Feb 24, 2026
Starting March 1, 2026, The Financial Crimes Enforcement Network or FinCEN requires additional disclosures from a specific type of real estate buyer: those using cash for privacy (1).
The new rule specifically targets transactions where the purchase is not financed (the buyer doesn’t require a mortgage or loan) and the buyer is a legal entity or trust. Think Limited Liability Corporations (LLCs), corporations, partnerships and trust funds that are acquiring condos, homes or even vacant land for the benefit of someone who wants to remain anonymous.
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Here’s why the government is rolling out this hyper-specific rule and what you can do before March 1 if you think your transaction falls into this category.
Clamping down on “the illicit use of residential real estate”
According to FinCEN, “The illicit use of residential real estate threatens U.S. economic and national security and can disadvantage those that seek to compete fairly in the U.S. real estate market.”
In other words, it’s relatively easy for bad actors to hide their money in property, especially when there is no loan involved.
Nearly 20% to 30% of all real estate transactions across the country were completed in cash, according to the U.S. Treasury department’s 2024 National Money Laundering Risk Assessment (2). Because no bank or mortgage lender is involved in the deal, these purchases sidestep the standard anti-money laundering checks that regulated financial institutions are required to perform.
Not all cash transactions are illegitimate, but this lack of oversight makes them a preferred option for bad actors.
The scale of the problem came into sharp focus with the 2021 Pandora Papers, which uncovered 206 trusts based in the U.S. holding over $1 billion in assets and spanning 41 countries, according to the ICIJ (3). Roughly 30 of these trusts are tied to allegations ranging from fraud and bribery to human rights violations.
To address this problem, the new “final residential real estate rule” was developed under the Biden-Harris administration’s U.S. Strategy on Countering Corruption (4). It’s designed to create a papertrail that helps identify the ultimate beneficiary of any real estate transaction, even when financing isn’t involved.
Unfortunately, this also creates an added regulatory burden for legitimate buyers using cash for privacy or estate planning purposes. However, there is a legal workaround for those who still want to use cash while retaining anonymity.
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Exceptions to the rule
FinCEN carved out several exemptions for lower-risk, routine transactions.
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Examples include transfers resulting from death (whether by will, trust, or operation of law), divorce or dissolution of marriage, bankruptcy proceedings and court-supervised transfers are all excluded from the reporting requirement. So are 1031 like-kind exchanges conducted through a qualified intermediary.
But the most significant exception — and the one real estate attorneys are already advising clients to understand — involves no-consideration transfers to a grantor trust.
Specifically, FinCEN exempts a transfer made for no consideration by an individual, either alone or with their spouse, to a trust of which that individual or their spouse is the settlor or grantor. In plain English: if you already own the property and simply deed it into your own revocable living trust without any money changing hands, that transfer is not reportable.
These exceptions may allow you to complete a cash transaction with the anonymity shield while still being compliant with FinCEN’s new rule. However, the penalties for non-compliance and errors can be severe, so make sure you prepare yourself before the March 1 deadline.
What to do before March 1
If you’re planning to buy real estate with cash via a corporate structure or trust, make sure you contact a legal expert or real estate attorney to figure out your compliance obligations. Even if you believe your transaction may be one of the exceptions listed on the FinCEN website, a legal advisor should help you navigate this transaction to reduce risk.
Have all detailed beneficial ownership information, including names, dates of birth, addresses, taxpayer identification numbers and citizenship details, for anyone behind a purchasing entity or trust, ready for your lawyer or title company to use (5).
For property investors, regulators have a clear message: If you’re buying real estate in cash, Uncle Sam now wants to know exactly who is behind the deal.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Financial Crimes Enforcement Network (1, 4); The Department of the Treasury (2); International Consortium of Investigative Journalists (3); Strategy Law LLP (5)
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
