Containing ‘gray’ transactions
The government announcement on the mandatory use of bank transfers in property sales is another step in stopping the flow of undeclared income in this market. The circulation of money in physical form can perpetuate tax evasion, keeping the “gray” economy at a very high level.
“A property transfer can be carried in three ways nowadays: in cash, with a bank check or with an electronic money transfer. With the new measure the first two forms are mainly abolished and the third way is imposed as mandatory,” says the head of the Athens-Attica Realtors Association, Lefteris Potamianos.
Of course, removing cash from real estate contracts will not stop the use of undeclared money. Industry insiders say since every transfer is a transaction between two private individuals, it is sufficient that both are willing to cooperate to overcome the ban on cash.
“It is enough, for example, for part of the amount to be given in cash just outside notary’s office and then sign the contract, without the notary being able to intervene,” says a market agent. Nowadays, such operations are carried out without bank mediation, not even in the money transfer part, however it is a small percentage of all transactions made.
