The Prosecutor General’s Office in Russia is backing a proposed ban on cash transactions for real estate purchases. This initiative, championed by Svetlana Razvorotneva, aims to combat the rising number of fraudulent real estate deals.

The move comes in response to alarming statistics highlighting the prevalence of real estate fraud. In 2022, over 6,000 fraudulent transactions were recorded, and this number surged to over 8,000 in 2023. These scams have resulted in Russians losing their apartments and incurring tens of billions of rubles in damages annually.

Razvorotneva emphasized the necessity of the ban as part of a broader system to safeguard real estate sales. The proposed law seeks to establish clear regulations for individuals and entities involved in facilitating real estate transactions.

While a complete ban on cash transactions might seem drastic, industry experts suggest that its impact may be limited. According to Valery Tumin, only a small percentage of real estate deals currently involve cash. Tumin estimates that cash transactions account for merely 10-15% of the market. However, these transactions are often associated with disputes and criminal activity, such as bill substitution or double sales.

Experts argue that non-cash payment methods offer greater security and transparency. Electronic transfers provide a verifiable record of payment, bank confirmation, and legal recourse in case of disputes, mitigating risks for both buyers and sellers.