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
Snowy36 schrieb:
When we bought a house, there was nothing about the real estate agent in the notarized contract... the agent was hired by the seller, so as the buyer, you don’t even see the commission agreement.
What they are doing is extremely bold and unfortunately also damages the reputation of the honest parties working in this business.Maybe it also depends on regional practices? Usually, the buyer selects the notary. The agent checks this in advance and provides the notary with all necessary documents while securing their own interests. For example, in our last contract it states:“The contract comes into effect through the proof or mediation by (...) The contracting parties agree on this. The notary is authorized (...) to issue a simple copy of this contract.”
HilfeHilfe schrieb:
Who says that? Here in the region, no one has gone bankrupt. They are all extremely happy. In November, December, and January, they receive 75% of the previous year’s revenue and have cut fixed costs (no staff, no energy, no material usage). I don’t need to calculate much to see that it works out.
If anyone files for bankruptcy, it’s only because they didn’t fill out the applications correctly. That doesn’t add up at all for the whole year—how could it? Except for those two months, there were only pennies. We know highly successful restaurateurs who aged several years in 2020 out of worry.
You definitely have to look at each case individually. This summer and until the end of October, the restaurants and beer gardens were packed to capacity. Everyone who wanted to and could supported the hospitality sector accordingly, and in general, people have been dining out more often than before the pandemic. When I looked at the advance VAT returns of the hospitality businesses, there was no noticeable decline in sales during this period.
If you purely go by the financial statements and profit calculations, 9 out of 10 restaurateurs are always on the brink of bankruptcy anyway 😉
If you purely go by the financial statements and profit calculations, 9 out of 10 restaurateurs are always on the brink of bankruptcy anyway 😉
Who actually conducts a tax audit or something like that on a real estate agent? Does anyone really check that? Is there someone who sits down and looks at how many listings they have online, what cars they drive, and whether it all seems plausible?
I doubt anyone notices whether it’s 10 houses sold or 15...
I doubt anyone notices whether it’s 10 houses sold or 15...
Tolentino schrieb:
Maybe it’s also because (at least in many Berlin bars) every second cash payment isn’t entered into the register... It’s not just maybe that way 😉. A representative for cash register systems once told my mother, “There is no cash register system that can’t be manipulated in some hidden way, because otherwise it simply wouldn’t sell.” But that was a few years ago already.
Snowy36 schrieb:
Who actually conducts a tax audit or something with real estate agents? Does anyone really check that? Is there someone sitting there reviewing how many listings they have online, what cars they drive, and whether that’s plausible? Tax audits are conducted when, in the context of the income tax return, the responsible officer refers the case to the tax audit department. Within this process, such matters would also be examined. But how can certain things be checked if there are no documents to support them? It is simply not possible to make assumptions against the taxpayer without evidence. Just because a few properties appear on their website doesn’t automatically mean they successfully brokered them.
The small business regulation (Kleinunternehmerregelung) is reviewed annually during the tax return or income surplus calculation. If the revenue exceeds the threshold, the person is obliged to pay VAT in the following year, even if their turnover falls back below the limit.
This can be found in §19 of the German VAT Act (UStG).