Hello everyone,
We are currently buying a house, and something very strange happened that I’m not sure how to handle.
A bit of background: after a long search and countless viewings, we finally managed to get a house.
The viewing had to be arranged at very short notice, and there was no time for my partner to join. (Luckily, I recorded everything on video.)
My partner never saw the house from the inside but was still convinced by the videos and the location, so we signed the purchase contract.
Now to the situation:
We met the real estate agent (almost) for the first time when signing the purchase contract; before that, there were only a few phone calls where he requested the financing confirmation and informed us about the notary appointment.
All other contact and the viewing were conducted with the neighbor, who is a friend of the owner.
Shortly before the notary appointment, the agent wanted to meet again. He then offered me to pay the €20,000 (about $21,500) commission in cash right after the notary appointment to avoid taxes, which could save us almost €3,000 (about $3,200).
(I have to admit, at the time I thought he meant we could save the 3% VAT, so I said it probably shouldn’t be that much.)
I declined the offer, which obviously didn’t please him...
Later, after talking to someone else, I realized that he was actually suggesting an undeclared cash payment, completely without paying 16% or 19% VAT.
A quick calculation confirmed that we would have paid about €17,000 (about $18,300) in total.
Still, I was glad to refuse because we included the commission in our financing and would have had no proof of payment.
Now here’s the strange part:
We have just received an invoice for the full €20,000 (about $21,500), which states that no VAT is due due to the small business regulation (Kleinunternehmerregelung).
This confuses me a lot. If he doesn’t have to charge VAT, how could he make the previous offer?
The company looks well-established, offers many services, and according to the website has been around for 20 years. (In theory, it could still be possible that he qualifies as a small business under VAT rules.)
I don’t understand any of this.
At the same time, he seems to be a very close friend of the owner, and we don’t want to upset him since we haven’t taken possession of the house yet.
The payment deadline on the invoice is the day after tomorrow.
I would appreciate any advice.
Best regards
We are currently buying a house, and something very strange happened that I’m not sure how to handle.
A bit of background: after a long search and countless viewings, we finally managed to get a house.
The viewing had to be arranged at very short notice, and there was no time for my partner to join. (Luckily, I recorded everything on video.)
My partner never saw the house from the inside but was still convinced by the videos and the location, so we signed the purchase contract.
Now to the situation:
We met the real estate agent (almost) for the first time when signing the purchase contract; before that, there were only a few phone calls where he requested the financing confirmation and informed us about the notary appointment.
All other contact and the viewing were conducted with the neighbor, who is a friend of the owner.
Shortly before the notary appointment, the agent wanted to meet again. He then offered me to pay the €20,000 (about $21,500) commission in cash right after the notary appointment to avoid taxes, which could save us almost €3,000 (about $3,200).
(I have to admit, at the time I thought he meant we could save the 3% VAT, so I said it probably shouldn’t be that much.)
I declined the offer, which obviously didn’t please him...
Later, after talking to someone else, I realized that he was actually suggesting an undeclared cash payment, completely without paying 16% or 19% VAT.
A quick calculation confirmed that we would have paid about €17,000 (about $18,300) in total.
Still, I was glad to refuse because we included the commission in our financing and would have had no proof of payment.
Now here’s the strange part:
We have just received an invoice for the full €20,000 (about $21,500), which states that no VAT is due due to the small business regulation (Kleinunternehmerregelung).
This confuses me a lot. If he doesn’t have to charge VAT, how could he make the previous offer?
The company looks well-established, offers many services, and according to the website has been around for 20 years. (In theory, it could still be possible that he qualifies as a small business under VAT rules.)
I don’t understand any of this.
At the same time, he seems to be a very close friend of the owner, and we don’t want to upset him since we haven’t taken possession of the house yet.
The payment deadline on the invoice is the day after tomorrow.
I would appreciate any advice.
Best regards
Nordlys schrieb:
Why make such a fuss about this? Jealousy? Resentment? He gets 7%. That was clear and undisputed. He is now receiving it — and the rest is none of our business. Well, as a taxpayer, I also try to optimize my personal situation. But I am critical of business models that rely on systematic undeclared work. Especially now, with all the support programs related to the COVID-19 crisis, I really don’t want to support people like that.
schubert799 Jan 2021 13:37Maybe he is currently going through a divorce, facing bankruptcy, or dealing with something else... there are many reasons why he might want to have cash on hand. I wouldn’t do it. Just pay the 20,000 and be done with it!
Wolkensieben9 Jan 2021 16:44Snowy36 schrieb:
Well, someone would first have to figure that out, and who would that be?
And if it’s not in the notarial contract, he can always claim that he ultimately didn’t broker the house in question.Our government can access bank accounts and their transaction flows at any time.
The tax authorities know exactly what a restaurant owner purchases and whether it matches the sales. The tax audit usually takes place precisely after three years.
If they can catch a kebab seller over a few dollars, then a real estate agent is an easy target.
I am certain they have a special department for real estate agents. They can identify every property that was sold and link the agent to the property.
And if they find nothing there, they can scrutinize the buyer. If an amount equivalent to a commission was withdrawn or transferred, they will receive a letter.
In cases involving avoided taxes or cash payments, both parties are guilty of tax fraud.
I would stay calm and simply transfer the commission if I believe the agent earned it.
Wolkensieben9 Jan 2021 16:51Nina343434 schrieb:
We should write in there: broker commission 7% including taxes.
We looked for a template, filled in the property details, and sent it to him.Did you also have to provide your tax ID? He needs it because of the anti-money laundering law.
Wolkensieben schrieb:
Our government can access bank accounts and monitor all the financial transactions at any time.
The tax authorities know exactly what a restaurant owner purchases and whether it matches their sales. Tax audits almost always happen exactly three years later.
If they can catch a doner kebab vendor over just a few euros, then auditing a real estate agent is a walk in the park.
I’m certain they have a specialized department for real estate agents; they can identify every property sold and match the agent responsible for the sale.
And if they don’t find anything there, they can investigate the buyer, and if any amount corresponding to a commission has been withdrawn or transferred, you’ll receive official communication.
In cases involving undeclared taxes or cash payments, both parties are guilty of tax fraud.
I would calmly wait and simply transfer the commission if you believe the agent earned it. Is this just a guess about how things work, or do you know for sure? I’ve always been curious...