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
Nina343434 schrieb:
But why did he offer to do the cash payment without taxes if there are no taxes anyway?Because the gentleman still has to pay several thousand euros in income tax. 42% if he is employed elsewhere as well. In private, only €9,860 (around $10,500) ends up in his pocket instead of €17,000 (around $18,200) in undeclared cash. That makes quite a difference.Nina343434 schrieb:
It probably isn’t worth trying anything and just paying.Give up and pay €20,000 (around $21,400) just like that? I would never do that with agents who do nothing but collect money anyway. Due to the missing cancellation instruction, I would revoke the contract. Just strange why you even signed the contract… no idea how that should be interpreted.
As I said, take your time to review all options and ignore the 2-day payment deadline! First ask for his real estate agent license according to Section 34c of the Trade Regulation Act. Also verify his tax number.
Nina343434 schrieb:
We are just very confused about the tax and do not understand it at all.Well, you wouldn’t have noticed that no sales tax applies to you anyway. But he would have saved a huge amount on his own taxes.When we bought a house, there was nothing about the real estate agent in the notarized contract... after all, the seller had hired them, so as the buyer, you don’t even receive the commission agreement.
What this person is doing is really outrageous and unfortunately it also damages the reputation of honest professionals in this business.
What this person is doing is really outrageous and unfortunately it also damages the reputation of honest professionals in this business.
SumsumBiene7 Jan 2021 21:49You found a form and showed it to him? I would have found that very strange. And if you have 7% including VAT listed, he should also be able to show this separately. I’m keeping my fingers crossed that everything is at least okay with the house. To me, all this sounds very suspicious.
I have the following assumption:
The official presence is through a corporate structure (probably a limited liability company). Please check the imprint on the website.
In addition, he often tries to handle certain transactions entirely off the books. This saves him VAT and income tax or corporate tax.
For one case per year (previously up to 17,500 euros, now 22,000 euros), he processes it as a natural person. This at least saves him VAT of 3,000 euros. And this is completely legal; that’s why he provided you with an official invoice referring to section 19 of the German VAT Act.
The official presence is through a corporate structure (probably a limited liability company). Please check the imprint on the website.
In addition, he often tries to handle certain transactions entirely off the books. This saves him VAT and income tax or corporate tax.
For one case per year (previously up to 17,500 euros, now 22,000 euros), he processes it as a natural person. This at least saves him VAT of 3,000 euros. And this is completely legal; that’s why he provided you with an official invoice referring to section 19 of the German VAT Act.