BLACK MONEY
 

HI,
I bought an apartment in Jan 2004 through Atlas. They were very good and guided us through the buying process, supplying a solicitor and mortgage.
When we went to the notary office, a cash payment was made to the builder, and I was told that this was the norm in Spain.
We are now thinking of selling and would like to buy a bigger place in Spain. My question is how do we go about getting the 'black money' (cash payment to builder) from the prospective purchaser of our apartment (if and when we find one)?

Re: BLACK MONEY
 

Heh heh ..... did no one explain to you what the black money was?
The answer to your question is that you have to find someone that is willing to pay you part black money for your sale, and in that way you will be mis declaring the value of your home to the authorities. And when you do find someone you have to be prepared to go through the transaction knowing that what you are doing is tax fraud.

I am absolutely gobsmaked that Atlas International involved you in a transaction where black money is concerned.

The authorities in Spain are clamping down on this at the moment ... you may want to consider taking the hit on the Capital Gains Tax on the profit between the sale and the mis declared low value at your purchase.

Re: BLACK MONEY
 

If you can find yourself an Spanish purchaser, they won´t even bat an eyelid at having to pay black money.

Foreigners on the other hand are far more cautious.

Re: BLACK MONEY
 

its the norm, dont worry too much about it - everyone does it

Just dont under declare too much ( I think its usually about 70% ) usually you can agree with the buyer what amount will be shown on the escritura long before going to the notary office - If I was selling I would make sure that amount was agreed even before gettign a deposit, then everyone knows where they stand

Blank money in Spain is riff and a way of life :unsure:

Re: BLACK MONEY
 

Thanks for the replies.
Does this affect the price advertised by
estate Agent?

Re: BLACK MONEY
 

It is very difficult to know what to do for the best. We underdeclared on our house we bought from a Spaniard and then when we sold to English they refused to do this so it looked like we made a big profit. As long as you have owned for 3 years as a resident and are reinvesting the whole amount you get into the next place CGT isn't a problem.
Estate agents will ask you how much you want, then they put their commission ontop, then advertise at that total price. The black money would only be discussed when you get a buyer and it would be up to them how much they want on the escritura and how much to pay black in cash.

Chris

Re: BLACK MONEY
 

Rightly so as underdeclaration is part of a huge anti tax evasion initiative recently introduced in Spain known as the Plan de Prevención del Fraude Fiscal which became law at the end of last year.

It is illegal to underdeclare by more than 20% and the tax authourities can fine you heavily and insist on buying from you at the declared price and selling it.

Re: BLACK MONEY
 

You say you bought in Jan 2004, can I just stress that to sell a property and not pay CGT you must have owned it as RESIDENT for 3 years and you have to prove it was your home / main residence.:confused:
I would speak to an asesor or abogado to make sure of your situation or you may get hit with a big tax bill.

Re: BLACK MONEY
 

In this part of Andalucia, if you don't/won't underdeclare, you lose the house:(

There is always someone around who WILL do it.

Our Notario asked us how much we were going to declare and the cash transaction was actually done in the Bank Manager's office.

At the tiome, we assumed that this was how one bought a house in Spain, but had we not agreed to it, we'd still be waiting for a house.:(

If/when we sell, we've accepted we will just have to pay the tax, because we don't want to do it again. It works out the same anyway.

Re: BLACK MONEY
 

It is illegal to underdeclare by more than 20% and the tax authourities can fine you heavily and insist on buying from you at the declared price and selling it.[/QUOTE]

Even the law doesn't say it's illegal to under declare as long as it's only 20% :blink:

Re: BLACK MONEY
 

Well you take the risk if you do it, as I've been told by several different sources, legal and not, that its much more of a risk nowadays than it ever was before

Re: BLACK MONEY
 

Hi, Excuse my ignorance but I understood that the Spanish Tax authorities only have 5 years to collect back tax & after that time they can't be collected so if the underdeclared property is sold after 5 years of ownership it should be ok, shouldn't it ?

Re: BLACK MONEY
 

The tax Scampicat referred to was the capital gains tax when the house is sold. If you underdeclared when you bought it then the gain will be higher.

Re: BLACK MONEY
 

Going out of fashion fast mainly because of the Madrid bombs and money laundering regulations gradually being enforced in Spain
Whilst the Spanish will still do it there is no future in any new EU buyer getting involved now
The banks now want more information when you open an account

If you do want to pay in cash then there are still opportunities but when you come to sell the number of people prepared [ or are able to] to give you cash will lessen as the years go on
For some a bit of a shame but the world changed after 9/11