In Spain some building companies prefer payments in cash to avoid paying taxes. "Black money" is not then declared to the Spanish Inland Revenue (Hacienda). The company uses the black money to pay, its own undeclared expenses (undeclared wages to illegal workers, purchase of materials...) which, in turn, reduces the overall company costs. If you pay by cheque, the building company has to pay the cheque into its bank account, which means the money becomes visible, which means it has to declare it to the Spanish Tax Office.
If you decide to go ahead with your purchase, it is very very important that before handing over any cash at all you sign a formal, and legal, private purchase/sale contract (checked by an expert) which clearly specifies the following basic elements of the purchase and the sale agreement:
It is also highly recommended to ask for a receipt each time you make a payment and, if possible, a bank guarantee to cover these payments.
|Other useful links|
|Latest news on the property market in Spain Selection of news articles related to the real estate market here.|
|Mortgages in Spain, a brief introduction to the Spanish mortgage market, how it works and interest rates in Spain|
|Spanish banks, before applying for a mortgage, find out more about Spain's most popular banks and Spanish savings banks.|
|Property taxes in Spain, description of taxes involved in purchasing property and yearly property taxes in Spain.|
|Useful Spanish vocab for buying a house - you should learn at least the basic terms. Check out our pronunciation guide too.|
|Renting property in Spain - if you want to buy to rent, then read this section and our free notice board of property to rent in Spain.|
|Spanish lawyers - information on lawyers fees in Spain for property transactions|
|Houses for sale in Spain - take a look at the kind of houses available. Or check out our free Spain property for sale board.|