Re: Black Money
 

Hi Keith,

More often than not, you will find that the bank will lend you 80% of the bank valuation, regardless of the price of the property. Their concern is securing the amount they will be lending you against the property value should you default.

Sometimes the bank valuation is lower than the actual selling price, sometimes it is higher (hence the 100% mortgages), and sometimes it is the same (but not very often). You will find that bank valuations differ from one bank to another and that there is a cost involved in order to get the property valuated. One bank usually doesn't accept the valuation of another!

Re: Black Money
 

Well, that's good news. At least I know now that if I pay black it won´t affect my ability to borrow from the bank.

Re: Black Money
 

Friends lost two house's because of black money, the bank would only loan them the amount that was going to be officially noted on deeds. A lot of Spanish/Portugese sellers seem happy to play the waiting game and hold out for the black money, I say Portugese because both the house's they lost were in Portugal.

Re: Black Money
 

I believe that they will sometimes pay over the valuation to include a sum for furniture etc. Also they sometimes don't tally the valuation with the actual purchase price...so they will give you say 80% of the valuation which may be higher than the actual purchase price.

Re: Black Money
 

I´m glad you mentioned sellers holding out for their black money, and also holding out for the asking price. There seems to be a general idea that at the moment it is a buyer´s market and you can knock people way down on the asking price, but that certainly hasn´t been my experience. I have found the sellers to be very stubborn - they all say that if I won´t agree to pay black and very near to the asking price then the next purchaser who comes along will. Hardly any room to negotiate at all.

I guess it could be a regional thing - the market being more buoyant is some areas than others.

I miss buying off-plan!!!!!!!!!!!!:(

Re: Black Money
 

Hi Keith
I dont know if the figures you use are hypothetical but if not 25% sounds like a hell of alot of black if you ask me.
As I understand it most banks will only lend you the actual amount of their valuation which can be slightly lower than the market value. As you are in Jerez and if you haven´t sorted your mortgage out yet, go and talk to the Deutsche bank (opposite the taxi rank in plaza de Marmelon near to Calle Porvera). They are very helpful and as you have a reasonable deposit you might be able to come to a satisfactory agreement.
Regards Paul

Re: Black Money
 

As you point out, it is the sellers that benefit. Therefore if you buy and you pay part of it black money, when you come to sell the property, you do the same thing to the buyer as you are now the seller.

With regards to the other query of what to do with a big wad of black cash, simply reinvest it, and there are many ways to do that. The Euro conversion was the best thing to happen for many Andalucians. There was an article in the Economist (or Newsweek, I can't remember) about a year after the change which highlighted "How Spain Saved The Euro" or something similar. Whilst recession was rife everywhere, the Spaniards in 2001 went on a spending spree to get rid of their pesetas and it was this speniding that kept the economy afloat whilst the rest of the world seemingly suffered.

Re: Black Money
 

Hi Paul - yes, I have been using hypothetical figures. I still don´t know exactly how much black I will have to cough up.
Thanks for the tip about the bank.

Re: Black Money
 

My experience in the Cadiz area on two older properties was around the 20% mark for dinero negro. I seem to remember that the sale price included the estate agent fees but it was the buyer that paid the fees to them (in these instances) - the estate agent obviously does not supply receipts so you have nothing to show the tax man when it comes to a later sale and you are trying to minimise the "profit" on the overall transaction.

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:confused:

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I remember reading somewhere that the largest amount of 500 euro notes in Europe are allocated in Spain...... and the smallest amount of 500 euros notes in circulation..... is in Spain

2 + 2 = 4

The Malaya case found bags of 500 euro notes buried in the grounds of one of the accused fincas. Now add a few more hundred thousand more localities around Spain and... what can I say!

The black money on sales, this has always been the norm here in Spain, certainly in the south. Things are starting to tighten up on what they where like although the 'black' amounts now are of course much larger than they where as property prices are now around 400% more than a few years ago. Many Spanish cannot understand why people would not agree to this, this is how they know it and how they expect it to be, especially the older or those who live in more remote areas.

The Spanish government only started to tighten up on peoples earnings and tax etc. just after they entered the EU, before this people very few paid tax or if they did it was very little for what they should have. This is back in the days when Spain was cheap... cheap... cheap, but then the EU changed all that... memories...

Re: Black Money
 

It happens a lot in France as well although using the money can be some what tricky......We sold a camper van purchased in england and sold it in France insisted for cash when the buyer turned up and then tried to pay 20 thousand euros in to the bank what a pain in the backside.....the bank wanted to meet the person that had given us the cash and sign a declaration on were the money had come from.

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I'd be scared about receiving this much cash that I couldn't tell if it was forgeries. Not having much experience of E500 notes, I doubt I could tell a bad 'un - esp. if it was anything like a decent quality fake.

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Avoid black money on property like the plague. The EU banking laws are now being enforced in Spain and Portugal and whilst not so rigourosly as in the UK large amounts of cash will become progressively more of a problem.
You never know when your circumstances may change and your "house for life" needs selling.

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Hi Ka ora!,

Not only France you walk into a UK bank with more than £10,000 in cash and try and pay it into your account and the same iinterrogationtakes place. IF you go on successive days and pay in £5000 I don't know what they do.

Regards,

John.