Property

Farmers already face an onslaught of challenges: fluctuating markets, unpredictable weather, labor shortages, equipment breakdowns, regulatory demands, and tight finances. Federal financial crime regulations do not usually rank high on their list of concerns. 

Today, we are focusing on exactly that – a new rule from the Financial Crimes Enforcement Network (FinCEN). 

The positive news is that FinCEN’s Residential Real Estate Reporting Rule (RRE Rule), which takes effect March 1, 2026, is unlikely to impact most routine farm operations. 

That said, it is worth raising awareness about these new requirements and alerting farmers to potential new fees and requirements that could arise in connection wither their next residential real estate transaction.

Background
You may recall the name FinCEN from last year’s significant developments surrounding the beneficial ownership information (BOI) reporting requirements for owners of domestic companies under the Corporate Transparency Act. That issue generated considerable attention and debate. 

Now, FinCEN is back in the headlines, this time targeting residential real estate transactions. The RRE Rule was finalized to increase transparency in non-financed transfers of residential property. Simply, the rule aims to curb money laundering by mandating the reporting of beneficial ownership information (BOI) for the owners of businesses (such as LLCs or corporations) or trusts involved as buyers or “transferees” of residential property without a traditional mortgage or bank financing. 

Law enforcement officials believe that all-cash or other non-financed transactions can sometimes serve as vehicles for concealing illicit funds. By requiring the reporting of BOI, they aim to uncover the true individuals behind these legal entities or trusts, ultimately helping to identify, disrupt, and prevent such money laundering schemes. 

When Does the RRE Rule Take Effect? 
March 1, 2026.

What Transactions Must Be Reported? 
Transfers of property are reportable when they meet all of the following criteria: 

• The property is residential.
  • This includes single-family homes, townhouses, condominiums, cooperatives, and apartment buildings designed for 1-4 families.
• ​​​​The transfer is non-financed. 
  • This means there is no mortgage or loan from a financial institution that is already subject to anti-money laundering laws. 
• ​​​​​​​The purchaser of the property is a legal business entity or trust.  
  • This rule does not apply to purchases made by individuals. 
• No exemption applies (see below).

Who Files the Report? 
The best news about this new reporting rule? The buyer (or “transferee”) of the property is not responsible for reporting the BOI to FinCEN (unless they happen to be one of the specific professionals listed in the cascade below). 

Instead, FinCEN assigns reporting responsibility through a structured “reporting cascade.” This hierarchy identifies common real estate professionals involved in property transfers and ranks them in order of priority. The obligation falls on the first applicable professional in the sequence. Professionals can also enter into a written designation agreement to shift the responsibility among themselves for added flexibility and/or convenience.

The cascade order is as follows: 

1. The person listed as the closing or settlement agent on the closing or settlement statement. 
2. If none, the person who prepared the closing or settlement statement. 
3. If none, the person who records the deed.
4. If none, the title insurance underwriter.
5. If none, the person who disburses the greatest amount of funds in connection with the transfer. 
6. If none, the person who evaluates or provides the title evaluation (e.g., Title Examiner, Attorney, Title Agent/Company).
7. If none, the person who prepared the deed.

When Must the Report Be Filed? 
The Real Estate Report must be filed within: 

1. 30 calendar days after closing; or 
2. By the last day of the next month following the month closing, whichever gives the most time. 

What Information is Reported? 
The reporting person must provide information about the transfer of residential property identifying the following: 

• The reporting person
• The entity or trust receiving ownership of the property
• The beneficial owners of the purchasing entity or trust
  • This includes a beneficial owner’s full legal name, date of birth, current residential address, citizenship, and a unique identifying number (an IRS TIN or passport number) 
• Individuals signing the documents on behalf of the purchasing entity or trust
• The seller
• The residential property being transferred
• Total consideration and information about any payments made

Which Transactions Are Exempt? 
FinCEN carved out several exemptions for “lower-risk transfers.” Those transactions that do not need to be reported include:

• Transfers of easements;
• Transfers resulting from death, pursuant to the terms of a will, trust, operation of law, or contractual provision like a transfer on death deed; 
• Transfers as a result of divorce or dissolution;
• Transfers to a bankruptcy estate; 
• Transfers already being supervised by a U.S. court; 
• No-consideration transfers of property by an individual (or married couple) to a trust of which they are the grantor or settlor; 
• Transfers to a qualified intermediary for purposes of a like-kind exchange under Section 1031 of the Internal Revenue Code; and 
• Transfers for which there is no reporting person.

