Spain is absolutely no exception and has a tangled web of laws and legislation seemingly designed to trip up an unwary real estate buyer. This article examines three key areas that a potential property purchaser should be at least aware of before signing on dotted line for that dream Spanish home.

Firstly there’s a ‘tradition’ in Spain for purchasers to actively but illegally assist vendor in reducing his overall capital gains (or profit) tax liability. Often vendor will ask for a far reduced purchase price to be written into purchase contract and for buyer to actually make up difference between contract price and actual price in cash.

This has been a tradition in Spain for many years; in theory it doesn’t affect buyer, it certainly doesn’t affect vendor and what tax authorities don’t know can’t hurt them, right?

Wrong!

This action is highly illegal and Spain’s new socialist government have begun cracking down on money laundering and tax evasion and these concerted efforts are targeting property market in Spain.

Of course many potential buyers reading this will simply assume that if asked to act illegally all they need do is point out that new crackdown could result in investigation, fines, even a lengthy prison term and vendor, estate agent and solicitor involved in transaction will step back and accept that exact figures are entered into contract and taxation be paid accordingly.

Unfortunately reality for those who refuse to act in accordance with vendor’s wishes can be far different to above proposed ideal scenario. Quite often vendor backs out of a sale if he cannot get his way and buyer loses their dream property in Spain and possibly their deposit as well.

So, what should someone hoping to buy property in Spain do if faced with such a situation? Should they accept vendor’s demands and hand over a brown paper bag stuffed with 500 Euro notes? If they do then price they apparently purchase property for will be price against which any future profits from resale of property will be compared for their capital gains tax purposes. Therefore if purchaser ever wants to resell property they too will need to insist that their buyer also agrees to having a reduced sum entered into contract otherwise they’ll be liable for all extra capital gains taxation! Someone somewhere along line is going to lose out just ensure that it’s not you! Even if you have your heart set on a particular home in Spain I would strongly recommend that you do not go ahead and act illegally even if that means you risk losing property.

Think very long and very hard about what you’re being asked to do and potential legal and long term financial consequences rather than your short term thrill at securing that dream home in Spain.

When phone is jangling, pace hectic and deadlines looming, do you stop … to eat?

All self-employed people share title Chief-Cook-and-Bottle-Washer. Which is just another way to say that it is easy to get stretched thin when you are responsible for everything.

In a perfect world, our work would keep us stimulated, pay bills, and provide us with a sufficient income to allow a decent quality of life. We would have neither too much nor too little work and it would come in an even flow. Not only that, but our clients would be pleasant and they would pay us on time.

We, in turn, would find it easy to perform our services to public with excellence because we would be able to stay in touch with joy that made us choose our line of work in first place.

But reality is that most of us are lucky if we can get within spitting distance of our perfect world, much less live in it.