[size=75:2fludcvg]Sofia echo Fri, Nov 13 2009

Property bank ahead

As of January 1 2010 all transactions on real estate deals in Bulgaria will be conducted via bank transfers, according to an amendment to the Notary Act put forward by the Justice Ministry. If approved by Parliament, the change will ban all real estate payments made in cash.

The amendments aim, first raised a year ago, is to reduce real estate fraud and money laundering. The move is part of the Ministrys policy of adopting legislative amendments to a number of laws as a way of reducing corruption and crime as well as ensuring that all fees and taxes owed to the state are paid.

The highlight of these efforts will be the adoption of a Law on State Depositary Bank which would serve as a guarantee for all payments in the form of the state acting as custodian for deposits. It will not have the functions of a commercial bank, hence it will not appear as their competitor, the draft bill says, according to Bulgarian-language Dnevnik. It will not charge interest but will levy a certain fee on every deal.

The idea is that it would be used by notaries and lawyers irrespective of the deal, whether it be the purchase of real estate or a vehicle or other transfer of ownership or bankruptcy.

The draft bill adopts Frances experience where there is a similar model, Dnevnik said. The main advantage of such a deposit bank is that it would cut down on fraudulent deals and tax evasion.

The risk is that there will be a waiting period during which the money subject to the deal will be blocked at the deposit bank. The French experience shows that this period can be about 25 days during which the seller cannot touch the money. Another setback is that the deposit bank will keep a fee for servicing the transactions. So clients will have to pay yet more money, Dnevnik quoted real estate brokers as saying.

Many people are willing to risk not reporting the real amount of the sum as long as it saves them taxes, Biserka Marinova, owner of real estate agency Lega Real, told Dnevnik. Tax authorities and the National Revenue Agency have worked hard over the past couple of years to curtail this negative practice.

The new regulations will without a doubt complicate matters, she said. One such complication will be the combination of having a bank loan as the means to fund the deal and the waiting period to get them from the depositary bank. And there is the question of the funds required for the setting up of the new state body and its staff.

For now, that idea is at the draft bill stage but judging by the regular pronouncements by Justice Minister Margarita Popova and Finance Minister Simeon Dyankov on the subject, it could become reality by the end of the year.

Another layer of costs and beaurocratic parasites to be paid.

It won't stop anything.

The honest people will still be honest.

The cheats will still cheat.

I have to agree with you Cumbrian but I do believe it will make things much more transparent and safer

[size=75:1jm3zrel]novinite December 4, 2009


Update

Cash Buys Outlawed in Bulgaria

As of January next year, all property transactions in Bulgaria must be carried out via bank transfer, according to new rules to be introduced by the Justice Ministry - and there is hope that the new rules will help to reduce property fraud and money laundering, as well as ensuring that all fees and taxes owing to the state are paid...

An amendment to the country's Notary Act is in the pipeline and is expected to be approved by Parliament before the end of the year. Cash buys will then be outlawed as of January 2010.

Whilst the change to buying and selling was first mentioned a year ago as part of a bigger plan to reduce corruption in the property sector, it is only now starting to come to fruition.

As well as reducing corruption, it also aims to ensure that all fees and taxes owed to the state are paid, through the creation of a State Depositary Bank which would serve as a guarantee for all payments in the form of the state acting as custodian for deposits.

The legislative changes will require that both the vendor and the buyer specify their bank accounts for conducting a property deal. Alternatively, they could use the account of their notary public.

The conditions for depositing money into bank accounts as part of the deal will be specified by the respective sides in written agreements.

These legislative changes are seen as the first step to an all-out regulation of payment in purchase deals through a special law to be called Deposit Account Act.

There is also hope that the new laws may inspire more confidence from overseas property buyers.

But, there are risks to this new system, as sellers and buyers may want to avoid the new fee charged by the bank for servicing the transactions.

Thus, they may agree a lower price for the official transaction and then do a cash deal privately. This is common in France where the new system planned for Bulgaria is already in use.

Justice Minister Margarita Popova and Finance Minister Simeon Dyankov said they are confident that the bill will be approved by the end of the year.

Very interesting reading but they have answered the problem themselves

"
But, there are risks to this new system, as sellers and buyers may want to avoid the new fee charged by the bank for servicing the transactions"


And this is exactly what will happen? this is what we in the west call a loop hole

There is also hope that the new laws may inspire more confidence from overseas property buyers.

No it won't.

It's just another layer of beaurocratic parasites to be paid by the buyer, which, in my humble opinion, will only serve to give them less confidance.

[size=75:1a6goptv]novinite 3 January 201


Bulgaria Delays Outlawing of Property Cash Buys

New rules that envisage that all property transactions in Bulgaria must be carried out via bank transfer will come into force in the summer, not as of January.

The delay is due to the parliament's failure to approve before the end of the year amendments to the country's Notary Act, which are still in the pipeline.

“The best case scenario is for the bill to be approved by the parliament at second reading at the end of January, Iskra Fidosova, head of the judicial commission in the National Assembly, commented. “Most probably the law will start to be implemented not earlier than May or June, she added.

There is hope that the new rules will help to reduce property fraud and money laundering, as well as ensuring that all fees and taxes owing to the state are paid.

Whilst the change to buying and selling was first mentioned a year ago as part of a bigger plan to reduce corruption in the property sector, it is only now starting to come to fruition.

As well as reducing corruption, it also aims to ensure that all fees and taxes owed to the state are paid, through the creation of a State Depositary Bank which would serve as a guarantee for all payments in the form of the state acting as custodian for deposits.

The legislative changes will require that both the vendor and the buyer specify their bank accounts for conducting a property deal. Alternatively, they could use the account of their notary public.

