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Black Money/Completion

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  • Black Money/Completion


  • #2
    I am very glad that you have not named the estate agent as this allows me to be a lot more clearcut.

    Simple question - who do you trust, a Spanish profesional with his reputation and livelihood to consider or a guy who was quite possibly stacking shelves in Derby or Dublin 6 months ago and will quite likely be doing the same in six months time?

    My view is 100% clear. If I buy a house I want every penny declared and if I sell a house I want every penny declared. No, "ifs, buts or maybes."

    If you want to save yourself 2,300 (?) today and run the risk of a tax investigation at a later date that is entirely up to you. If you want to walk around Torrevieja with your socks full of greenbacks again that is your choice. (Just how would you explain that to the policeman?!?!?!?) If you want to end up with a higher CGT bill in years to come when the Spanish authorities tighten this up then pay cash now.

    Go to the notary - with or without your agent - and get everything 100% legal from day one is my advice and my opinion which I am at liberty to make and you are at liberty to accept or reject. One thing, I know is that you WILL get alternative advice from people who are, as we speak, sleeping with the Sword of Damaclese swinging over their beds!!

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    • #3

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      • #4
        Seems to be standard practice here. My Lawyer, very respectable established firm, explained about the Black/White Monies. White monies should be of a sufficient amount to relate to the value that the Tax Authorities estimate on your type of property, the Black Money is just that, that bit on top that is tax free. It is in your own best interest to pay as much White money as you can as this will be the figure that future CGT is based on if you are liable. Was quite stunned by all this then I read it in one of the local papers in answer to a question like yours. It is a Spanish Practice.

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        • #5
          I also take on board what Steve is saying but when our solicitor suggested paying the full price we decided to agree. She then contacted the builder for the 100% price for the contract but came back to say that he told her that as we had already paid a stage payment against the contract price he had already declared on all of the apartments in our complex she could not do anything about it but draw up the contract in the amount stated by the builder. My husband ended up carrying some 15000 euros hurredly through the streets with his hand on his inside pocket over the money all the way to the agents offices.

          We were guided by what the solicitor said although she did say that when we came to sell the property we would have to pay the CG tax on the difference or carry out the same practice - sell by contract at a lower price and accept cash (black market money) for the rest.

          Hopefully selling our property will be a long way away for us as we have no intention of selling but I sometimes wonder how our relatives will get on if left to sell the property after we are no longer here.

          Anyone know what happens?

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          • #6
            JWhite - I had an experience very similar to yours. I would have loved to make a full declaration but was pretty much forced into the other between solicitor and builder. I will use a different solicitor and do things differently next time.

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            • #7
              We dont have experience in this matter but we are to buy very soon in spain, and we have already decided before we find somewhere that whatever is the asking price is the price we will pay everything legal, nothing under the table.
              I am used to buying houses in england and i will keep to the traditional this when i get to paying for a house there.
              The problem with black money is you need to trust a lot of people because once that money leaves your hands its your word against theirs, as well established as they may seem to be.

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              • #8
                Would you believe that there was a room at the Notaries set aside to count the Black Money. I said to my solicitor that one of these days they would be robbed. She just shrugged her shoulders and said it was the way things were done.

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                • #9
                  Child prostitution was rife in Victorian London. It was "the way things were done." Voodoo is rife in Haiti. Chidren were sent working up chimneys in years gone by. That IMHO does not make it right.

                  This is one of these subjects where the only thng most people are going to agree on is to disagree. It's nice that we have been able to do so politely and in a civilised manner. Thanks.

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                  • #10
                    I bought a resale in January last year and handed over a large wedge of cash (at which point my wife asked for a receipt - how we laughed as the Spanish faces turned to stone). At this point I did not understand the full implications of the CGT charges that we could face if and when we sell the property at a later date. Consequently I now have to ensure that if and when we sell the buyer is agreeable to do the same as I did, or I will have to take the hit.

                    However much you may want to do things by the letter of the law you may find that the system gets in the way (incongruously). How hard you fight this depends on how strongly you feel about doing things the right way.

                    Given the opportunity to wind back the clock, however, I would probably choose to pay the full price (i.e. no black money) as you're less likely to lose out at the other end, and who knows what the situation will be then? It's (almost always) the practice to pay black money now - what about in 5, 10, or 15 years time?

                    Chris.

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                    • #11
                      Black money?Completion

                      Does anyone know what would happen if you point blank refused to part with the money and, say, paid by bankers draft. Could the builder refuse to complete, if so, what grounds (in law) would he/they have?

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                      • #12

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                        • #13
                          Rightly or wrongly, we too paid the lower amount and we are now on our 2nd property.

                          However, the one thing we didnt do was walk through the streets of Torre with a bundle of cash.

                          We completed under power of attorney and all our money was transferred to our Spanish lawyer who dealt with the payment of the closing proceeds.

                          Our lawyers are also a well established firm of long standing with a solid reputation and we used them for two purchases and one sale.

                          My advice on this matter would be to let them handle the completion and dont expose yourselves to the genuine risk of walking the streets with a bundle of cash in your "sky rocket".

                          BTW, in saying what Idid about the risk of walking the streets, I mean no slight against Torre, I would say the same for any town, anywhere in the world!

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                          • #14
                            Black money/Completion

                            Can anyone tell me which builders will not complete without this money?
                            Thanks

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                            • #15
                              You will find that all the builders are the same. Either through cash deposits or other ways the Black Money gets paid I'm afraid.

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