ᐅ Is it common to buy land and pay part of the price in cash?
Created on: 14 Feb 2018 12:53
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Vanyleon87
Hello,
I’m not sure if this is the right place, but we need some help. Here’s the situation: we found a piece of land privately where we want to build. However, the owner wants to do it so that only part of the amount is stated in the official purchase contract, and we would pay the rest in cash. (She mentioned maybe in an envelope in the notary’s waiting room, so she doesn’t have to pay tax on the full amount.)
We are very uncertain and find it strange that she wants to handle it this way. What do you think about that? We’re not sure if this could be considered tax evasion, which of course is completely unacceptable!
Thank you very much for your help.
I’m not sure if this is the right place, but we need some help. Here’s the situation: we found a piece of land privately where we want to build. However, the owner wants to do it so that only part of the amount is stated in the official purchase contract, and we would pay the rest in cash. (She mentioned maybe in an envelope in the notary’s waiting room, so she doesn’t have to pay tax on the full amount.)
We are very uncertain and find it strange that she wants to handle it this way. What do you think about that? We’re not sure if this could be considered tax evasion, which of course is completely unacceptable!
Thank you very much for your help.
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Vanyleon8714 Feb 2018 13:31Yes, the sale would be private. Well, I believe the lady is aware since she buys, renovates, and resells houses and land professionally.
Additionally, during the last phone conversation, after we said we were financing everything together—the land and house construction—she mentioned that she would prefer to receive a certain amount in cash so she can save on taxes and not have to pay tax on the entire purchase price. So, I assume she knows that taxes must be paid in such cases.
Additionally, during the last phone conversation, after we said we were financing everything together—the land and house construction—she mentioned that she would prefer to receive a certain amount in cash so she can save on taxes and not have to pay tax on the entire purchase price. So, I assume she knows that taxes must be paid in such cases.
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toxicmolotof14 Feb 2018 13:36In this scenario, the buyer also "saves" on notary fees and property transfer tax. So, it’s not just assistance, but potentially their own tax evasion as well.
When you read something like this, it really calls for reporting it to the authorities. These people are only looking out for their own benefit and are harming everyone else.
Although plenty of money is still wasted afterwards, one does not justify the other.
When you read something like this, it really calls for reporting it to the authorities. These people are only looking out for their own benefit and are harming everyone else.
Although plenty of money is still wasted afterwards, one does not justify the other.
Have you spoken with the owner to see if there might be another option? Perhaps a payment plan could be arranged, or another solution found to legally reduce the tax obligations.
Such "suggestions" are not uncommon, but I would definitely not agree to them. The advantage clearly lies with the seller. You might save some property transfer tax (evade).
Such "suggestions" are not uncommon, but I would definitely not agree to them. The advantage clearly lies with the seller. You might save some property transfer tax (evade).
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Vanyleon8714 Feb 2018 14:41We have already tried to talk to her, explaining that we would like to keep everything within the legal framework, but she insists on doing it the way she suggested, including part of the payment in cash. Well, as I said, we will leave it at that and continue to look for other options. Thank you for your many fast responses.
Vanyleon87 schrieb:
Yes, the sale would be private. Well, I do think the lady knows what she’s doing since she professionally buys, renovates, and resells houses and land.
Also, during the last phone call, after we said we would finance everything together—the land and the house construction—she then mentioned that she would like to receive a certain amount in cash to save on taxes and not have to pay tax on the full purchase price. So I assume she understands that taxes must be paid in such cases.This is no longer a private matter for her, as she appears to be officially dealing in real estate.
A nice extra income if you have liquidity and one or two contractors on top.
Tell her: either 100% or nothing at all. Maybe she will agree, but most likely you will need to keep looking for something suitable.
What you do with the information that there is a lady who is not entirely straightforward is up to you. You don’t have to act on it, but you can.
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Vanyleon8714 Feb 2018 15:19Yes, that's true. I think it will end up being something different in the end. Now she’s starting to put pressure on us, which we think is, to put it politely, really bad. Last Friday, she promised that we would get the plot of land, and now we are supposed to schedule an appointment with the notary by this Friday. That’s another point that made us suspicious. Yes, I think a tip to the right person wouldn’t hurt because what she is doing is really unacceptable, in my opinion. We were ready to pay in full, covering everything that comes with it, and so on.