How Uzbekistan's transition to cashless payments will change the real estate market: Prospera Capital's opinion

Starting in April 2026, large transactions worth over 25 million soums in Uzbekistan will become exclusively digital. Doniyor Islamov, Managing Partner of Prospera Capital, explProspera Capital Исламов Дониёрained how this will impact housing prices and investment inflows.

The decision to ban cash payments for real estate and car purchases has become one of the most discussed economic reforms. Doniyor Islamov, managing partner of the real estate investment fund Prospera Capital, discussed the market implications and why the expert community considers this move inevitable.

According to Decree No. UP-246 of the President of Uzbekistan dated December 10, 2025, effective April 1, 2026, a requirement for transactions over 25 million soums—including real estate purchases—to be conducted exclusively in non-cash form will come into effect. This decision could radically change the market structure, reduce the size of the shadow economy, and increase the transparency of financial flows.

Cash as a source of market distortions

According to experts, between 30% and 50% of Uzbekistan's economy operates in the shadow economy. The main driver of this is the widespread use of cash in large transactions.

Cash allows you to:

• hide the real value of objects;

• diverting tax revenues;

• conduct grey financing schemes;

• support corruption mechanisms;

• to form "double prices" for real estate.

"Cash payments create a distorted market environment in which honest players are forced to compete with gray market participants. Cashless payments make transactions more transparent, reduce risks, and create a predictable economic model," said Doniyor Islamov.

Why the state is taking this step: global experience

Restricting cash payments is an international practice already widely used in countries with rapidly developing markets and ambitious goals to reduce the shadow economy:

• India increased tax revenue by more than 20% in two years after demonetization reform;

• Türkiye has reduced the shadow real estate turnover by 15-20% by strengthening control over payments;

• Russia - after the ban on large cash transactions, there was an increase in the collection of personal income taxes on housing sales and a sharp decrease in the number of illegal transactions;

• The European Union is even stricter: in France the limit is €1,000, in Italy – €5,000.

Doniyor Islamov believes that there are four main goals of this reform in Uzbekistan:

• reduction of the volume of “shadow” capital;

• formation of transparent financial flows;

• strengthening the banking system;

• increasing the confidence of international investors.

What will change for developers?

The real estate market will be one of the main targets of transformation.

An expert from Prospera Capital predicts several important consequences:

1. Prices will become closer to real levels. Without the "surcharge" for cashless payments, the market will move toward more objective pricing.

2. Banks will become key project partners. Transparent sales facilitate construction financing, thereby strengthening the position of officially operating developers.

3. Gray-market transactions will decline. Dubious schemes involving unaccounted funds will no longer be able to exist in their current form.

4. Consumer confidence will grow, especially among the legally secure middle class.

Ultimately, the companies that initially operated legally win.

How will the reforms affect investors?

Advantages:

1. Risk reduction. Cashless payments reduce the risk of double sales, fictitious contracts, and fraud.

2. Greater access to credit. Banks are more willing to finance investment deals when they see transparent cash flows.

3. Increased liquidity. A transparent market attracts institutional investors, including international capital.

Restrictions:

1. The disappearance of shady profit-making schemes. Inflated "cash premiums," undercutting prices, or "flip-operations" are no longer possible.

2. Increased tax burden. Avoiding income tax (12%) on sales within three years will become impossible.

3. Official income requirement. Purchasing a property without verified income may become significantly more difficult.

Nevertheless, this reform is a step towards market maturity and predictability.

Prospera Capital's expert opinion

The investment fund Prospera Capital supports the reform, considering it a necessary step in the development of the country's financial ecosystem.

"No serious market can be built on cash. Cash distorts the economy. It creates risks for consumers, investors, and the state. The transition to cashless payments is not a technical upgrade, but a fundamental restructuring of the rules of the game," notes Doniyor Islamov.

The fund believes the new policy will open access to Uzbekistan for longer-term and more professional money:

"When the market becomes transparent and structured, institutional investors enter the country. This increases liquidity, development standards, and ultimately strengthens the value of high-quality assets," emphasized Doniyor Islamov.

A window of opportunity for investors

Prospera Capital estimates that a potential price correction during the adaptation period creates a rare opportunity to enter projects with long-term potential, particularly in growing locations in Tashkent.

"The transition period always gives an advantage to those who understand the logic of the market and make decisions before others," says Doniyor Islamov.

What is Prospera Capital and how does it operate under the new conditions?

Prospera Capital is a closed-end real estate investment fund operating in accordance with the principles of Islamic finance. The fund is structured in accordance with the laws of the Republic of Uzbekistan and focuses on ethical investments backed by real assets.

The fund's main principles are transparency:

• legally transparent transactions;

• only verified developers and projects;

• deep expertise of the real estate market;

• regular reporting to investors and independent financial audit.

Prospera Capital positions itself as an investor's guide through the changing real estate market.

"We work on the investor's side, ensuring not only profitability but also capital security. The new reform makes this model even more effective."

Uzbekistan's move away from cash in large transactions is a painful but strategically sound move. The market will adapt, but in the long run, the country will gain:

• a more honest economy;

• civilized real estate market;

• increasing investor confidence;

• strengthening the banking system;

• development of institutional capital.

This decision could be the starting point of a new investment cycle – and Prospera Capital is already ready to work within its framework.

Source: spot.uz