Buying a house: €xx on deeds. €xx in cash to seller??? - Page 3

Exactly, tax fraud - not just the vendor, but also the purchaser who only pays ITP on the declared sale price.  Are you suggesting that it's OK for the prospective purchaser to implicate themselves in tax fraud and also risk being hit with a Complementary Tax bill and fine? 🤦‍♀️

Hes a grown up and responsible for his own actions. Unfortunately this situation is very common in Spain with many transactions done this way. Someone always pays at the end of the day. Unfortunately it will be the purchaser when he comes to sell. If it were me I'd give the property a wide berth but like I said, this practice is very very common.

You will have to tread carefully ,there is the government valuation of the house( catastral valor) which will be the minimum the house can sell for to avoid tax investigation,in many cases this is the value as assessed at the height of the boom,now,as property prices have plummeted in many cases the official price may actually be higher and so there will be an investigation as a matter of course as it was sold below this price,resulting in a bill around 2 years after you thought everything was settled.You can argue that you were charged extra as unfair but Spanish law is slow and a refund unlikely ( me 4 years and waiting),the black economy days are long gone get a good lawyer and pay the asking price by bankers order ,see other advice on this site they all say basically the same.

Hi Tallpaul: I would say to you directly, don’t do it!! So many members of the former have said similar to other scenarios such as yours. I am currently in the process of purchasing as well and our experience of estate agents has not been too encouraging. We have a solicitor (abogado) in place and she is adamant that such practices are not normal and not legal. Get an abogado ASAP and be guided by them. My opinion only, other opinions may differ: I do believe no matter what jurisdiction any of us originate from: the advice and guidance of legal advice is essential. Good luck with your adventure. MnM 

Sounds like our situation only the estate agent already had 6000 euro of ours from a previous deposit on a house that they sold to someone else we lost the 6000 euro and trying to fight for it is proving a nightmare

I think this practice (malpractice) is widespread.  I was asked to do it by my own solicitor (who must have been getting some kind of kickback).  I did some research and found what you've explained and so I refused.

I ended up paying 4k to the sellers estate agent anyway via my own solicitor in the notaries office otherwise the sale wasn't going ahead.  I knew I was being stung and I would have walked away but for the fact I'd got such a good price on the property being purchased.

I love Spain and buying there is the best thing I've ever spent any money on, but I don't think most people from the UK realise just how corrupt officials and professionals are.

Regards,

Nessy

My guess is that pressure comes not from the seller but their agents with the tax saving being shared among the selling parties.

I have been through this arrangement and must say that if you pay cash and this doesn’t appear on the deed, means you have purchased for a lower price, this means when you sell the profit may look greater so this means you will pay more tax when you sale takes place.

Hope this helps.

If you do this, when you sell, you will pay capital gains tax on the difference between your official purchase price and your selling price. You should confirm this with your solicitor person wouldn’t do it good luck

Yes, the OP is a grown-up - who had the good sense and instincts to ask for advice about a situation he hasn't previously experienced.  I'm sure he feels much happier about how to proceed now that he knows the practice is illegal.  I notice that you've deleted your original post; whether this practice is "very, very common" now, as it was pre-2008 crash, is irrelevant as it would cut him no slack whatsoever with the Spanish tax authorities.