New Bulgarian realty law step in right direction
It is good news that Bulgaria has finally introduced a ban on real estate purchase payments made in cash. The ban makes the country more transparent and stops unhelpful gossip about its property markets being used for money laundering. It also shows other countries how to make their processes more acceptable to overseas investors – particularly helpful when confidence in many property processes and regulations is at rock bottom.
The new law aims to reduce real estate fraud and is part of Bulgaria's government's policy of introducing new laws across a range of financial transactions aimed at reducing corruption and crime, and ensuring purchase taxes are paid rapidly and fairly.
This is all, in turn, part of Bulgaria's programme to bring its fiscal structures up to European Union standards.
But how unfortunate, to put it mildly, that in the final two weeks of December – before the ban started on January 1 – daily transactions in Bulgaria's capital, Sofia, soared to about 500 a day. It spiked at 764 on one day just before the Christmas holidays. Before that time, it was relatively rare to hit 300 a day.
Trud, a Bulgarian paper, says most of these pre-Christmas deals involved flats being bought and sold rapidly.
This will inevitably raise speculation – justified or not - that these sales and purchases were themselves not quite above board.
That's a shame. It may tarnish the reputation of Bulgaria's property industry until the new laws are seen to work. This will take a few years – but better late than never.
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