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.

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