The Biden administration is targeting all-cash real estate deals due to the nation's home market becoming "a safe haven" for criminal money launderers as part of a crackdown on corruption explored during the U.S. Summit for Democracy.
All-cash real estate deals currently account for about a third of all U.S. homes sales, the National Association of Realtors reported last summer. The non-profit Global Financial Integrity (GFI) estimates that $2.3 billion was laundered through the nation's real estate market between 2015 and 2020.
"Our real estate markets are at risk of becoming a safe haven for criminals, kleptocrats and others seeking to park corrupt profits," Deputy Treasury Secretary Wally Adeyemo said in a Dec. 6 report from Reuters. He noted the current law allows people to anonymously set up companies to conduct all-cash real estate deals and hide where the funds came from.
President Joe Biden signing an executive order in January
| whitehouse.gov/
Compliance costs won't harm small businesses and would amount to no more than $50 per company, Adeyemo said as reported by Reuters.
Adeyemo also outlined what he called "the nuts and bolts of Treasury's plan to combat corruption, promote democracy, and protect the integrity of the financial system” in a statement released Dec. 6 by the Treasury Department. The three major goals of the plan are improving transparency, increasing enforcement and deepening partnerships.
“For too long, corrupt actors have made their home in the darkest corners of the global financial system, stashing the profits of their illegitimate activities in our blind spots,” Adeyemo said in the statement. “A major component of our anti-corruption work is about changing that—shining a spotlight on these areas and using what we find to deter and go after corruption.”
The extra attention paid to all-cash real estate deals is not about targeting those who engage in purchases legally, Adeyemo said in the statement.
"We welcome the White House’s continued focus on money laundering through real estate and look forward to working with the administration in addressing this key national security and corruption issue," GFI President and CEO Tom Cardamone said in a Dec. 8 press release.
The attention on this ‘dark corner’ isn't new. In 2016, the White House pushed to require title insurance companies to report the identities of all-cash homebuyers, according to a separate Reuters report.
