BLACK MONEY PROBLEMS

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06 Jul 2007 00:00 by morerosado Star rating in Guardamar del Segura.... 6942 posts Send private message

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06 Jul 2007 19:31 by johnone Star rating in La Reserva de Marbel.... 233 posts Send private message

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Lovely Jubbly

 

 

Johnone



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09 Jul 2007 14:25 by Gillespie Star rating in Costa Calida Area. 608 posts Send private message

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Hey that looks like my luggage when I go on holiday!!! ;+)))

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09 Jul 2007 14:46 by morerosado Star rating in Guardamar del Segura.... 6942 posts Send private message

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I saw our builder & I took a snap of him counting his black money  (or maybe it's a buyer throwing his money away,  your choice  ..

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28 Aug 2007 03:13 by morerosado Star rating in Guardamar del Segura.... 6942 posts Send private message

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Yes, I know it's dollars, they had no euros.



This message was last edited by morerosado on 8/28/2007.

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27 Dec 2007 17:50 by Lucy_GM Star rating in Spain. 20 posts Send private message

Hello! Yeah, this "black money" stuff is really weird! I mean, it´s a commonly accepted practice which is illegal, and this only can be done if you agree to it.

So if you wish you can demand the real price of the property to be reflected in the Escritura. In this cases, it´s up to you and how informed you are.

 





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28 Dec 2007 09:54 by rowlandsbb Star rating in 2010 50/50 Macclesfi.... 760 posts Send private message

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Surley as a firm of lawyers and with the current Spanish and EU anti terror/money laundering regulations you would advise your clients ' quite simply not to do it'

I am just 'Inglés' and a Chartered Surveyor but my advice to people I deal with is 'dont do it'....Spain changed after 'Madrid' and the old practice is history and fading away||

With the slow market in 2008 very few builders and sellers will  walk away from a sale if you refuse

I speak also as a buyer



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02 Jan 2008 17:48 by Lauryc Star rating in Was South Devon .. n.... 521 posts Send private message

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Everyone comments on how the black money benefits the builder.

Surely the buyer gains too? The purchase tax is reduced dramatically for them if part of the price is paid that way. ?

Just thinking out loud....

 

Laury



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02 Jan 2008 18:09 by Marksfish Star rating in Sandy, Bedfordshire/.... 2413 posts Send private message

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The buyer only gains until they wat to sell. If the new buyer won't pay black money, that 30,000€ you paid in black money becomes an extra 30,000€ profit that is liable to capital gains tax. I think I would rather pay the righttax in the beginning than be clobbered for someone else's gain later on down the road!! (That is my understanding of it anyway, I am new to this game so could have read it all wrong ).

Mark



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02 Jan 2008 21:06 by Lauryc Star rating in Was South Devon .. n.... 521 posts Send private message

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Yes but the capital gains tax depends on how old you are and how long you've lived there.

You may not lose out.



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03 Jan 2008 13:05 by Rixxy Star rating in San Pedro. 2011 posts Send private message

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In general Marksfish you are correct. Most people wont be of the age and time where they can get their profit free. Also if you are a resident and plough the profit back into another proeprty within the same tax year, you do not pay capital gains.

Better in general to pay 7% purchase tax than 18% of the profit - although with the market the way it is, not many are paying capital gains!!



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03 Jan 2008 13:39 by pooley-santos Star rating in London UK/Huercal Ov.... 58 posts Send private message

You would be amazed at the number of buyers of new build properties that want to pay quite large amounts in cash and try buying land from a Spanish family if you are not prepared to follow the time honoured tradition of paying a percentage in cash!

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03 Jan 2008 14:21 by Rixxy Star rating in San Pedro. 2011 posts Send private message

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No Im not amazed at all - the Spanish reckon its a divine right and it dates back many years to underdeclare and have black money. Hence many Spanish selling now - or their heirs as the older Spaniards buy property and hang onto it forever - insist on cash regardless.

We do not advocate it and will have nothing to do with it - anymore!! Notaries and Lawyers are too hot on it now anyway.



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08 Jan 2008 19:00 by rowlandsbb Star rating in 2010 50/50 Macclesfi.... 760 posts Send private message

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Post ' Madrid' it is history

The rules have changed

Anyone ' normal' from EU paying 'black money' is just asking for trouble!

But it is still true to say that if you do it right and you have ' UK notes' you can still use it to buy in Spain using the BM route!!



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09 Jan 2008 11:14 by cathbogan Star rating. 16 posts Send private message

Our sale failed last June simply because the seller wanted to underdeclare... Our lawyer said "no", not only is it illegal but you could be in trouble with tax authorities for fraud!! 

When we refused to underdeclare, the seller walked away - by that time we had spent quite a few thousand euros!!!!

From our understanding, the authorities are now clamping down hard when they discover BM so not a good idea in my humble opinion.





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09 Jan 2008 11:30 by rowlandsbb Star rating in 2010 50/50 Macclesfi.... 760 posts Send private message

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Cath

Are you still looking?

2008 may just be a good time to buy!

Whilst prices of the good well located off plan developments are firm there are some good re sales about at sensible prices!

Brian  



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11 Feb 2008 12:34 by semijubilada Star rating in London/Torrevieja. 1052 posts Send private message

Just a thought, if you declare the full amount and you bought via an agent, what about their fees.  Shouldn't they be deducted from the sale price and the amount declared is the amount the builder or vendor receives.

Otherwise this amount of money will be double taxed, the agents IVA and your 7%..

LauryC/Rixxy - Can you elabourate more on the CGT and age, I've read that if you're over 65, resident and owned house for 3 or more years then you could take the money back to UK free of tax.  Is this what you're talking about or is it something else.





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11 Feb 2008 13:45 by morerosado Star rating in Guardamar del Segura.... 6942 posts Send private message

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LauryC/Rixxy - Can you elabourate more on the CGT and age, I've read that if you're over 65, resident and owned house for 3 or more years then you could take the money back to UK free of tax.  Is this what you're talking about or is it something else.

Semi, I think you'll find it was discussed in >>>  If you sell a Spanish property and buy another is there relief on capital gains tax? Maria de Castro advised.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Edited ... hmm, that was for those reinvesting in Spain, wasn't it ?



This message was last edited by morerosado on 2/11/2008.

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11 Feb 2008 16:58 by Rixxy Star rating in San Pedro. 2011 posts Send private message

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If you bought via an agent then their fee is invoiced and even written into the title deeds of the proeprty - that happened to me this morning. So its all legal and the iva is deducted. When you sell your property, your agents fees in full are deducted from any CGT due as is your lawyers fees, andything you did or bought for th property that you are leaving and so never throw receipts away.

I believe that after a certain age your cgt is 0 and you can do what you like.

As an owner/resident your liability reduces with time - Maria would know better than I and if you buy another property where all the profit goes into the new purchase within the same tax year, then your liability is 0

Hope that helps



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12 Feb 2008 15:27 by Smiley Star rating in San Pedro de Alcanta.... 2478 posts Send private message

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Think you have 2 years to invest into the new property in Spain - then again i am no brief!! I think that if you are non resident and you are repatriating the money to the UK (I think, I think, I think) you are still subject to CGT as it is not your principal residence

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