New Federal Real Estate Reporting Law Effective March 1, 2026 What Southwest Florida Buyers and Sellers Must Know

New Federal Real Estate Reporting Law Effective March 1, 2026 What Buyers and Sellers Need to Know

Beginning March 1, 2026, a new nationwide reporting requirement issued by Financial Crimes Enforcement Network will change how certain residential real estate transactions are handled. This federal rule, known as the Residential Real Estate Reporting Rule, is part of broader Anti Money Laundering efforts under the U.S. Department of the Treasury.

For buyers and sellers involved in Southwest Florida real estate, especially luxury waterfront homes Southwest Florida buyers frequently purchase through LLCs or trusts, understanding this rule early is critical.

Why This Law Was Created

FinCEN previously relied on temporary Geographic Targeting Orders in select markets. Effective March 1, 2026, those temporary measures are replaced with a permanent nationwide requirement. The goal is transparency in non financed transfers where residential real estate is purchased through an entity or trust without traditional financing.

This matters in markets such as Fort Myers, Cape Coral, Sanibel, Captiva, and Fort Myers Beach where high value cash purchases are common.

When Is a Transaction Reportable

A transaction is generally reportable if all of the following apply:

• It is a non financed transfer such as an all cash purchase
• The buyer is an LLC, corporation, partnership, or certain types of trusts
• The property is 1 to 4 family residential real estate or vacant land intended for residential use
• The transfer does not qualify for an exemption such as inheritance, divorce, bankruptcy, or certain regulated entities

If a buyer is purchasing in their personal name with a traditional mortgage lender involved, the transaction is typically not reportable.

What Information Must Be Reported

For entity buyers, reporting may include the legal name, address, tax identification number, and beneficial ownership information. Beneficial owners are individuals with substantial control or 25 percent or more ownership. Required details may include full legal name, date of birth, residential address, citizenship, and identifying documentation such as a driver’s license or passport.

No beneficial ownership information is required from the seller.

How This Impacts Southwest Florida Luxury and Waterfront Transactions

Many buyers of Sanibel beachfront real estate, Captiva luxury homes for sale, and deep water boating homes Cape Coral often take title in an LLC or trust for asset protection or estate planning purposes. Under the new rule, those cash purchases may require additional documentation and reporting through the BSA E Filing System.

Buyers should expect additional coordination with the title company and potentially modest compliance related fees. FinCEN estimates approximately 2.5 hours of additional data collection for reportable transactions.

For sellers marketing high end Southwest Florida real estate, understanding whether your buyer is an entity and whether financing is involved can help prevent closing delays. Experienced waterfront real estate team SWFL professionals will identify these details early during negotiations.

Penalties for Non Compliance

Civil and criminal penalties may apply for violations, including significant fines for negligence or willful failure to comply. This underscores the importance of working with knowledgeable title companies and trusted SWFL real estate advisors.

Practical Takeaways

For buyers
Decide early how you will take title and prepare entity documentation in advance.

For sellers
Ask early whether the buyer is purchasing in an LLC or trust and whether financing is involved.

For both
Clear communication with your title company and Southwest Florida real estate team is essential.

This blog is for informational purposes only and is based on published FinCEN guidance regarding the Residential Real Estate Reporting Rule effective March 1, 2026. It does not constitute legal advice.

If you are buying or selling in Southwest Florida and want clarity on how this new rule may impact your transaction, contact McMurray and Members today. Call 239.850.7888 or visit www.mcmurrayandmembers.com to speak with our Southwest Florida real estate team and ensure your closing process stays smooth and compliant.