What is FinCen?
FinCen is a bureau within the U.S. Department of the Treasury, tasked with safeguarding the U.S financial system, and countering money laundering, along with the financing of terrorism. FinCen created quite a stir last year when it began to require that newly formed small businesses file a beneficial ownership report (BOI).
What’s new?
Originally scheduled to take effect on December 1, 2025, but now delayed until March 1, 2026, FinCen is now requiring the filing a Residential Real Estate Report. This report is to be filed using FinCen’s BSA E-filing system.
What transactions are subject to reporting?
Residential transfers are reportable only for single family homes or other residential units designed to be occupied by one to four families. But reporting is required for transfers of raw land designed for the building of a residential unit are included, as are developments having a commercial component, such as a living unit above a commercial store.
In addition, the reporting requirements are limited to non-financed transactions. If a lender is involved in the transaction, no report is required. And of course, the real estate must be within the United States.
Are there transfers that are not considered reportable?
Yes. Here’s the list that comes from FinCen’s website:
The following transfers are not reportable:
- A transfer that is a grant, transfer, or revocation of an easement.
- A transfer resulting from the death of an individual, whether pursuant to the terms of a will, the terms of a trust, the operation of law (such as transfers resulting from intestate succession, surviving joint owners, and transfer-on-death deeds), or by contractual provision (such as transfers resulting from beneficiary designations).
- A transfer incident to divorce or dissolution of a marriage or civil union (such as transfers required by a divorce settlement agreement).
- A transfer made to a bankruptcy estate.
- A transfer supervised by a court in the United States.
- A transfer for no consideration made by an individual, either alone or with their spouse, to a trust of which that individual, that individual’s spouse, or both, are the settlors or grantors.
- A transfer to a qualified intermediary for the purposes of a like-kind exchange for purposes of Section 1031 of the Internal Revenue Code.
- A transfer for which there is no reporting person.
This means most of the transfers done as a part of estate planning are not reportable.
Any good news here?
Yes. Generally, buyers and sellers are not reporting persons. Reporting persons are generally those associated with the closing process, such as closing agents, title company employees, title insurers and escrow agents. So even though the details are being disclosed to this part of the federal government, you will not be required to do the reporting as a buyer or seller.
Got questions? If so, please feel free to reach out to us about this new reporting requirement.