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  • #16

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    • #17
      I have not yet been in the position of having to deal with the issue of the cash payment. I have told my estate agent that I will reluctently go along with a modest under declaring of value. I know that builders get greedy to avoid tax but the thought of having to persuade a future buyer to continue with the under declaring is worrying. The prospect of paying 35% on the supposed profit also stresses me out. I have a great deal of sympathy for people in this situation. The last thing we should do is to lecture them for silly or weak. I will be reaching this stage soon and already it is making me fill stressful.

      I have a contract like all the others who have posted on this subject and it simply says the price. There is no agreement to participate in the custom of under declaring. Surely under declaring needs both parties to agree a figure. I cannot understand how the builders can so successfully bully us into accepting what they want. What can they do if we don't agree their figure. In saying this I am not maintaining that all those who agreed to under declare should not have done so. I am simply trying to understand the pressure that I can expect to face at this point in the completion. I am also trying to understand how the builder can exert pressure and what can he do if we prevaricate.

      Finally, I cannot understand how useless the solicitors seem to be in supporting their clients. Don't they ever stand up to the builder and support their clients? Have any people ever successfully faced down the builder and managed to get them to back off or at least be more realistic?
      PaddyW

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      • #18
        I agree with this last comment about Spanish solicitors. Nothing in the world would have english solicitors breaking the law or helping the purchaser to break the law. In our spanish solicitor's defence she did suggest that we should pay the "whole" price when coming to the point of making the final payment pointing out to us that we would otherwise have to pay capital gains tax when we came to sell, otherwise adopt the same shady practice. However when it came to her negotiations with the builder he pointed out that we had already paid money against the under declared value at the outset (unbeknown to us, as our first solicitor recommended by Atlas did not explain this to us). We later changed our solicitor and the second one did attempt to renegotiate with the builder to keep it legal. As he had set the declared value on all the properties on the urbanisation he would not change the contract.

        I can't imagine this practice going on under the British government's nose like it does under the Spanish government's nose - all that tax not getting collected - NEVER!!

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        • #19
          I have heard very recently that a Spanish solicitor faced down the builder and the client had the full amount declared, it does prove that it can happen but the cases are very few and far between. People need to be aware of this shady business BEFORE contracts are signed, perhaps then the builder and agents will have to think again.

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          • #20
            You say we need to be aware of this before contracts are signed but it is not mentioned in the contract and often not mentioned verbally until afterwards. It is not a contractual arrangments and I can't understand why the builder always has the upper hand and why the solicitors are so wishy washy.
            PaddyW

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            • #21
              Hi All
              Sorry I have not posted back again on this, so hectic. We did not want to under declare for a few reasons. But the main ones were being worried about waltzing round with so much cash and the others the CGT when we come to sell or the IT on our deaths (not for a long time I hope). This would never happen in the UK, but as some of you have said we are not buying in the UK. Fair point. However, we want to remain as we see it "above board". Again its unfair for all those who want to pay the full amount who cant because their solicitors refuse to fight for them. Our own experience so far is that our agent and builder thought it was perfectly acceptable to under declare by approx 27%. Surely no one in their right mind would want to do this? This also shows just how greedy they are. If we hadnt questioned it (like a lot dont because their agents and solicitors tell them thats the way it is) we would now be stumping up one hell of a bung, and the only losers would be us. Our solicitor went back to the builder and they agreed for just 10% to be under declared, which was a lot better but we persisted and eventually our solicitor let us know that the builder had agreed. We have received a new completion statement with all our solicitors fees on etc and we are happy. We decided quite early on in the process that we would not be using the agents recommended solicitor as we felt they would not act in our best interest. Case proven. My advice would be use your own solicitor, it may take a bit more sorting out but its worth it. We are now looking forward to next week when we complete and hopefully unless there is a problem on the day everything should go ok and we will get our keys. Once we have got the grilles, alarm, locks, safe etc sorted (which are booked) we can relax. We will then be enjoying a few San Miguels and Riojas and saying cojones to the builder and agent. As you point out "When in Spain"
              Cheers

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              • #22
                Well said Jacpops and good luck to you regarding the builder and I hope your completion goes smoothly.
                PaddyW
                Of course we aren't told anything about the under declaring and that's what the builders and agents bank on. We only get to find out when it's almost too late. That is the beauty of this and other forums. If I hadn't joined them I wouldn't know half the stuff I do now, and most probably would be one of those who have to pay the 27-30% cash.
                It's a pity there isn't a place these forums can be advertised in the UK alongside the ads for the agents' new builds. I said loads of times that if I'd found these forums before the agents found me, I wouldn't be in the situation I'm in now. Their brochures ought to carry a mandatory health and TAX warning. All we can do is spread the word - and boy am I doing it!
                Cin

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                • #23
                  Hi all,

                  Well said "alfombra man" .... We all know it is not the correct way but it is the Spanish way!!

                  Regards,

                  Dave D

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                  • #24
                    At last we have completed on our apartment. I wondered would the day ever come after an 18 month delay.

                    Our solicitor advised us that , as she is also our tax advisor , that we declare the full value of the property. She said things are changing in Spain regarding Black money. As it turned out we took out a mortgage with the Halifax and they pay by cheque, so the decision about black money was taken out of our hands. There wasn't a peep from the builder then.

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                    • #25
                      Congratulations, it's good hear that you completed your purchase "properly".
                      I hope you will be very happy.
                      Good luck.
                      Cin

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                      • #26
                        cash payments

                        Lord Warden

                        Whereabouts in NI are you from and where is your property going to be tha you have just completed on. We are on R8 not due to complete till Dec 2005.

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                        • #27
                          dot

                          We have an apartment in Torre town centre, near Park of Nations

                          Where is R8?



                          Thanks Cin
                          I'm glad we didn't deal with black money as it would be a worry if they did clamp down on this dealing and we wanted to sell in the future

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                          • #28
                            For the life of me I cannot remember where I read this, it may have been in CBN, on a forum, wherever, anyway it was this mornng.I read that the national government now has finally realise how much money it's losing out on - no really! and has started to tighten up on these payments. I think anybody who is buying a new build should inform their agents straightaway that they are not going to pay this money and stick to their guns. Sounds like easier said than done (definitely in my case) but I'm sure that if it is made clear at the outset the builders won't have a leg to stand on - hopefully!
                            Cin

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                            • #29
                              Who on earth is daft enough to buy a 'New' build. Just get out and about a bit and go for a resale. The Costa is full of these at the moment and you will be in the driving seat. Fly out here for buttons, hire a car, complete with jackets etc etc and have a look. The newest blocks always have someone selling. either they have died or changed their minds. A bargain is there.
                              Yes there will always be Black money about but if you really push it on a resale this will be minimal. NEVER EVER put money up front. It's lost cash...

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                              • #30
                                Who on earth is daft enough to buy a new build

                                An awful lot of us by the sound of it

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