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Belgrade – In Serbia, where the average salary is around 500 euros, in the last quarter of last year around a billion euros in cash circulated through the property market.
Source: Politika, Mariana Avakumović
Photo: Depositphotos / lianna_s_
For a country where the regulations do not allow cash transactions of more than 10,000 euros, this fact raises the question of whether the origin of the money is controlled and who are the people who pay for the apartments all at once instead of in installments, since only 20% of real estate buyers borrow.
Kaća Lazarević, a real estate agent, emphasizes that suspicious transactions do not go through agencies because, according to the Law on Prevention of Money Laundering, they are obliged to do all risk analysis before someone starts buying. The agencies take care of that, and those who do not want to work according to the law will certainly not come to the agency, Lazarević told “Politika”.
According to her, investors, who hang a sign on the construction site with the inscription: “direct sale” have no obligation to do risk analysis, ask buyers anything and report suspicious monetary transactions, adding that people who have more money buy apartments for cash. those with less – on credit.
“Obviously, a certain percentage of buyers have a lot of money and they don’t buy one, but more apartments. Due to the crisis, they realized that the safest investment is to buy real estate, mostly new buildings that are selling well. Many decided to keep money in a bank or safe. They invest in apartments, commercial premises or shops, “Lazarević explains.
He emphasizes that this was not a common trend before. Everything has changed with the crown and everything works differently. People decide to buy urgently, believing that money will be devalued.
Does such a massive cash payment indicate money laundering?
George Pap, a tax expert and former head of the Tax Administration, says it doesn’t have to mean this at first, but there certainly is.
“If you sell a bigger apartment to buy a smaller one and ask for a loan, there is no money laundering. There are buyers who cannot prove it, but the process is not being carried out,” Pap said.
He adds that we have the Law of Origin of Property, which is not yet applied because workers are being trained. That law replaced the part of the Tax Procedure and Tax Administration Law that talks about cross-appraisal of property. By using these provisions, everyone can determine the origin of the money. When asked if it was checked, he replied that it mostly was not, and although it is, it is in strokes.
Goran Radosavljevic, a professor at the Faculty of FEFA, points out that the problem is not only the real estate trade. It is legally regulated in a solid way.
“A much bigger problem is construction, because a large amount of money is laundered through it, which is not controlled in any way. Cash enters the legal channels through construction, and then those who sold the money appear. land on which the building will be built “Buyers don’t even ask how much it costs. This kind of construction activity doesn’t make any economic sense, regardless of all the explanations. The fact that people come back from abroad and invest money doesn’t really drink water. The crisis is in all parts of the world, “says Radosavljevic, emphasizing that everything indicates that there are probably some illegal activities that are pumping the entire sector, but if the state stopped it we would have a 10 percent drop in GDP , which is not worth it.
According to him, 130,000 different properties were marketed last year. Most are apartments, of which 80% are cash. This is the volume of 80,000 or 90,000 apartments that were sold for cash three or four years ago.
“The question is whether every year in Serbia 80,000 people sell an apartment and buy another. A small percentage of loans for the purchase of apartments indicates that there are illegal activities because it is simply impossible that in such a poor country there is so much cash assets, that it is already for several years, it has measured more than three billion euros annually, “said Radosavljevic.
Who buys these apartments?
“There’s a little bit of everything. Some people did withdraw their savings from the banks, because of the zero interest rates and invested in real estate. Our guest workers haven’t been here for a year. Although they certainly buy at a certain rate. percentage. Someone bought a real estate property because another But how many fields and hectares of land in Vojvodina does someone need to sell to buy a studio in Belgrade on the water? “, asks Radosavljević and adds that it is not specific only to our country.
Similar things are happening in the region. The question is what will be the effect of all that. In any case, according to his assessment, citizens who are forced to buy a flat at the moment are losing, because if they pay 3,000 euros for a square meter of flat in Dorcol, they will hardly ever be able to sell it like that. price. For that money, they can buy a flat anywhere in Europe, concludes our interlocutor.
Notaries reported 317 suspicious transactions
The Serbian Chamber of Notaries Public says that the notion of cash is misunderstood when it is said that the majority of real estate transactions in Serbia are carried out with cash.
“For more than 80 percent of the properties, the purchase price was paid with the parties’ own funds, while the remaining 20 percent was paid with loans. At the moment, we do not have data on how many real estate loans appeared as such -called in cash and how much If a citizen buys an apartment from another person on credit, that other person then has his own funds at his disposal, of which he can buy two smaller housing units. The series can continue, so that the citizens from whom This other person bought two smaller apartments have their own funds, of which they can buy a country house or, for example, give a part towards the purchase of another property. Thus, the money that was obtained originally from the loan, it will show up multiple times in real estate statistics as a cash purchase, “they explain. Cameras
They emphasize that the Law of Foreign Exchange Operations, as an exception, provides for the possibility for the parties to pay purchase prices in foreign currency. On the other hand, the Law on the Prevention of Money Laundering and Terrorism Financing prescribes a restriction on cash operations for an amount equal to or greater than 10,000 euros in equivalent dinars. From this, it is clear that in Serbia, only real estate with a price of less than 10,000 euros in dinars can be paid in cash.
As of April 1, 2018, notaries are bound by the Law on the Prevention of Money Laundering and Terrorism Financing, as are lawyers, banks, payment institutions and others. In the first year of application of this law, they reported 317 suspicious transactions. According to them, they do not know whether an accusation for money laundering was filed after some of the verifications they carried out, mainly due to the processing after the notary public’s report on the existence of suspicions or reasons for suspicion that certain funds are the result of criminal activity, or related to the financing of terrorism, under the authority of the Anti-Money Laundering Authority.
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