Effective from March 1, 2026, certain transactions in residential real estate now require a federal filing identifying the parties to the transaction. While most real estate transactions will not be subject to these rules, certain common transactions are.
The new rules apply to transfers of residential real property, which under the definition may include bare land on which it is intended to build a residence, to either a trust or a business organization for which there is not traditional bank financing. Sounds rather esoteric, but if you and your spouse own a lake house, and you retitle it into an LLC, then the report will need to be filed. There is no minimum value threshold so certain gifts will require a report. There are a variety of fact specific exemptions including for transfers consequent to the terms of a will.
If a report is to be filed it will identify the property, the transferor, and the transferee entity or transferee trust. In the case of a “transferee entity” its “beneficial owners” as determined under the Corporate Transparency Act will need to be identified. In the case of a transfer of property to a trust each trustee and certain beneficiaries will need to be identified.
Why is this new reporting rule being enacted? The federal government’s Financial Crimes Enforcement Network has determined that cash purchases of residential properties are a favored way of laundering illicit cash. Deposit $250,000 of cash in the bank and it will file a Suspicious Activity Report. Until now if you showed up to buy a house with that cash it would not raise a reporting requirement; now it will.
Just as it did with the Corporate Transparency Act, Stoll Keenon Ogden has positioned itself as a thought leader in this space, and we look forward to helping you navigate these new requirements.
Should you need an in-depth analysis of these rules, SKO’s Tom Rutledge co-authored What Fresh Hell Can This Be? Beneficial Ownership Reporting in Limbo, Bus. Law Today (Dec. 9, 2025) (with Christina M. Houston, Robert R. Keatinge and James J. Wheaton).
