Posted: Mon Jan 14, 2019 5:07pm
Hello Adrian,
I will endeavour to explain how this bizzare situation came about.
We were new to Spain back then and we had bought a property off plan and had watched it being built. The day came to pay and we were escorted by the builder to the bank. There we were instructed to put varying amounts of cash into brown envelopes and take them to the solicitor's office where we signed for the property. The envelopes were placed on a desk nearby.
At a given moment three people walked in and silently took the envelopes which were marked with what was inside and that was it.
To put some figures on it. What went onto the escritura was €80,000. We had actually paid €120,000, the balance being in the envelopes.
At that time we had absolutely no idea what was going on, we thought it a bit strange, but this is Spain, so perhaps they do things differently.
Everyone seemed happy, we had paid what was asked and the house was ours. It was not until sometime later we came across the term 'black money' and we did not even know what is was.
The final upshot of all this is, that if we subsequently sell the house for more than the value on the escritura i.e. over €80,000, we would be taxed on it, not the €120,000 we had actually paid.
All this is now acedemic as we exchanged it a few years later when we bought something bigger.
The whole point of all this was just to advise people buying property to ensure that what they pay is the figure you see on the escritura.
I hope this now makes a bit more sense.