Deals with Properties over 10,000 BGN to Be Paid Only Via Bank Transfer

Starting July 1st 2011 every property deal over 10,000 BGN will be paid via bank transfer. The Bulgarian parliament voted on this change to the Notaries and Notary Activities Act yesterday. The ban on cash payments will also be valid for the cases of established real rights and servitudes as long as their price exceeds the stated threshold. However, when buying a car it can be paid for in cash, even if it is very expensive.

When buying a house, apartment and land the money will be transferred to a bank account which the parties under the agreement have chosen. The law also allows for the amount to be transferred to a special account of the notary public. Such an account exists at the moment but as it was not separated from the notary public’s general account and it didn't have a special status there was risk for the money and almost no one chose this option.

Bank transferring the money will increase the cost of the deals but it is not yet clear how much. The other change is that the parties under the deal will also sign a special declaration. In it they will have to declare that the sum that was bank transferred is the actual price of the property and they will be liable for the information they provide. The aim is to stop the practice where property deals are certified before a notary public at a much lower tax assessment. The notaries public already expressed their concern that the declarations will not bring the expected result.

The Bulgarian parliament discarded the proposal instead of a declaration the notaries public to carry out the check up themselves whether any taxes are concealed. It also discarded the possibility the notary public to exert more control over the legality of the deal and to be liable that the seller is the actual owner of the property and the property is free from any encumbrances.

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