Implications of paying partly in cash: Fromr a buyers perspective.

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NerdyNed

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Hello All,
Mabye someone here could enlighten me on the following.....

I'm negotiating a price on a house at the minute. The seller has agreed to sell at a certain price as long as a certain amount of it is in cash.

The cash amount is fairly small at less than 5% of the price.

I'm wondering, are there any implications or pitfalls that I should be aware of related to paying partly in cash?

Hope you can help.

Regards,
Ed
 
But all the money you pay will be cash? It all ends up in the sellers bank account.

Do you mean that some of the price the seller wants will be undisclosed / not on contract/ under the table etc.,etc?

If it is not above aboard then when/if it all goes belly up and problems arise, you will have no proof of a cash payment.

Play it straight and save yourself the grief


mf
 
You are facilitating tax evasion if you are not including it in the contract.

the seller could be paying less CGT on the sale.
You could be paying less stamp duty.

tax evasion is a criminal offence.

Brendan
 
Lads, why are ye jumping on the fella. He's not the one wanting to give cash, he asked the implications and you've told him that. But Christ, to already pronounce him as a criminal before anything has happened, calm down like!
 
if I'm understanding this correctly, if the selling price is €300k, the vendor is prepared to sell to you for €285k + €15k in cash (under the counter).

Implications are
facilitating tax evasion
potential money laundering issues
issues regarding insuring the house for it's true value, since you will only have signed a contract for 95% of the price

Personally, I'd tell him no
 
Mpsox said:
issues regarding insuring the house for it's true value, since you will only have signed a contract for 95% of the price
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This is hardly relevant. A property must be insured for its rebuild cost, not its acquisition cost or current market value.
 
Most of you are assuming some for of tax evasion.
what if the case is that the seller has a mortgage for 350k selling for 300k but does not want the bank to get all the 300k and him left with nothing. He may need 15k to clear short term debts or to live on for a number of months.
If I was the buyer I would ask the reasons behind asking for the cash payment and if they can not give a clear answer I wouldn't do it. His solicitor should be able to advice you.
 
niceoneted said:
Most of you are assuming some for of tax evasion.
what if the case is that the seller has a mortgage for 350k selling for 300k but does not want the bank to get all the 300k and him left with nothing. He may need 15k to clear short term debts or to live on for a number of months.
If I was the buyer I would ask the reasons behind asking for the cash payment and if they can not give a clear answer I wouldn't do it. His solicitor should be able to advice you.
Click to expand...

That scenario is still not legal.

The OP has specifically asked about potential pitfalls and implications of him facilitating an illegal transaction so I dont understand why anyone is complaining that the question has been answered.
 
niceoneted said:
Most of you are assuming some for of tax evasion.
what if the case is that the seller has a mortgage for 350k selling for 300k but does not want the bank to get all the 300k and him left with nothing. He may need 15k to clear short term debts or to live on for a number of months.
If I was the buyer I would ask the reasons behind asking for the cash payment and if they can not give a clear answer I wouldn't do it. His solicitor should be able to advice you.
Click to expand...

Thats a really tricky area. Any non above board deal that the Vendor does with the Bank that amounts to a fraud may have potential implications for the purchaser, their solicitor ( as in "can we draw up a side agreement"), Vendor's solicitor ( don't tell the bank) . It also means reeling in accomplices/ people closing their eyes etc.,etc. It basically comes down to "tangled web".

And for the professionals involved ( I'm just giving a fella a dig out) , I'm reminded of some very good advice..........

No good deed ever goes unpunished.


mf
 
Thanks for the input everyone.
I'm only a regular Joe soap first time buyer who is looking to set up a home for the family. I'm not familiar with all the ins and outs of CGT etc.

I’m no criminal and I didn’t know if this was legal or not, which is why I asked the question here. So thanks for the benefit of the doubt.

Complainer said:
You'll be keeping great company with this approach;
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Thanks :rolleyes:
Mpsox said:
potential money laundering issues
Click to expand...
Thanks, I hadn’t considered this at all, definitely something I don't want to get mixed up in, even inadvertently.
mf1 said:
Thats a really tricky area. ...
Click to expand...
Your right, it all sounds too dodgy, risky and messy.

Back to the negotiation table.

Regards,
Ed
 
Just stick with the "I want everything above board" approach and you cannot go wrong.

mf
 
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