Category: Spanish Taxes

Buying Property in Spain, Houses For Sale In Spain, Lifestyle In Spain, Spanish Taxes

Black Money In Spain. Tip Number 86

The thorny issue of black money in Spain is one you should be aware of when buying Spanish property. Black money is when you buy a house for one price, let’s say 200,000 Euros for argument’s sake, and you declare less on the deeds, for example 180,000 Euros. The reason people do this is very simple, tax avoidance. The buyer would save themselves around 1400 Euros in tax in the above example, 7% of 20000 saved, and the seller might well save a lot on capital gains, eg 18% of any capital gain, let’s say the original purchase was made at 150,000 Euros and then the sale was declared at 200,000 in theory there would be a capital gain of 50,000 Euros minus costs on purchase and sale, round about 15,000 Euros. The saving therefore would be around 3600 Euros