Effective December 1, 2025, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) will implement new rules for non-financed residential real estate transfers. The purpose of the rule is to increase transparency to deter domestic and international money laundering.
The rule requires filing of a Real Estate Report electronically with FinCEN if the following conditions are met:
- The property consists of residential real property; and
- The transfer is non-financed; and
- The real property is transferred to a legal entity or trust (not to an individual); and
- An exemption does not apply.
The rule applies to transactions of residential real estate in the United States and all territories.
- Residential real estate is defined as one- to four-family properties, condominiums, cooperatives, apartment buildings, vacant land where the purchaser intends to build a residential structure for occupancy by one to four families and mixed-use properties.
- Non-financed is defined as a transfer that does not involve an extension of credit secured by the transferred residential real property and extended by a financial institution that is subject to anti-money laundering requirements. Essentially, non-financed transfers would include all cash sales, transactions involving private or seller-financing and lines of credit or loans by a bank, mortgage broker or mortgage banker or other source that does not have an anti-money laundering program.
Exempted Transactions
The following transactions are exempt from the new rule:
- A transfer of an easement;
- A transfer resulting from the death of an individual;
- A transfer resulting from a divorce or dissolution of marriage or civil union;
- A transfer to a bankruptcy estate;
- A transfer supervised by a court in the United States;
- A transfer for no consideration made by an individual or with that individual’s spouse to a trust of which that individual, that individual’s spouse or both of them are the settler(s) or grantor(s);
- A transfer to a qualified intermediary; and
- A transfer for which there is no reporting person.
A “primary reporting person” is required to file the Real Estate Report. Typically, the individual who prepares the closing or settlement statement for the transfer would be the reporting person. Attorneys and title insurance agents are deemed to be reporting persons.
The report must be filed by the later date of either (1) the final day of the month following the month in which the reportable transfer occurs; or (2) 30 calendar days after the date of closing of title. The Real Estate Report must contain information about the transaction, including, but not limited to, party names, beneficial owners, purchase price, source of funding and description of the property. Failure to file the report can result in the imposition of significant penalties and fines, and for willful violations, possible imprisonment.
FInCEN will release the final version of the Real Estate Report at a later date. We will update you as new information becomes available.
