Words: Ashley Rigg
Published: 18th November 2009
Cash purchases banned in Bulgaria
From January 2010, all real estate transactions in Bulgaria are set to be conducted through bank transfers, outlawing cash purchases.
An amendment to the country’s Notary Act put forward by the Justice Ministry is set to be approved by Parliament before the end of the year, with the aim of reducing real estate fraud and money laundering. The legislation will also act as a boon for tax receipts which are easier to avoid than when purchasing property in cash.
The new legislation with create a State Depositary Bank which will serve as a guarantee for all payments in the form of the state acting as custodian for deposits. The bank will not compete with mortgage lenders, instead fulfilling the role of a commercial bank. It will charge no interest but will levy a fee on every successful sale.
The draft has been modelled on the system in France. The idea is that the bank will be used by notaries and lawyers and will hold onto money for a waiting period of around 25 days during which the seller cannot touch the money.
The new system aims to make the purchase process more transparent but critics say problems are likely to persist as some buyers and sellers are likely to agree a lower price for the official transaction with additional cash changing hands privately.
Full story on
Property Wire.
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