What is the Impact of This Rule on Residential Transfers?
For those transactions subject to the RRE Rule, the most noticeable impact is likely to be an additional fee (or an increase in fees) tied to the transfer of the property. 

The designated reporting person will most likely charge a fee to cover the time and effort required to collect the necessary beneficial ownership information and prepare/submit the report to FinCEN.

What Does This Mean for Farmers? 
For the vast majority of farmers, this rule will not apply. First, farmland is not classified as residential property and falls outside the scope of the rule. Second, most farm acquisitions involve financing. Third, routine estate planning transfers are exempt from any reporting obligations. In short, typical transactions like purchasing, selling, or passing down farmland, including the farmhouse itself, are highly unlikely to trigger any new reporting requirements. 

The Narrow Scenario Where Farmers Might See an Impact.   
That said, there is one specific scenario where a farmer or rural property owner might trigger the RRE Rule. If a farmer chooses to subdivide their property and separately survey off the farmhouse (treating it as distinct residential real estate) and then attempt to gift or transfer that farmhouse to an LLC, then the farmer likely has a reportable transfer on his or her hands. In this narrow case, the transfer likely would not qualify for any of the rule’s exemptions, such as those for routine estate planning gifts to trusts created by the individual, and would therefore require the designated reporting person to collect beneficial ownership information for the parties involved and file it with FinCEN. 

Key Takeaway
In summary, FinCEN’s RRE Rule is not likely to affect the majority of farmers. That changes, however, in certain cases involving non-financed transfers of residential property (such as gifting a home to an LLC or conveying it to a trust where the seller/transferor is not the settlor or grantor of that trust). In those situations, do not be caught off guard if an additional reporting-related fee shows up at closing. 

To be clear, it is not a fine or punishment for anything done wrong, it is simply the expense of doing business under the federal government’s new reporting requirements. 

As with any transaction, proactive planning and clear communication with your attorney, accountant, or other trusted advisors can help ensure everything proceeds efficiently and without unexpected hiccups.  

The Ohio General Assembly wrapped up its legislative session for the year last week, with much of the late-session energy given to property tax relief.  The legislature focused on strategies for reducing Ohio property taxes in five bills it just sent to the Governor (see our earlier post).  None of the bills addressed farmland taxation, however.  But a bill the legislature might consider when it returns in 2026 does propose changes to Ohio’s Current Agricultural Use Valuation (CAUV) Program for farmland property taxes.  H.B. 575, introduced by Rep. David Thomas (R-Jefferson) and Bob Peterson (R-Sabina) proposes a number of revisions to the CAUV program.

H.B. 575 doesn’t propose reductions to CAUV taxes, however.  Instead, the bill contains changes to how the CAUV program works.  The bill is consistent with plans in Ohio’s House for continuing to address property taxes.  Rep. Bill Roemer (R-Richfield), chair of the House Ways and Means Committee where H.B. 575 now sits, stated that the five recently passed bills represented most of the “big structural changes” to property taxation and that the legislature’s future focus will be on “fairness and efficiency.”  Sponsor Rep. Thomas agreed, stating that “the changes that need to happen now are about the process, helping taxpayers through the process and transparency.”  Process and transparency are two themes in H.B. 575’s revisions.  Here’s what the bill proposes to change about Ohio’s CAUV program.

Process changes:

• Removes the annual renewal requirement for CAUV.  A landowner would not have to submit a renewal each year after initial approval to enroll in the CAUV program.
• Requires county auditors to provide for electronic filing of CAUV enrollment applications.
• Allows a single operation with non-contiguous land in two or more counties to file one application for all parcels in the county where a majority of the land exists.
• Requires that property tax bills separately state the “CAUV savings” for the parcel.
• Mandates that a county auditor must provide notice of the soil types and CAUV values to landowners in reappraisal and update years.
• Allows the county auditor to value residential property and wasteland below the CAUV value.

Eligibility changes:

• Authorizes continued CAUV eligibility for tracts or portions lying idle or fallow in the previous year due to state or federal disaster or state of emergency declarations.
• Allows CAUV eligibility for contiguous land that is incidental to the primary use of the land for agricultural purposes, including areas for driveways, access roads, staging, barns, and farm markets.
• States that the CAUV minimum acreage requirement can include non-contiguous tracts that are part of a single operation within one or multiple counties.

