becoming public, not to mention avoiding exposure to more tax liabilities. Celebrities, politicians, athletes and business executives who value their privacy and want to protect their investments and families are wary of giving up their information to the government to be placed under a microscope since their occupations already put them in the public eye. For now the one positive for cash buyers is that the timeframe for the investigations is temporary, starting in March 1st and ending on August 27th, 2016; and the requirements enforced by the government officials does not affect trusts, providing a loophole for investors who still want to invest in Miami’s Real Estate market.