On March 21, 2025, a major shift occurred in the world of real estate investing, and if you own property through an LLC or corporation, this news is especially for you.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) just rolled out a new rule under the Corporate Transparency Act (CTA), and it’s turning heads across the real estate industry.
Quick Recap: What Was the Corporate Transparency Act?
The Corporate Transparency Act was passed in 2021 and went into effect on January 1, 2024. It required most companies, including many LLCs and corporations used by real estate investors, to report their “beneficial owners” to FinCEN. This included anyone who owned or controlled 25% or more of the company or had substantial control over it.
The goal? Combat money laundering, tax evasion, and other illicit activities by increasing transparency in shell companies.
But for everyday investors, the rule raised serious concerns:
- Loss of privacy
- Increased compliance burden
- Risk of fines for misreporting or missing deadlines
If your business existed before 2024, you had until January 1, 2025 to file your first report. For entities formed in 2024, the deadline was 90 days from formation.
So, What Just Changed?
On March 21, 2025, the Treasury issued an interim final rule that changes everything – at least for domestic entities. U.S.-based companies, including real estate LLCs and corporations, are now exempt from these reporting requirements.
That means:
- No more required reports on beneficial owners.
- No more upcoming filing deadlines.
- No more fear of steep penalties for simple mistakes.
This change narrows the scope of the CTA, so now, only foreign entities doing business in the U.S. are required to disclose beneficial ownership.
Why It Matters to Real Estate Investors
This is a major relief if you hold property through a U.S.-based LLC or corporation – a common and smart move in the real estate game.
With the exemption in place:
- You maintain your privacy.
- You save time and money on compliance.
- You avoid legal headaches and reporting missteps.
A Heads-Up for Foreign Investors
If you’re using a foreign entity (say, an offshore corporation or trust) and have registered it to do business in the U.S., you’re still on the hook for CTA reporting. Nothing changes there—FinCEN still expects to see your beneficial ownership reports.
What’s Next?
Even with this exemption in place, it’s smart to:
- Stay tuned for further updates. This is an interim rule, and it could evolve.
- Talk to a lawyer or CPA if you have a complex structure or international ties.
- Keep your entity docs tidy – good recordkeeping is always a win.
This latest CTA ruling is a major regulatory win for real estate investors using U.S.-based entities. With one less layer of paperwork and government oversight to worry about, you’re free to focus on what matters: growing your portfolio.