While the proposed changes won’t affect the CAUV formula or reduce CAUV taxes, the revisions in H.B. 575 do solve many of the fairness and efficiency problems we see with Ohio’s CAUV program.  But it may take legislators a while to get to the CAUV bill.  It’s one of dozens of bills waiting for consideration by the House Ways & Means Committee. Even so, let’s hope 2026 brings changes to CAUV in the New Year.

Read H.B. 575 on the Ohio General Assembly’s website.

Providing relief for rising property taxes has been top of mind in the General Assembly this past year. Two weeks ago, the legislature passed four bills meant to tackle this issue. The bills, which each take different approaches to lowering property taxes, are now awaiting consideration by Governor DeWine.  But how would each bill address property taxes?

House Bill 129—School District Millage

House Bill 129, available here, was introduced by Representative David Thomas (R, Jefferson). In Ohio, we collect property taxes in units of measure called “mills.”  Each mill is equivalent to one-tenth of a cent. In the late 1970s, the Ohio General Assembly passed the “20 mill floor” for school districts, which was meant to guarantee districts a baseline of funding.

However, under current law, not all school district levies count toward the 20-mill floor, which can result in higher property taxes. H.B. 129 would change this by including emergency, substitute, incremental growth, conversion levies, and the property tax portion of combined levies when calculating the 20-mill floor for school districts.  The thought is that including more types of levies in the 20-mill floor will reduce property tax rates in school districts with these additional levies. For some more background on school districts and the 20-mill floor, Ohio’s Legislative Service Commission (LSC) has a brief on the subject, available here.

House Bill 186—School District Revenue

House Bill 186, sponsored by Representatives James Hoops (R, Napoleon) and David Thomas (R, Jefferson) also focuses on the 20-mill floor for school districts. The bill, available here, would create a tax credit which would prevent increases in school district property taxes from exceeding the rate of inflation. This would only apply to property owners in a school district on the 20-mill floor. LSC’s analysis of the bill, available here, includes helpful examples of how the tax credit would work.

H.B. 186 also modifies property tax “rollbacks” for residential property, which would ultimately increase the total rollback, or savings, for owner-occupied homes, while eliminating the rollbacks for all other residential property.

House Bill 309—County Budget Commissions

House Bill 309 takes a slightly different approach to lowering property taxes by revising the authority and rules for county budget commissions. Sponsored by Representative David Thomas (R, Jefferson), the bill’s text is available here. 

County budget commissions are made up of the auditor, treasurer, and either the prosecuting attorney or tax commissioner in each county. If passed, H.B. 309 would allow county budget commissions to reduce millage on any voter-approved levy if the commission deems the revenue is “unnecessary” or “excessive.” This authority to reduce millage on levies would not include debt levies. Further, county budget commissions would not be permitted to reduce a school district’s operating levy below the 20-mill floor, or to reduce any levy collected below the previous year’s revenue unless they are able to offset the reduction using reserve balances, nonexpendable trust funds, or carryover amounts. 

House Bill 335—Property Tax Overhaul

Finally, House Bill 335 was also introduced by Representative David Thomas (R, Jefferson).  H.B. 335, available here, would limit inside millage collections to the rate of inflation. This would be accomplished by requiring county budget commissions to adjust the rate of each inside millage levy during the reappraisal of all real property performed every six years under Ohio law, or during the update, which occurs every three years.  To see some examples of this language in action, see the LSC’s analysis of the bill, available here. 

What’s next?

Each of these four bills aimed at lessening the burden of property taxes have been delivered to Governor DeWine, and await his signature before they can become law.  We will certainly keep you updated on what happens with each bill. In the meantime, if you’d like more information about property taxes in Ohio, the Ohio Department of Taxation has a great informational guide here.

A bill authorizing the capture and storage of carbon dioxide via underground storage wells has passed the Ohio House of Representatives.  The nearly unanimous vote by the House now advances H.B. 170 to the Ohio Senate.

We’ve reported previously on the prospect of Carbon Capture and Storage (CCS) coming to Ohio.  CCS is one part of a strategy to reduce airborne CO2 emissions. It’s of high interest to hard-to-abate emission sources, such as ethanol, steel, chemical, and concrete production facilities. Rather than reducing the CO2 in their emissions, CCS allows such sectors to capture CO2 from emissions and store the CO2 in pore spaces far beneath the land’s surface. But landowners must be willing to lease their “pore space” for CO2 storage. If passed, then, CCS legislation will create pore space leasing opportunities and challenges for Ohio landowners.

