Russians Face Obligation to Bank Transfers for Apartment Payments via Latest Technology
Here Comes a Transparent Shift in Russian Real Estate
Got a suitcase full of cash ready to buy that dream apartment? Maybe not for much longer. Russia is pondering over a ban on such transactions if the amount surpasses 1 million rubles. Svetlana Razvorotneva, the Deputy Chair of the Construction Committee, is leading the charge, with a bill potentially landing in parliament by June or July[1][2].
The intention behind this move is clear: make the property market more transparent and safeguard folks from con artists. Currently, around 10-15% of property transactions are done with cold hard cash, and those are the hotspots for criminal activities[1]. Unfortunately, between 2022 and 2023, the number of individuals unjustly losing their housing rose from 6 to 8 thousand, causing damages to rise from 32 to a staggering 42 billion rubles[1].
If this law sees the light of day, you'll no longer be able to buy apartments or houses with bags of cash. Instead, bank or electronic systems will be the only routes for transactions[1]. This isn't just about tracking the money; it's about shielding people from scams too[1].
This move isn't entirely unexpected. Many countries have already adopted similar practices, and it seems Russia is jumping on the bandwagon[3]. As Razvorotneva puts it, "We've been due for this change for some time now."
The real estate sector isn't forecasting a significant price hike due to this potential ban, as a large number of transactions are already being executed through other means, and cash-based deals often involve underreported values[2]. This regulatory shift is part of a broader strategy to minimize cash transactions across various sectors, including cracking down on cash-to-crypto exchanges to combat fraud[3][5].
[1] - Gazeta.Ru[2] - RBC[3] - RT[5] - Reuters
- In the near future of 2023, you might need to reconsider your plan to buy a dream apartment with cash, as Russia is considering a ban on such large transactions.
- The proposed bill, led by Svetlana Razvorotneva, aims to make the real estate market more transparent and protect citizens from fraudsters, reducing the hotspots for criminal activities.
- Cash transactions, accounting for about 10-15% of property deals, have been linked to a rise in unjust housing losses, with damages escalating from 32 to 42 billion rubles between 2022 and 2023.
- If the ban is implemented, buying apartments or houses with bags of cash will no longer be possible; bank or electronic systems will be the only channels for transactions, providing a way to track money and safeguard people from scams.
- Following the footsteps of numerous other countries, Russia seems to be embracing this change, recognizing it as a necessary step in its industry, finance, and business sectors, including the banking-and-insurance industry, policy-and-legislation, and politics.
- Apart from the real estate market, this regulatory shift also forms part of a broader strategy to minimize cash transactions in general news, such as cracking down on cash-to-crypto exchanges to combat fraud and curb money laundering.
