Purchasing a dwelling in Kazakhstan: instances where paying in cash is prohibited
In a significant move aimed at bolstering control over the real estate market, the National Bank of Kazakhstan has put forth a draft resolution that is currently under public discussion until the 15th of July. This proposed legislation focuses on enhancing payment methods and increasing transparency in real estate transactions.
One of the key changes is the **mandatory use of non-cash payments for shared participation contracts in real estate**. This means that transactions for buying real estate via these contracts must be conducted through non-cash payment methods, effectively banning cash payments in this context. This move is intended to reduce gray market schemes and increase transparency in real estate deals [1][3].
Another significant update is the **ban on third-party recovery of emergency compensation funds** related to real estate payments. This tightens control over financial flows and consumer protection in real estate purchases [1].
The legislation also restricts **advertising of shared equity real estate projects** to ensure compliance and reduce misleading promotions tied to off-plan constructions [3].
Local authorities will also be tasked with monitoring who and how collects money for construction, while buyers can benefit from easier proof of investments in case of problems, as there will be a digital trail when paying through a bank [2].
Payments for shares in under-construction housing, under share participation agreements, will only be possible in non-cash form through a bank or a payment system. The extension of construction time has been reduced from 9 months to a maximum of 5, and mortgage will be prohibited for apartments in buildings without permission to collect funds [1][4].
While some, such as Almas, have expressed opposition to these measures, others, like Astana, believe that these changes make it easier to prove investments in case of problems due to the digital trail when paying through a bank [2].
The exact timeline for the implementation of these changes has not been published yet, but these measures reflect a move towards more digital and regulated real estate transactions in Kazakhstan [1][3].
References: [1] Kazakhtelegraph.kz, (2022). Kazakhstan to Introduce Cashless Payments for Under-Construction Real Estate. Retrieved from https://www.kazakhtelegraph.kz/en/news/kazakhstan-to-introduce-cashless-payments-for-under-construction-real-estate
[2] Tengrinews.kz, (2022). Kazakhstan to Ban Cash Payments for Under-Construction Real Estate. Retrieved from https://tengrinews.kz/kazakhstan_news/kazakhstan-to-ban-cash-payments-for-under-construction-real-estate/
[3] Eurasianet.org, (2022). Kazakhstan's New Rules for Real Estate: What You Need to Know. Retrieved from https://eurasianet.org/kazakhstans-new-rules-for-real-estate-what-you-need-to-know
[4] Azernews.az, (2022). Kazakhstan to Ban Cash Payments for Under-Construction Real Estate. Retrieved from https://www.azernews.az/region/189116.html
- The draft resolution by the National Bank of Kazakhstan, aimed at boosting control over the real-estate market, mandates the use of non-cash payments for shared participation contracts in real-estate transactions, intending to minimize gray market schemes and increase transparency.
- This legislation also introduces a ban on third-party recovery of emergency compensation funds related to real-estate payments, a move that tightens control over financial flows and consumer protection in business deals.
