Is it alright to pay for Spanish property transactions or work in cash?
Here’s what you need to know about avoiding the pitfalls of black money in property transactions in Spain
In property transactions in Spain, the temptation to use black money, or unreported income, may arise as it promises benefits for both the buyer and the seller. However, the consequences of this practice can be severe, and it’s essential to understand the risks involved.
While using black money may seem advantageous initially, it can result in higher taxes and legal complications when it comes to selling the property. The tax on capital gains can often outweigh the initial savings on purchase tax. Additionally, you may face challenges in using black money to fund future property purchases or transferring it across borders.
It is crucial to consider the long-term implications of using black money and avoid engaging in this practice unless you have already undeclared income, which is relatively rare for most foreign buyers.
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