diff --git a/pkg/core/blockchain.go b/pkg/core/blockchain.go
index 4a4afba09..57da76ff2 100644
--- a/pkg/core/blockchain.go
+++ b/pkg/core/blockchain.go
@@ -13,6 +13,7 @@ import (
 	"github.com/CityOfZion/neo-go/pkg/core/storage"
 	"github.com/CityOfZion/neo-go/pkg/core/transaction"
 	"github.com/CityOfZion/neo-go/pkg/io"
+	"github.com/CityOfZion/neo-go/pkg/smartcontract"
 	"github.com/CityOfZion/neo-go/pkg/util"
 	"github.com/CityOfZion/neo-go/pkg/vm"
 	"github.com/pkg/errors"
@@ -390,11 +391,15 @@ func (bc *Blockchain) storeBlock(block *Block) error {
 		case *transaction.EnrollmentTX:
 		case *transaction.StateTX:
 		case *transaction.PublishTX:
+			var properties smartcontract.PropertyState
+			if t.NeedStorage {
+				properties |= smartcontract.HasStorage
+			}
 			contract := &ContractState{
 				Script:      t.Script,
 				ParamList:   t.ParamList,
 				ReturnType:  t.ReturnType,
-				HasStorage:  t.NeedStorage,
+				Properties:  properties,
 				Name:        t.Name,
 				CodeVersion: t.CodeVersion,
 				Author:      t.Author,
diff --git a/pkg/core/contract_state.go b/pkg/core/contract_state.go
index 1ba19cbaa..157e7dd60 100644
--- a/pkg/core/contract_state.go
+++ b/pkg/core/contract_state.go
@@ -13,17 +13,15 @@ type Contracts map[util.Uint160]*ContractState
 
 // ContractState holds information about a smart contract in the NEO blockchain.
 type ContractState struct {
-	Script           []byte
-	ParamList        []smartcontract.ParamType
-	ReturnType       smartcontract.ParamType
-	Properties       []byte
-	Name             string
-	CodeVersion      string
-	Author           string
-	Email            string
-	Description      string
-	HasStorage       bool
-	HasDynamicInvoke bool
+	Script      []byte
+	ParamList   []smartcontract.ParamType
+	ReturnType  smartcontract.ParamType
+	Properties  smartcontract.PropertyState
+	Name        string
+	CodeVersion string
+	Author      string
+	Email       string
+	Description string
 
 	scriptHash util.Uint160
 }
@@ -52,14 +50,12 @@ func (a *ContractState) DecodeBinary(br *io.BinReader) {
 		a.ParamList[k] = smartcontract.ParamType(paramBytes[k])
 	}
 	br.ReadLE(&a.ReturnType)
-	a.Properties = br.ReadBytes()
+	br.ReadLE(&a.Properties)
 	a.Name = br.ReadString()
 	a.CodeVersion = br.ReadString()
 	a.Author = br.ReadString()
 	a.Email = br.ReadString()
 	a.Description = br.ReadString()
-	br.ReadLE(&a.HasStorage)
-	br.ReadLE(&a.HasDynamicInvoke)
 	a.createHash()
 }
 
@@ -71,14 +67,12 @@ func (a *ContractState) EncodeBinary(bw *io.BinWriter) {
 		bw.WriteLE(a.ParamList[k])
 	}
 	bw.WriteLE(a.ReturnType)
-	bw.WriteBytes(a.Properties)
+	bw.WriteLE(a.Properties)
 	bw.WriteString(a.Name)
 	bw.WriteString(a.CodeVersion)
 	bw.WriteString(a.Author)
 	bw.WriteString(a.Email)
 	bw.WriteString(a.Description)
-	bw.WriteLE(a.HasStorage)
-	bw.WriteLE(a.HasDynamicInvoke)
 }
 
