There is a new reporting rule as of March 1, 2026 for the United States Government for certain residential property transfers if there is no financing involved in a transaction.

The FinCEN Rule applies to residential real estate transfers that are the following, (according to the National Association of REALTORS(R) article about the rule):

(a) “Non-financed” (meaning there is no mortgage or financing by a regulated institution subject to the Bank Secrecy Act with anti-money laundering and Suspicious Activity Report requirements);
(b) Transferred to a legal entity or trust (this means the real estate is transferred to an LLC, corporation, or trust); and
(c) Not subject to an exemption. Several transfers are exempt from reporting under the Rule including transfers resulting from a death, transfers incident to divorce, transfers supervised by a U.S. court, transfers to a qualified intermediary (i.e. a “1031 exchange”), transfers to a bankruptcy estate, transfers with no consideration to a trust where an individual is the settlor(s) or grantor(s), and transfers and grants via an easement or revocation of an easement.

Under the Rule, reporting is triggered when there is a non-financed transfer of real estate to a covered transferee entity or transferee trust of an ownership interest in real estate. A transferee entity may be a corporation, partnership, estate, association, or limited liability company.

What does this mean? Many home sales, if there is no financing (meaning the buyer is not getting a mortgage) and if the buyer is buying the property via LLC, corporation or through a trust, specific information may need to be reported to the government by the involved parties.

In Maryland, this reporting most likely would be done by the title company who handles the closing, but there is certain information they would need from both the buyers and sellers of the property to complete the required reporting.

What information needs to be reported? Again, (and thank you to the National Association of REALTORS(R) article about the rule), the following information would need to be reported:

Under the Rule, both buyers and sellers should provide information to the reporting person. Individual transferors (sellers) are required to report name, date of birth, address, and tax identifying number (e.g., an Internal Revenue Service SSN). Entity and trust transferors are required to provide names, trade names, tax identifying number, addresses, and trust information. Transferee (buyer) trusts and entities are required to provide information about the entity/trust including names, addresses and tax identifying number.

The Rule also requires disclosure of information about the beneficial owners of the transferee (buyer) entity or trust, including names, dates of birth, citizenship, and tax identifying numbers (e.g., SSNs). Entity beneficial owners are those individuals who own or control, directly or indirectly, at least 25% of the entity. An individual’s ownership can be held, for example, through joint ownership with another person such as a spouse, via a nominee or agent, or by virtue of being a trustee of a trust with certain powers of the trust assets. The ownership interest can be an interest in equity or stock, a profits interest, a convertible instrument, or a put or call option.

In addition, beneficial owners are also those individuals who, directly or indirectly, exercise substantial control over the entity. This may include, but is not limited to, persons acting as board members for the entity, having rights associated with financing arrangements in the entity, as well as formal and informal business arrangements. For example, FinCEN treats senior officers of the entity and persons having substantial influence over important decisions made by the entity (e.g., major expenditures and compensation) as persons exercising substantial control.

Here is a link to more information directly from the Financial Crimes Enforcement Network about the FinCEN requirements.

Please note that the above information is for informational purposes only. The above information should not be taken as legal advice. I am not a financial advisor. I am not a tax advisor. I am not an attorney.

If you have questions about the FinCEN requirements, please contact your attorney.