Are you confronted with the fiscal trick for furniture or black money request? Be prepared during the price negotiation for a house if the seller proposes so. Most people do understand that black money is mostly only favorable for the seller. But what about a separate price for furniture with a lower transfer tax?
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Fiscal trick furniture
Legally you only buy four walls and a roof in Spain. Even the kitchen or electrical equipment and fittings (air-co, heating, boiler, etc.) aren´t standard included in your purchase. Nevertheless, the average sale includes all furniture and some sellers propose to value the furniture for a separate price. Over this value the buyer then only pays 4% instead of 8% ITP transfer tax (from 28/05/2021 to 31/12/2021 temporally 7% for the total purchase price) during the registration and after-sales works.
Sounds like a good plan, right? But keep in mind that the value of the furniture isn´t part of the purchase price in the Title Deeds (escritura value). This means that if you in the future sell with profit, you´ll need to pay 19% Capital Gain Tax over this amount. This amount namely is considered as profit (after some deductions).
Therefore it´s more an advantage for the seller because on this moment he´ll save on Capital Gain Tax. If the seller insists, then a fair amount of some thousands of Euros for furniture is hard to deny. If the amount is unrealistic high you even run the risk that the Tax Office won´t agree and you´ll get a supplement for the extra 4%.
Furniture and fittings list & check by agent
The real estate agent should make a furniture and fittings list (possibly with added photos), especially if the furniture of worth is sold along. Think about the double design refrigerator that is replaced for a cheap second-hand version. (Own experience…). Would you like the house to be emptied before completion? Because of the costs it´s best to also put this in writing. Of course, it´s wise to include this list in the private purchase contract of the lawyer.
The disadvantage for the buyer of course also exists if the seller wants to pay part of the purchase price with black money under the table. This to save on Capital Gain Tax as much as possible. This is very impractical (first of all there´s a limit of 10.000 Euros in cash per flight), it´s pretty outdated and above all illegal: don´t do so. If the price negotiation breaks over this, you could still offer a higher amount as compensation.
By the way, there also exists another Capital Gain Tax, the Plusvalia. This tax however is charged by the Town Hall. It concerns the increased value of the ground over the years according to official statistics.
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©2021, Ariane van Wijk