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Money Laundering in the Real Estate Market

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The International Convention on Data Sharing has made it possible for national tax authorities, including individuals hiding behind offshore companies, to access numerous bank account information worldwide.

This has made the purchase of real estate all over the world even more prominent. Because money laundering is very well regulated throughout the world (banks should theoretically report extraordinary cash movements above $ 3.6 million, money transfers over $ 500,000 already require identification, and no more than $ 10,000 can be transferred across the border without notice, etc.), while the real estate market around the world is a hotbed of money laundering.

They set up an offshore company


Chinese party functionaries, Russian mafia players, Colombian drug dealers and everyone else in the real estate market are laundering their money. They set up an offshore company in, say, Belize, which buys a select property in London, Vancouver, or Miami.

There were 1.2 million real estate transactions in the UK last year, of which only 335 were found to be suspicious of either the seller or the buyer. While it is estimated at £ 100 billion per year, the amount that is being laundered on the real estate market alone in the UK.

Amount has been rising ever since


And that amount has been rising ever since many countries are no longer able to hold anonymous money in banks due to the launch of the aforementioned international data exchange agreement in 2017. You can’t even have tens of thousands of euros in a bank on the other side of the globe, while you can own real estate worth millions of dollars in any country.

Property owners are nowhere reported to foreign tax authorities


Thus, not only luxury real estate, but also cheaper houses and flats, foreign buyers appeared, who want to save their money from banks that have become too transparent.