In the past three months of 2020, the market has seen a billion euros in cash flow. Is this money controlled, and where does it come from in terms of its origin when buying? More than 80% of real estate transactions were paid for by the parties themselves, and the remaining 20% were on credit. However, there is no data yet on how many credit funds have emerged during real estate transactions as cash. If a citizen buys an apartment from someone else on credit, the second person can then use their funds to buy two smaller apartments. It can continue from there, meaning the money originally obtained from the credit will appear multiple times in real estate transaction statistics as a cash purchase.” This is what the Serbian Chamber of Notaries says, citing an assessment that most apartments in that country are bought in cash, despite the average salary being around 500 euros, which raises the question of whether the origin of the money is being controlled and whether it exists at all when buying real estate. The notaries have a statement "that the concept of cash is being misinterpreted when it is said that most real estate transactions in Serbia are taking place in cash. This topic has been tackled by the Belgrade newspaper Politics, which began from the data that around a billion euros in cash had flowed through the Serbian real estate market in the past three months of 2020. Around 130,000 real estate transactions took place in 2020, with 80-90,000 of those being apartments. 80% of those apartments were purchased in cash. Apartment prices in Belgrade reach up to 3,000 euros per square meter, while prices in the rest of the country are less than 800 euros. Who can afford to pay for an apartment in full if, according to the laws, transactions above 10,000 euros cannot be made in cash, and people wonder in the analysis. Is this a form of money laundering? Tax experts say there is definitely some of that, but it is not necessary for it to work that way. “If you sell a larger apartment to buy a smaller one and take out a loan, there's no money laundering here. There are people who cannot prove this, but the procedures are not being initiated”, says tax expert Đerđ Pap, a former director of the Tax Administration. He emphasizes that the enacted Law on the Origin of Property is not being enforced. However, experts in the market and real estate agents warn that if there are suspicious transactions, they do not necessarily go through the legal channels, through real estate agencies, which are required by the Law on the Prevention of Money Laundering to conduct all risk analyses. “Those who hang a sign on the construction site saying 'direct sale' do not have the obligation to conduct risk analyses, they do not have to ask the customer anything or report suspicious monetary transactions”, says agent Kaća Lazarević to Politika. According to her, those who have more money buy in cash. “And they don't buy just one, they buy multiple apartments, as they have realized that this is the safest investment in a crisis, and the best are new constructions. Many have decided to invest their money from the bank or safe in real estate – apartments, business spaces”, Lazarević emphasizes. However, real estate agents are not the main problem, the bigger problem is construction, says FEFA Faculty professor Goran Radosavljević. “A large volume of money is laundered through construction that is impossible to control. Cash enters through construction and then those who sold the land on which a building will be built appear as cash buyers. Such a high level of construction activity has no economic meaning regardless of all the explanations. That people are returning from abroad and investing is true, but it's not nothing”, says Radosavljević, and emphasizes that everything suggests that there are illegal activities, but if the state were to stop them, there would be a 10% decrease in GDP. Source: Poslovni.hr

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