The Manhattan real estate buyers seem to have been enjoying the luxurious pedestal until the implementation of the new federal disclosure requirements. The Real Deal reports that the buyers' shielded with limited liability corporations purchased properties will be in a hot seat this March 2016.
Would this probably be the end of anonymous buyers in Manhattan real estate? Well, unless you are good at financial gymnastics, then, you're probably dead.
It can be recalled that the U.S. Treasury revealed on Jan. 14 that they would start keeping track on Manhattan's cash purchases through shell companies. This initiative aims to uncover the illicit funds paid through New York real estate and will be implemented beginning in March this year. By then, deals over $3 million will be tracked, requiring their title insurance companies to divulge the buyer's identity to the government.
The New York Times said the "veil of secrecy" around high-end real estates will then be removed with this new change. However, such change cannot guarantee a good real estate financial state in the country. US Real Practice Group for law firm head, Withers Bergman, shared via Real Estate Weekly Online that he personally doesn't see the new rule helping the city but he sees how it could hurt the country instead. Worst, it can negatively affect the foreigners' investment, he added.
While this may sound a threat to buyers who want to keep themselves private, The Real Deal admits this order can actually be avoided in three ways.
Wait half a year
Real estate experts suggest that waiting for six months before making a purchase is a good idea, noting that this new LLC Disclosure Law takes effect on March 1 and will just expire on Aug. 27.
Buy another property
As mentioned in the outset, this new order will only take effect on properties over $3 million. Thus, buyers can still invest on properties below that without having to divulge themselves. Commercial properties are a good pick as The Real Deal suggests.
Use wire transfer when paying
Remember, the scrutiny is only undergone by those buyers who pay in cash or bank check. So, paying with a wire transfer can save one from being affected with this new LLC disclosure law.
