There was some concern about what would happen to Florida’s luxury real estate market once the United States Treasury’s Financial Crimes Enforcement Network (FCEN) took aim at foreign buyers using shell companies to buy properties.
The goal was to keep foreign buyers from using their ill-gotten gains to purchase property while hiding behind faceless corporate entities. A six-month initial inquiry into the situation indicated that as many as 25% of the cash transactions for real estate in the state could be considered “suspicious.”
Well, Florida property owners and investors don’t seem to have much to fear any longer. Although the expanded program dropped the threshold for disclosure of the buyer’s name on cash transactions for real estate anytime the figure hit $300,000 or more in Florida, it hasn’t slowed down the real estate market in any way.
In fact, the market seems to be drawing in wealthy buyers who don’t mind disclosing their identity or the source of their money when they purchase pricey estates. According to the most recent figures, cash deals account for a third of all real estate purchases in South Florida — with some areas reporting significantly higher percentages of cash deals. For example, Palm Beach saw about 49% of its real estate deals close in cash, while the national average for such deals is just 20%.
Where are the buyers coming from? All over the United States. Florida provides significant tax advantages for property owners, so those with means are sinking that wealth into Florida’s real estate — particularly condos, which can be hard to finance.
Regardless of your economic status or the nature of your real estate purchase, it’s always advisable to have an experienced legal eye look over your transaction before you sign.