It's an open secret that the world's luxury property boom is being driven by crooked rich people in the former Soviet Union, Asia, and Sub-Saharan Africa who have looted their homelands and want to stash the money out of reach of any new dictators who might come along and change which oligarchs are favored and which are not.
This has had the side-effect of transforming housing — a fundamental human need — into a asset-class that's being optimized as safe-deposit boxes in the sky, to the enormous detriment of working people and their quality of life — not to mention what it does to the poor. It also creates its own crime boom.
Now the US Treasury is demanding that the actual owners of million-dollar-plus properties in Miami and NYC be disclosed, realtors are predicting a crash in luxury property, tacitly admitting that they are engaged in money-laundering that can only work if they can disguise the identities of their paymasters.
The UK Tories claim they'll do the same in London, but it might be simpler to create a registry of all the luxury properties that aren't owned by criminals.
"We are seeking to understand the risk that corrupt foreign officials, or transnational criminals, may be using premium US real estate to safely and secretly invest millions in dirty money," Jennifer Shasky Calvery, director of the Financial Crimes Enforcement Network, a unit of the Treasury Department running the initiative, said in a statement. "Over the years, our rules have evolved to make the standard mortgage market more transparent and less hospitable to fraud and money laundering. But cash purchases present a more complex gap that we seek to address."
The new, temporary policy, which runs from March through August, will require title insurance companies to identify buyers' identities and report those names to the federal government. The names of buyers will not be made public. The requirement applies to buyers who pay $1 million or more in cash for homes in Miami-Dade and $3 million or more in cash for homes in New York.
Are luxury condo purchases hiding dirty money? (+video)
[Husna Haq/Christian Science Monitor]