Since becoming legal in New York State in 1994, LLCs — hybrid entities that provide a shield against liability and offer several tax advantages — have become one of the most dominant ways to buy property in the city.
A new analysis of recorded sales by The Real Deal shows that 7,319 real estate deals in the five boroughs in 2018’s first half involved an LLC. Among commercial properties, that accounts for 65 percent of all sales across the city and 71 percent in Manhattan, up from 30 percent and 49 percent in 2003. And in Manhattan’s luxury residential market, 72 percent of condominium sales over $10 million involved an LLC in the same time span — up from 20 percent 15 years ago.
The overall share of LLCs in New York property deals, meanwhile, has steadily risen for more than two decades, as they’ve ascended to become the real estate industry’s favorite investment vehicle.
Though the use of these shell companies is mostly driven by legal and tax benefits in the commercial realm, a common motivator in New York’s posh residential sector is invisibility. Anonymous ownership allows wealthy foreign buyers, celebrities and now even embroiled politicos like Michael Cohen and Paul Manafort to fly under the radar when buying luxury homes.
But while LLCs let investors safely accumulate more assets and block creditors and others from going after their holdings, that has come with some notable social costs.
Among other red flags, federal law enforcement is increasingly tying international money laundering to the use of shell companies and real estate. And anonymous spending on elections has increased over the years, particularly in New York, where a campaign finance loophole allows real estate and other business owners to make virtually unlimited political contributions by using LLCs.
4 comments:
"Among other red flags, federal law enforcement is increasingly tying international money laundering to the use of shell companies and real estate.'
-This is what will eventually do-in that bastard in the White House. He may finish his term but in a little over two years he'll face indictment.
We have allowed the interests of wealth and power to dominate over the interests of average Americans with the threat of the "seventies coming back" -if the wealthy don't get their way.
Result: soaring homelessness -not just here but nationwide and rents that drain resources and eliminate the savings that would allow ownership.
During the last capitalist meltdown 2007-9 speculators were allowed to buy up the crashed dreams of others and now hundreds of thousands of houses are just another rent trap for those permanently priced out.
THAT'S the result 37 years of Reaganomics -yet the bill-of-goods still sells with just a wave of the flag.
Rob in Manhattan
“The more corrupt the state, the more numerous the laws.”
― Tacitus, The Annals of Imperial Rome
Why do we need ever more forms of incorporation?
Hmm. Maybe I should incorporate myself.
@Tommy
I did, hence my handle.
Post a Comment