In Bulgaria, things move slowly in the right direction

In December 2007, cash purchases of property in Bulgaria were to be effectively outlawed. There was a proposal that there should be a law limiting financial transactions in cash to 10,000 leva [Dh28,070] and under, which would mean that almost all deals on commercial and residential property would have to be handled via bank transfer, with a paper trail automatically created.

Back then there were some 600,000 real estate deals closed in the country each year and tax evasion was a major problem, especially as the country tried to satisfy European Union membership criteria.

But the property downturn intervened and Bulgaria's real estate woes centred more on the dramatic 75 per cent drop in transactions than on the probity of deals themselves. The law did not come into effect and the idea was placed on the back burner.

Now it is on the agenda again, coming into effect in January. This time all property purchases will be via bank transfer, making money laundering and corruption more difficult and also ensuring stamp duty and purchase tax will be paid by all purchasers.

Bulgarian authorities promise there are more reforms on the way to regulate property purchase, estate agents and developers' build standards, all to assuage the fears of overseas buyers that the market is worth investing in. The fear is that without regulation, it may become as ramshackle and unregulated as the market in Spain, which has become a global symbol of property anarchy.

Bulgaria is, of course, doing the right thing.

But wouldn't it have been better to make that move when the country was selling 600,000 properties a year, instead of now – when many people have already been deterred?

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