Refer to our Ag Law Blog posts explaining CCS and discussing how CCS requires landowners to lease “pore space.”  We also reviewed the first CCS bills in Ohio, proposed last legislative session, in a third blog post.  Those  bills did not pass, and H.B. 170 represents a new version of the proposals, developed after additional consideration by interested parties.

What’s in H.B. 170?

H.B. 170 sets up a state regulatory framework that authorizes the storage of capture carbon dioxide into subsurface “pore space” via Class VI injection wells, which are regulated by the U.S. EPA under the federal Safe Drinking Water Act’s Underground Injection Control Program.  The bill addresses several

• Agency authority and rules.  Delegates regulatory authority over CCS to the Ohio Department of Natural Resources Division of Oil and Gas Resources Management and directs the Chief to adopt rules that carry out the legislation.
• “Pore space” interests.  Defines “pore space” as the subsurface cavities and voids that are suitable for use as storage areas for CO2, outlines procedures for severing and conveying pore space, clarifies the relationship between pore space, surface rights, and mineral interests, and limits the liability of pore space owners for the injection of CO2 into their pore space.
• CCS projects.  Lays out the components of “carbon sequestration projects,” which includes “storage facilities” operated by “storage operators” who inject CO2 into pore space via injection wells.
• “Pooling” of pore space.  Authorizes the pooling or “statutory consolidation” of pore space for carbon sequestration projects if the storage operator obtains the consent of owners of at least 70% of the pore space and establishes rights and responsibilities for statutory consolidation.
• Project completion and closure.  Provides procedures for “certificates of project completion” that apply to the closure of storage facilities and a transfer of responsibility and liability to the State.
• Fees and penalties.  Establishes fees for storage facilities and funds to pay for current and post-closure care program costs  and sets civil and criminal penalties for violation of CCS regulations.
• Limitations on damages.  Limits claims for damages dues to injection or migration of CO2 to claims that establish direct physical injury to persons, animals, or property,  limits claims to diminution of value caused by the injection or migration and prohibits punitive damages in such cases.

What’s next for CCS?

The Ohio Senate now has its turn to consider H.B. 170.  The Senate President referred the bill to the Senate Energy Committee,  which already has a CCS bill before the committee. The Senate’s version of CCS, S.B. 136, was introduced last March but has not received any hearings. 

S.B. 136 mirrors the version of H.B. 170 first introduced in the House. But amendments to H.B. 170 occurred in the House Natural Resources Committee that created differences between the two bills.  It will be up to Energy Committee Chair Brian Chavez to determine which bill to advance, if any. 

For a comparison of the original introduced bills (H.B. 170 and S.B. 136) and the substitute bill for H.B. 170 that passed the House of Representatives, refer to this synopsis by the Legislative Service Commission that highlights the differences.

H.B. 170 is a step toward “primacy”

Ohio is already on its way toward seeking approval from the U.S. EPA to regulate Class VI injection wells within the state, a concept referred to as “primacy.”  State-based regulation of the well permitting program would speed up the permitting process for CCS, according to proponents of primacy.  However, the state regulatory program must be at least as stringent as federal requirements before the U.S. EPA will delegate the Class VI program to the state. H.B. 170 and its resulting regulations will be reviewed by the U.S. EPA when Ohio submits its application for primacy to the U.S. EPA.

To date, only five other states have obtained primacy over Class VI wells. Six other states are currently in the process of applying for such approval.  By obtaining primacy, Ohio could be ahead of many states in encouraging CCS development, proponents state.  

Implications for Ohio landowners: pore space leasing

We’ve heard that some companies are already out with offers of “pore space leases” to Ohio landowners.  Some are offering around $25 per acre for the right to use pore space for CCS.  But now is the time for caution.  The legislation is necessary to clarifying  legal interests in pore space and how CCS development will occur in Ohio—both important issues landowners need to know before entering into pore space leases.  A third important issue in need of clarification is the value of pore space, and it’s still too early to have firm answers to that question. Experience from oil and gas leasing teaches us, however, that early lease payment offers tend to be lower than later offers.

Landowners who want to move forward now on pore space leases, however, would be wise to work with an attorney.  Some attorneys across the state are already reviewing and negotiating pore space leases on behalf of the landowners.  Contact the agricultural law team for help with identifying attorneys knowledgeable in this area. 

Watch for more resources on CCS and pore space leases coming to our program soon.