Underdeclaring on the Escritura.

M

mazoka

Guest
Can anyone offer advise on Underdeclaring on an apartment in Tenerife,the asking price by the vendor is £163.000.but he is asking me to declare on the Escritura £80.000.I know I will save on the 6.5 percent on the purchase tax,but I am more concerned about any Legal problems that could occur with the Tax people,It is my first overseas property I am about to buy and would be grateful for any advice on the matter.

Kind Regards

Mazoka
 
Thanks for the advise on the capital gains aspect of the situation.
Regards
Mazoka.
 
This is called 'black money' in Spain and the Spanish Government are actively trying to stamp it out at present. As ringledman says, when you sell, you'll be liable for a lot more capital gains tax, unless you can find someone who will do the same for you. This is illegal BTW so I wouldn't recommend it. Also by the time you sell, it's more than likely that the practice will have died out.
 
Not familiar with Spanish tax laws but it sounds to me like such an underdeclaration would be fraud and tax evasion. Ask your Spanish solicitor about it.

Post crossed with lightweight's.
 
ClubMan said:
Not familiar with Spanish tax laws but it sounds to me like such an underdeclaration would be fraud and tax evasion. Ask your Spanish solicitor about it.

Post crossed with lightweight's.
Click to expand...

The problem they're having is that a lot of Spanish solicitors covertly condone this 'black money', i.e. don't tell me about it, nudge nudge, wink wink!
 
Is it really worth the saving doing something which:

a) is illegal and in a worse case scenario may result in prison or more likely a fine:
b) ends up with you paying more CGT in any case: or
c) may cost you an awful lot more in solicitor/tax fees to sort out a mess that most solicitors or advisors would steer away from.
 
I really value eveyones advise on the matter,I feel I will not be proceeding any further on the possible purchase, the motive was not to evade any tax,we had fallen in love with the apartment,we have said to the vendor that we would prefer to declare the proper price,his responce was then there will be no sale.
Regards
Mazoka.
 
Plenty more fish in the sea! If he does not want your money, there are lots of sellers who will be happy to play an honest game.

The incentive for dishonesty is now much less with the lower CGT since January in any case, so the practice of paying black money is dying out in Spain
 
Well the Spanish market has slowed and some properties have been left sitting for a year or more. More fool them I say.

Auto did the CGT drop for the Spanish? I was aware it had dropped for foreigners selling a property.
 
but are still liable for irish ctg. looks like to me that seller is trying to avoid his share of ctg.
 
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