 // ScriptHash returns a contract script hash.
@@ -93,3 +87,18 @@ func (a *ContractState) ScriptHash() util.Uint160 {
 func (a *ContractState) createHash() {
 	a.scriptHash = hash.Hash160(a.Script)
 }
+
+// HasStorage checks whether the contract has storage property set.
+func (cs *ContractState) HasStorage() bool {
+	return (cs.Properties & smartcontract.HasStorage) != 0
+}
+
+// HasDynamicInvoke checks whether the contract has dynamic invoke property set.
+func (cs *ContractState) HasDynamicInvoke() bool {
+	return (cs.Properties & smartcontract.HasDynamicInvoke) != 0
+}
+
+// IsPayable checks whether the contract has payable property set.
+func (cs *ContractState) IsPayable() bool {
+	return (cs.Properties & smartcontract.IsPayable) != 0
+}
diff --git a/pkg/core/contract_state_test.go b/pkg/core/contract_state_test.go
index a34039aae..276e34e5f 100644
--- a/pkg/core/contract_state_test.go
+++ b/pkg/core/contract_state_test.go
@@ -13,17 +13,15 @@ func TestEncodeDecodeContractState(t *testing.T) {
 	script := []byte("testscript")
 
 	contract := &ContractState{
-		Script:           script,
-		ParamList:        []smartcontract.ParamType{smartcontract.StringType, smartcontract.IntegerType, smartcontract.Hash160Type},
-		ReturnType:       smartcontract.BoolType,
-		Properties:       []byte("smth"),
-		Name:             "Contracto",
-		CodeVersion:      "1.0.0",
-		Author:           "Joe Random",
-		Email:            "joe@example.com",
-		Description:      "Test contract",
-		HasStorage:       true,
-		HasDynamicInvoke: false,
+		Script:      script,
+		ParamList:   []smartcontract.ParamType{smartcontract.StringType, smartcontract.IntegerType, smartcontract.Hash160Type},
+		ReturnType:  smartcontract.BoolType,
+		Properties:  smartcontract.HasStorage,
+		Name:        "Contracto",
+		CodeVersion: "1.0.0",
+		Author:      "Joe Random",
+		Email:       "joe@example.com",
+		Description: "Test contract",
 	}
 
 	assert.Equal(t, hash.Hash160(script), contract.ScriptHash())
@@ -37,3 +35,18 @@ func TestEncodeDecodeContractState(t *testing.T) {
 	assert.Equal(t, contract, contractDecoded)
 	assert.Equal(t, contract.ScriptHash(), contractDecoded.ScriptHash())
 }
+
+func TestContractStateProperties(t *testing.T) {
+	flaggedContract := ContractState{
+		Properties: smartcontract.HasStorage | smartcontract.HasDynamicInvoke | smartcontract.IsPayable,
+	}
+	nonFlaggedContract := ContractState{
+		ReturnType: smartcontract.BoolType,
+	}
+	assert.Equal(t, true, flaggedContract.HasStorage())
+	assert.Equal(t, true, flaggedContract.HasDynamicInvoke())
+	assert.Equal(t, true, flaggedContract.IsPayable())
+	assert.Equal(t, false, nonFlaggedContract.HasStorage())
+	assert.Equal(t, false, nonFlaggedContract.HasDynamicInvoke())
+	assert.Equal(t, false, nonFlaggedContract.IsPayable())
+}
diff --git a/pkg/smartcontract/param_context.go b/pkg/smartcontract/param_context.go
index b4b75c45c..e5ad6142b 100644
--- a/pkg/smartcontract/param_context.go
+++ b/pkg/smartcontract/param_context.go
@@ -18,6 +18,17 @@ const (
 	ArrayType
 )
 
+// PropertyState represents contract properties (flags).
+type PropertyState byte
+
+// List of supported properties.
+const (
+	NoProperties               = 0
+	HasStorage   PropertyState = 1 << iota
+	HasDynamicInvoke
+	IsPayable
+)
+
 // Parameter represents a smart contract parameter.
 type Parameter struct {
 	// Type of the parameter