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The names of some wealthy property owners in New York City will soon be made public under a new state law signed last month by Gov. Andrew Cuomo. In response to reports of illegal home conversions in Rockland County, state lawmakers drafted a bill to prevent buyers from purchasing homes through limited-liability companies. The new law requires the name and address of each member of the LLC for both buyers and sellers in New York State. According to the Wall Street Journal, the change in law may affect buyers of Manhattan real estate who wish to remain undisclosed.
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A federal program designed to root out dirty money in real estate was drastically expanded Thursday, and will now apply to even more cash-deals in more cities. As of last week, all real estate purchases made through a limited liability company at or above $300,000 in 12 metropolitan area will be subject to the disclosure rules, known as the Geographic Targeting Orders, including New York City. The threshold previously varied across cities, starting at $3 million in Manhattan and $1.5 million in the city’s other four boroughs, as first reported by the Real Deal. Virtual currency deals are now subject to the disclosure rules as well.
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Will new federal regulations aimed at clamping down on shell companies buying luxury real estate send a chill through Manhattan’s high-end real estate market? The reaction to a page one article in the New York Times last month suggests fear is in the air. But that fear may be misplaced for two reasons: firstly, the Treasury Department’s database of buyers’ names will not be public, as many have inferred; and secondly, in New York, title insurance is not mandatory when you’re making an all-cash deal.
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