Rasim Ljajić, Deputy Prime Minister of Serbia and Minister of Trade, Tourism and Telecommunications: WE ARE CONTINUING TO REGULATE LEGISLATIVE FRAMEWORK

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Today, agencies and citizens are buying and selling real estate in an environment where there are greater legal certainty and significantly higher quality of services

 

We have talked to Rasim Ljajić, Deputy Prime Minister of Serbia and Minister of Trade, Tourism and Telecommunications, about the current situation in the real estate market, the relevant legislative framework and the existence of shadow economy in this sector.

What are the results of the implementation of the Law on Real Estate Brokerage Services?

— The law brought order into a completely unregulated area, so the real estate market is much more orderly today than before 2013. Today, agencies and citizens are buying and selling real estate in an environment where there is greater legal certainty and significantly higher quality of services, while before anyone could have mediated in the sale and lease of real estate. The fact that every interested apartment buyer can check whether a particular real estate agency is registered with the Register of Real Estate Brokers, which our Ministry manages, had a strong impact on regulating the real estate market. By being registered with both the Business Registers Agency (APR, in the Serbian language) and the Register of Real Estate Brokers, real estate agencies are also more accessible to state authorities and the state authorities can now check their work. There are currently 850 real estate agencies from all over Serbia registered with the Register of Real Estate Brokers that meet the criteria for legally performing real estate brokerage services. We will continue to improve the legal framework to further regulate this business activity. Last year, by adopting amendments to the relevant law, we introduced strict-er conditions for brokers whereby they can engage in buying and selling of real estate only if they were not criminally convicted. In this way, the law was harmonized with the Law on Prevention of Money Laundering and Financing of Terrorism. This is important considering that the new Nation-al Strategy Against Money Laun-dering and Financing of Terrorism puts real estate brokers in the medium-risk category.

How many agents have passed the certification exam so far?

— Since October 2014, i.e. since the certification exam for real estate brokers was introduced, a total of 3,210 persons have been certified. The fact that the law stipulates that at least one employee in a real estate agency must have a license obtained as a result of passing the certification exam has also additionally regulated this market because agents come in direct contact with citizens who buy or sell real estate and it is very important that the citizens are well instructed in terms of their rights and obligations.

What are the results of curbing the shadow economy in this segment?

— To begin with, we should note 5that we are yet to receive an official complaint from citizens or companies relating to the existence of unregistered real estate brokerage. Only in one case, during a thorough inspection, the Market Inspection found that the agency in question was registered with the APR but was not registered with the Registry of Real Estate Brokers, after which they were immediately banned from performing real estate brokerage services and a lawsuit against them was filed with a misdemeanor court. Another special aspect of the work done by the real estate brokers is advertising activities which are increasingly done online. Market inspectors now have to perform additional searches and controls, since the only way real estate can be advertised for sale or lease is solely with the consent, that is, the contract between the agency and the owner.

What is your position on global rental platforms? What changes did these platforms bring to the tourist offer in Serbia?

— Global platforms for renting apartments have certainly made a positive contribution to the development of Serbian tourism, in many ways. First of all, our tourist offer has been made visible throughout the world, because some of the biggest websites, such as Booking.com and Airbnb, are used by a huge number of tourists globally, which certainly contributed to the promotion of Serbia as a tourist destination and a greater influx of foreign tourists. Last year, the users of Booking.com rated Serbia among the 10 most respected host countries. These platforms have also shown that we have a financial-ly affordable quality offer, which boosts the attractiveness of our country. However, the ever-increasing use of this supply channel has further drawn attention to the vast grey area in which individuals rent accommodation according to a model popularly called “apartment for a day”. Although we have been dealing with this problem for years, the shadow economy has become more apparent through these new platforms, because unregistered owners of apartments, who are not that easily traceable, advertise in large numbers. This made us even faster in systematically resolving this problem by adopting a special catering law this year which facilitated the business by allowing individuals to rent without having to use an intermediary. Now, they are also obligated to pay a precisely deter-mined annual lump sum tax via a simple procedure. This will make the domestic offer even better, namely accommodation owners will now operate in a well-organized system without unfair competition. At the same time, more collected tax will increase the revenue of municipalities and cities that can be used to boost local tourism.

How much real estate has been rented under this law?

— Following the adoption of the new Catering Law, and especially since the beginning of the implementation of the new lump-sum tax payment on 1st July, there has been an increasing number of requests from ordinary citizens regarding the categorization in leading tourist destinations in our country which are the first positive signals that show that new measures are rooting out the shadow economy in this sector. To illustrate this, I would like to mention Bel-grade where, until recently, only 2,500 beds have been categorized. However, since the implementation of the new law, close to 300 new categorization applications have been submitted. This data shows that citizens have finally realized that it is much more profitable for them to do business in accordance with the law. Also, the message to all of us is that it is necessary to create an environment that will stimulate people to do business legally, which, I hope, is achieved through a whole set of new measures.

TELECOMMUNICATIONS
In addition to real estate, we also spoke to the Minister about 5G network and abolition of roaming charges.

The first 5G base station in Serbia recently became operational. When will the Minis-try launch an auction for the sale of the free segment of the frequency spectrum for the introduction of 5G technology?

— The sale of the 5G spectrum is planned for the third quarter of next year, and we are probably going to choose a solution whereby we do this through selling the range in stages, at several auctions. Taking into account the latest global trends, Serbia is seriously considering the idea of assigning a part of the spectrum to the development of smart cities and industry. Speaking of the expected revenue, we need to bear in mind that spectrum purchasing is only part of the 5G technology investments that are very substantial, so the auctions should be an incentive for further investment.

What economic effects do you expect to see from the reduction in roaming charges when it comes to tourism and economy?

— At this point, the citizens will feel the biggest effects of reducing roaming charges in the shape of cheaper calls and more accessible use of the Internet. At the same time, this solution is good for operators as they will compensate the lower revenue with the growth of traffic volume because citizens will now use many roaming services to a greater extent, so we do not expect negative effects for operators.

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