Under declaring on sale of house
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Under declaring on sale of house
I didn't know it still went on, but a friend of a friend has been approached with an offer for her house, including a proportion of money to be given over in cash.
I can see that it benefits the buyer as they have to pay 7% transfer tax, but is it of any benefit to the seller?
Evidently the potential buyers have used the excuse to drop the offer price down by a further 10,000 euros.
I can see that it benefits the buyer as they have to pay 7% transfer tax, but is it of any benefit to the seller?
Evidently the potential buyers have used the excuse to drop the offer price down by a further 10,000 euros.
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Re: Under declaring on sale of house
This does still go on but the cash element is usually much less than before. In any event the escritura value should not fall below the official fiscal value of the property which is obtained by applying the municipal multiplier to the valor catastral.
If the seller is a non-resident it means that the 3% retention will be lower and the capital gain will be less.
The seller must decide if he is prepared to lose a sale for the sake of sticking to his principals not to mention consideration of the provisions of the law on fiscal fraud.
If the seller is a non-resident it means that the 3% retention will be lower and the capital gain will be less.
The seller must decide if he is prepared to lose a sale for the sake of sticking to his principals not to mention consideration of the provisions of the law on fiscal fraud.
Let's go Brandon!
Re: Under declaring on sale of house
They have to consider what they will do with the cash if it is a substantial amount. No bank will accept over a few thousand cash without a paper trail. Will they be happy to have all this cash lying around the house. Also if you don't know the buyer well there is a risk of forged notes (has happened before)
Re: Under declaring on sale of house
And also beware that that cash proportion may not actually be given after the signing and therefore you have no recompense,if you do have to then receive / and bank before signing.
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Re: Under declaring on sale of house
Good points.
It also occurs to me that if they are leaving Spain what would they do with the cash? They have to get it out of Spain and into the UK, and then change it into pounds.
It also occurs to me that if they are leaving Spain what would they do with the cash? They have to get it out of Spain and into the UK, and then change it into pounds.
Re: Under declaring on sale of house
Someone who I knew sold their house two years ago and accepted a large cash amount (despite being warned by their Lawyer and friends). They arranged to deposit the money in a euro account in Gibraltar and fly directly out of there. The banks would not accept it. They flew to the UK (the money could have been confiscated over a certain amount) Same happened so they contacted the buyers and asked them to give them a UK cheque instead. They did the exchange in the UK and the cheque bounced! Don't know if it got sorted as lost touch with them.
Re: Under declaring on sale of house
"asked them to give them a UK cheque instead. They did the exchange in the UK and the cheque bounced! "
there´s one born every minute !!
there´s one born every minute !!
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Re: Under declaring on sale of house
We were asked to do this when we bought our house.We refused
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Re: Under declaring on sale of house
Still goes on in the Cadiz area and is even mentioned openly on some agents websites...
The world is becoming a smaller place so is it all worth 7% ?
The world is becoming a smaller place so is it all worth 7% ?
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Re: Under declaring on sale of house
Spain is almost as bankrupt as Greece. Why on earth do the tax authorities not stamp down on these criminals?
- janda_grant2
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Re: Under declaring on sale of house
At the moment with the state of the worlds banks, at least the black money from the sale of a house may cause a lumpy matress, but at least you know where it is and that it's safe!!!!
I can spell but I can't type
Re: Under declaring on sale of house
The situation perhaps varies from region to region - we were told by an agent in the Baza area that black money is still the norm but not to worry about it!
dos cervezas por favor
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Re: Under declaring on sale of house
They are clamping down, but one of the problems here in Spain is everything is over complicated.So many people just try to bypass the system.ashtondav wrote:Spain is almost as bankrupt as Greece. Why on earth do the tax authorities not stamp down on these criminals?
Re: Under declaring on sale of house
it does still go on, the thing is I found it imposible when buying from a spainard not to have to do the deal without some black money. we walked away from a few.
When I sold, the write down value and declared was done by euros on the day,
the rest by English bankers draft. which was checked the day previous
In fact some one we done a removal for recently done the whole lot in £s,!! and through a English solicitor who done the funds etc.
Brillient benefit to the buyer and seller as no messing arround in Cash and loss of money due to exchange rates for either party, the legals paperwork were done the normal way at the notaries.
The more inland you go I would imagine the worse it gets, made me laugh to think that buying a house its normal to carry a bag full of cash, yet I heard it was ilegal to carry over a certain amount??
When i bought my first house in Spain, couldnt get over the fact that i had a bag full of it, and in the notaries it was being divided up by everyone! didnt understand who I owed and what i owed,
all I know thinking back, like most folks years ago,I left my Brain at home!!!lol.
yet back here in the UK, even If i even suspect im 50p short, Im there
Its a headache but it does still gos on,
all the best
Big Col
When I sold, the write down value and declared was done by euros on the day,
the rest by English bankers draft. which was checked the day previous
In fact some one we done a removal for recently done the whole lot in £s,!! and through a English solicitor who done the funds etc.
Brillient benefit to the buyer and seller as no messing arround in Cash and loss of money due to exchange rates for either party, the legals paperwork were done the normal way at the notaries.
The more inland you go I would imagine the worse it gets, made me laugh to think that buying a house its normal to carry a bag full of cash, yet I heard it was ilegal to carry over a certain amount??
When i bought my first house in Spain, couldnt get over the fact that i had a bag full of it, and in the notaries it was being divided up by everyone! didnt understand who I owed and what i owed,
all I know thinking back, like most folks years ago,I left my Brain at home!!!lol.
yet back here in the UK, even If i even suspect im 50p short, Im there
Its a headache but it does still gos on,
all the best
Big Col
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Re: Under declaring on sale of house
It is worth remembering that, if you are tax resident, then the problems that can arise when you sell with regard to an inflated capital gain are not an issue in most cases, as you pay no capital gains tax if you reinvest in another house.
Most Spaniards will be tax resident so you can understand why they are so keen to under declare as they have nothing to lose and 7% tax to gain.
Sid
Most Spaniards will be tax resident so you can understand why they are so keen to under declare as they have nothing to lose and 7% tax to gain.
Sid
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Re: Under declaring on sale of house
I have just completed on a house at much less than the fiscal value. It was for renovation so I only paid for the shell.
I have now been sent a further tax bill for the price that the Junta think is right for that area. It is more than the original total tax bill.
I have appealled but don't know what will happen as I don't have that sort of money to spare. I suppose they have to try to get as much in as possible in their current financial situation, after all the English are all rich!!
I have now been sent a further tax bill for the price that the Junta think is right for that area. It is more than the original total tax bill.
I have appealled but don't know what will happen as I don't have that sort of money to spare. I suppose they have to try to get as much in as possible in their current financial situation, after all the English are all rich!!
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