New Federal Real Estate Reporting Rules Take Effect December 1, 2025
On December 1, 2025, a new set of nationwide regulations will permanently change how certain real estate transactions are reported in the United States. These rules replace the temporary Geographic Targeting Orders (GTOs) that have been in place since 2016 and expand reporting requirements to cover the entire country.
If you are buying, selling, or transferring property through a legal entity or trust, here’s what you need to know.
From Temporary Orders to a Permanent Rule
For nearly a decade, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has monitored potential money laundering in real estate through Geographic Targeting Orders.
GTOs applied only to 13 major metropolitan areas, including Los Angeles, San Francisco, New York, and Miami.
- They targeted all-cash purchases of residential property by legal entities (such as LLCs, corporations, or partnerships).
- Title and escrow companies were required to file reports identifying the beneficial owners — the real people behind these entities.
Starting December 1, 2025, the new nationwide regulation makes these requirements permanent and expands them across all U.S. markets.
What Changes Under the New Rule
Here’s what buyers, sellers, and escrow agents can expect:
Every U.S. residential property transfer involving a legal entity or trust must now be reported, not just those in designated cities.
Mandatory Reporting by Escrow/Settlement Agents
Escrow and settlement professionals will be responsible for filing reports with FinCEN. These reports will include:
The identity of beneficial owners (those who own or control the purchasing entity or trust).
- Property details, purchase price, and method of payment.
- The structure of the entity or trust.
Exemptions
Not every transaction is covered. Exemptions include:
Purchases involving a traditional mortgage, since lenders already collect detailed borrower information.
- Transactions with certain government entities or publicly traded companies.
- Some transfers already regulated under federal financial laws.
Implementation
Unlike GTOs, which were renewed every six months, this rule is permanent. The reporting requirement will now be a standard part of the closing process for covered transactions.
for Buyers and Sellers
The goal of the new regulation is to increase transparency in real estate and reduce the risk of illicit funds entering the housing market. But it also has practical implications:
- For Buyers Using Entities or Trusts: Expect additional paperwork and disclosure requirements. Anonymity in property ownership will be harder to maintain.
- For Sellers: Escrow may take longer, particularly if the buyer is purchasing through a trust or LLC, as additional documentation must be collected and verified.
What This Means for Coastal Sonoma & Mendocino Counties
In luxury and coastal markets like ours, it is common for buyers to use trusts or LLCs for estate planning and privacy reasons. Under the new rule, these purchases will now require full reporting to the federal government.
As a result, we anticipate:
- Longer escrow timelines for certain transactions.
- More emphasis on working with experienced escrow and settlement agents familiar with compliance.
- A need for buyer education to avoid surprises at closing.
More Information
- FinCEN – Real Estate Reporting Rule
- National Association of Realtors (NAR) – Policy Updates
- U.S. Treasury – Financial Crimes Enforcement Network
Final Thoughts
The new rule represents one of the most significant changes to real estate reporting in recent years. While designed to curb money laundering and increase transparency, it also affects how transactions are structured and closed.
At Kennedy & Associates, we stay ahead of these regulatory changes so we can guide our clients through a smooth transaction. Whether you are buying through a trust, selling a property, or simply planning your estate strategy, we are here to help you navigate these new requirements
