New real estate transactions law passed on first reading
22 January 2010
Members of parliament have passed a new law outlawing cash transactions on real estate payments, the Bulgarian news agency reported on January 20 2010.
The measure was passed on first reading, BTA said. The measure aims to bring transparency to the real estate sector and thwart fraud, according to Justice Minister Margarita Popova. If implemented properly, the scheme would "boost revenue for municipalities, increase the banks’ influence over deals and reduce interest payments on loans," Popova said, cited by Dnevnik. For example, it is essential that the law enforces the notion that in the property disclosure form, the appraised value of the property reflects the actual price of the transaction.
Initially, the measure outlawing all payments in cash was due to take effect from January 1 2010, Dnevnik daily reported on January 5. On January 5 2010, the scheme had been approved only on first reading by a Parliamentary commission. "In the best case scenario, the bill could be passed on second reading by the end of January," Iskra Fidossova, head of the legal affairs committee in Parliament, said. "Most likely, the law will come into effect in May or June 2010."
Real estate deals more than doubled in December 2009, compared to October and November, and trebled compared to August and September. The sudden rise in transactions was sparked by alarm on the part of both buyers and sellers that the new measure could entail properties being re-appraised and re-evaluated at a considerably higher figure, meaning that both sellers and buyers would have been burdened with higher taxes.
International Property News