The new measure to outlaw all cash payments and thus help to make Bulgaria’s real estate market more transparent, was due to take effect on January 01 but it cannot go ahead as it has only undergone one hearing in parliament.
Iskra Fidossova, head of the legal affairs committee in the Bulgarian parliament confirmed in a press statement that it is postponed until the spring, although the exact date is yet to be determined.
‘In the best case scenario, the bill could be passed on second reading by the end of January. Most likely, the law will come into effect in May or June 2010,’ Fidossova said.
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 also boost revenue for municipalities, increase the banks’ influence over deals and reduce interest payments on loans, Popova said.
A major concern that it is hoped will be addressed by the new law is that the valuation of properties match the actual price paid during the final transaction. There has been a lot of corruption with under the counter payments in the country.
It is also hoped that the new law will be just the start of a number of measures to make the country’s real estate market less corrupt. The UK Foreign and Commonwealth Office has urged Bulgaria to raise standards and tighten controls in the real estate sector.
Natalie Luscombe from the European Directorate of the UK Foreign and Commonwealth Office said that the UK Ambassador in Sofia has sought assurances that the problems encountered by British people purchasing property in Bulgaria would be taken seriously at government level.
Recently British investor Bryan Talbot won his property fraud case after his dream villa was stolen from him and sold on three times without his knowledge. He bought the villa for €98,000 in Polkovnik Sveshtarovo near Dobrich in 2006 with his retirement money and spent €40,000 on renovations. He gave handyman Dimitar Teoharov power of attorney to pay his energy bills for him.
But when he returned later in 2007 he found the totally gutted villa padlocked and discovered it has been sold by Dimitar Teoharov, who had meanwhile left the country, to a Sofia company and it was then sold on again twice.