The conditions for depositing money into bank accounts as part of the deal will be specified by the respective sides in written agreements.

These legislative changes are seen as the first step to an all-out regulation of payment in purchase deals through a special law to be called Deposit Account Act.

There is also hope that the new laws may inspire more confidence from overseas property buyers.

But, there are risks to this new system, as sellers and buyers may want to avoid the new fee charged by the bank for servicing the transactions.

Thus, they may agree a lower price for the official transaction and then do a cash deal privately. This is common in France where the new system planned for Bulgaria is already in use.

I still don't see the point of this? I don't believe it will make any difference at all;
there will always be away where cash is involved

nu2bg wrote:

I still don't see the point of this? I don't believe it will make any difference at all;
there will always be away where cash is involved

Your absolutely right so why are they wasting so much money with what seems to be nonsense

Just another slippery slope.

Why don't they ever learn?

[size=75:2b4mzb0h]Sofia echo 5 January 2010

Update

A proposal directing that all property purchases be made exclusively via bank transfer has been postponed until the spring, although the exact date is yet to be determined.

Initially, the measure, outlawing all payments in cash, was due to take effect from January 1 2010, Dnevnik daily reported on January 5.

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."


The measure aims to bring transparency to the real estate pricing sector and thwart fraud, according to Justice Minister Margarita Popova. If implemented properly, the scheme would "
boost revenue for municipalities, increase the bank 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.

Real estate deals more than doubled in December 2009, compared to October and November, and trebled compared to August and September, Dnevnik reported, citing statistics from different brokers and real estate agencies.

The reason for the sudden pike was thought to be alarm from sellers and buyers that the new amendments were imminent. This would have seen properties re-appraised and evaluated at a considerably higher value, meaning that both sellers and buyers would have been burdened with higher taxes.

[size=75:24wscugb]novinite 19 February 2010

update

Bulgaria Eases Ban on Property Cash Buys

New rules that envisage that all property transactions in Bulgaria must be carried out via bank transfer will not be applied to deals worth less than BGN 10,000.

"
The threshold will be introduced to avoid unnecessary complications for the buyers and sellers of land and property in small villages,"
Emil Radev, MP from the ruling GERB party and member of the judicial commission in parliament, announced.

The rules that envisage that all property transactions in Bulgaria must be carried out via bank transfer were approved at first reading by the MPs at the end of January.

There is hope that the new rules will help to reduce property fraud and money laundering, as well as ensuring that all fees and taxes owing to the state are paid.

As well as reducing corruption, it also aims to ensure that all fees and taxes owed to the state are paid, through the creation of a State Depositary Bank which would serve as a guarantee for all payments in the form of the state acting as custodian for deposits.

The legislative changes will require that both the vendor and the buyer specify their bank accounts for conducting a property deal. Alternatively, they could use the account of their notary public.

The conditions for depositing money into bank accounts as part of the deal will be specified by the respective sides in written agreements.

There is also hope that the new laws may inspire more confidence from overseas property buyers.

But, there are risks to this new system, as sellers and buyers may want to avoid the new fee charged by the bank for servicing the transactions.

So if you buy a shed you don't need to go through the bank? That'll please eBay sellers

[size=55:27sqm24t]novinite 24 September 2010

Bulgaria New Property Sale Rules Said to Benefit Banks, Notaries

New rules that envisage that all property transactions in Bulgaria must be carried out via bank transfer have been attacked by opponents, who say they serve the interests of banks and notaries.

"
The law will trample on the interests of a large number of Bulgaria to the benefit of banks and notaries,"
comments Nikolay Pehlivanov from the nationalist Ataka party as the legislative amendments are about to be moved to parliament for their conclusive approval.

According to him the new rules mean more fees for the clients without any guarantees for their safety.

The rules that envisage that all property transactions in Bulgaria must be carried out via bank transfer were proposed in the hope that they will help reduce property fraud and money laundering, as well as ensure that all fees and taxes owing to the state are paid.

As well as reducing corruption, it also aims to ensure that all fees and taxes owed to the state are paid, through the creation of a State Depositary Bank which would serve as a guarantee for all payments in the form of the state acting as custodian for deposits.

The legislative changes will require that both the vendor and the buyer specify their bank accounts for conducting a property deal. Alternatively, they could use the account of their notary public.

The conditions for depositing money into bank accounts as part of the deal will be specified by the respective sides in written agreements.

There is also hope that the new laws may inspire more confidence from overseas property buyers.

But, there are risks to this new system, as sellers and buyers may want to avoid the new fee charged by the bank for servicing the transactions.

[size=55:v14wbh11]novinite

Bulgaria Outlaws Property Cash Buys

New rules that envisage that all property transactions in Bulgaria must be carried out via bank transfer will come into force on July 1, the parliament decided.

The requirement will not be applied to deals worth less than BGN 10,000 in a bid to avoid unnecessary complications for the buyers and sellers of land and property in small villages.

There is hope that the new rules will help to reduce property fraud and money laundering.

As well as reducing corruption, it also aims to ensure that all fees and taxes owed to the state are paid, through the creation of a State Depositary Bank which would serve as a guarantee for all payments in the form of the state acting as custodian for deposits.

The legislative changes will require that both the vendor and the buyer specify their bank accounts for conducting a property deal. Alternatively, they could use the account of their notary public.

The conditions for depositing money into bank accounts as part of the deal will be specified by the respective sides in written agreements.

There is also hope that the new laws may inspire more confidence from overseas property buyers.

But, there are risks to this new system, as sellers and buyers may want to avoid the new fee charged by the bank for servicing the transactions.