contracts and interim payments
you please advise me on the above. I hope to buy a house in Spain and have not
yet signed a contract. The builders want cash payments at separate stages. Why
can we not pay by cheque? We have also been told that we can have our property
taken off us for no reason. Is that true.
Thanks for your query.
In Spain some building companies charge payments in cash as a tax evasion ploy. If they receive cash they can avoid declaring it so that it becomes "black money" which they do not reveal to the Spanish Inland Revenue (Hacienda). They then use the black money to pay expenses such as illegal wages, materials etc. thereby reducing their declared costs. If you pay by cheque, the building company has to pay the cheque into its bank account, which means the money becomes visible, and must be declared to the Inland Revenue and be subject to the legal taxes.
If you make cash payments for
your property, 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:
You should really get an expert to check the contract before you sign it, to make sure that your rights (and money) are protected. If you tell us where your property is, we may be able to recommend someone to you.
As far as your last query is concerned,
who has told you that property can just be taken off you? The builders? Certainly
if you do not sign a contract and hand over cash payments, then you do run the
risk of losing the property and your money, because no legal document verifies
the sale or the payments. Also there have been some stories in the news lately
owners in the Costa Blanca losing part of their property because of local land
laws - are you referring to that maybe?
If you are considering buying or selling property in Spain and have a question, write to us and we will try to help. We may also publish your question here to help other potential property buyers in Spain.
|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.|