FinCEN’s New Rule: How It Impacts Residential Real Estate Transactions in Texas
By: James Walker, Associated Broker Keller Williams Realty walkertxteam.com
2/4/2026
The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) has introduced a new rule that directly impacts certain residential real estate transactions across the United States — including here in Central Texas. While the rule is designed to combat money laundering and financial crime, it also introduces new compliance and disclosure requirements that buyers, sellers, and real estate professionals need to understand.
At the Walker Texas Team, we believe informed clients make better decisions. This guide breaks down what the new FinCEN rule means, who it affects, and how it may impact residential real estate transactions throughout Hays County, Comal County, Guadalupe County, Caldwell County, and the surrounding Hill Country.
What Is FinCEN and Why Does It Matter in Real Estate?
FinCEN (Financial Crimes Enforcement Network) is a bureau of the U.S. Department of the Treasury responsible for preventing money laundering, tax evasion, and illicit financial activity. Historically, many real estate transactions — particularly those involving LLCs, trusts, and other entities — allowed ownership to remain opaque.
FinCEN’s new rule is designed to increase transparency in real estate ownership, especially in transactions where property is purchased or held through business entities rather than individuals.
Overview of the New FinCEN Rule
The new FinCEN rule focuses on beneficial ownership reporting in residential real estate transactions. Its primary goals are to:
- Identify the real individuals behind entity-owned properties
- Reduce the use of real estate for hiding illicit funds
- Create consistent reporting standards across states
This rule is especially relevant in high-growth real estate markets like Central Texas, where investors frequently use LLCs and trusts for asset protection and tax planning.
Who Is Impacted by the FinCEN Real Estate Rule?
The rule does not affect every residential transaction. It primarily impacts deals involving entities rather than individual buyers.
Transactions Most Likely to Be Affected:
- Residential purchases by LLCs, corporations, or partnerships
- Homes purchased or held in trusts
- Investment properties and second homes
- Certain 1031 exchange structures
- Cash or non-traditional financing transactions
Parties Impacted:
- Buyers and sellers using entities
- Real estate investors
- Title companies and real estate attorneys
- Lenders and financial institutions
- Real estate agents facilitating entity purchases
What Is Beneficial Ownership Reporting?
Under the new FinCEN rule, certain residential real estate transactions must disclose beneficial owners, meaning:
- Individuals who own 25% or more of an entity
- Individuals who exercise substantial control, even without majority ownership
This information goes beyond what appears on a deed or title commitment and is reported directly to FinCEN.
Why This Matters for Texas Real Estate Buyers and Sellers
Texas is known for being business-friendly, and many buyers use LLCs for privacy, liability protection, and estate planning. While those benefits remain, the new FinCEN rule introduces additional steps that must be handled properly to avoid:
- Closing delays
- Compliance issues
- Potential civil or criminal penalties for inaccurate reporting
In fast-moving markets like San Marcos, New Braunfels, Kyle, Buda, Wimberley, and the Texas Hill Country, preparation is key.
How the Rule Affects Residential Real Estate Transactions in Central Texas
- More Documentation During Escrow
Entity buyers may need to provide ownership details earlier in the transaction.
- Increased Role of Title & Legal Teams
Title companies and real estate attorneys will play a larger role in ensuring FinCEN compliance.
- No Change for Most Traditional Buyers
Individual buyers purchasing a primary residence in their own name are typically not impacted.
Real-World Examples
Example 1: LLC Investment Property
An investor purchases a rental home in San Marcos using an LLC. Beneficial ownership must be reported to FinCEN before or at closing.
Example 2: Trust-Owned Hill Country Home
A trust acquires a residential property near Canyon Lake. Trustees and beneficiaries may need to be disclosed under the rule.
Example 3: Entity-Based 1031 Exchange
A 1031 exchange using an entity structure may require additional reporting, even though the exchange remains tax-deferred.
What Buyers and Sellers Should Do Now
✅ Ask Early Questions
If an entity is involved, clarify ownership structure before signing a contract.
✅ Work With Experienced Professionals
Choose real estate agents, title companies, and attorneys familiar with FinCEN real estate compliance.
✅ Avoid Surprises at Closing
Early disclosure helps prevent last-minute delays that can derail a transaction.
Why Working With the Walker Texas Team Matters
Led by James Walker, a native Central Texan with extensive experience in residential and investment real estate, the Walker Texas Team understands both the local market and the evolving regulatory landscape.
Our team helps clients:
- Navigate entity purchases and disclosures
- Coordinate with title and legal professionals
- Structure transactions smoothly and compliantly
- Protect timelines and investment goals
Bottom Line: FinCEN Is About Transparency, Not Stopping Deals
The new FinCEN rule doesn’t prevent residential real estate transactions — it simply requires greater transparency in certain deals. Buyers and sellers who plan ahead and work with knowledgeable professionals can move forward confidently.
If you’re considering buying or selling a home using an LLC, trust, or other entity in Central Texas, the Walker Texas Team is here to help you navigate the process smoothly.
If you have more questions do not hesitate to call me at 512-396-7325. Of course, you can always visit https://walkertxteam.com to send a message or question.
