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Scams threaten to ruin Spanish dreams - 26 June 2007

Property owners in Spain are being warned to guard against a new wave of scams that are apparently becoming more common as some buyers look to exit the Spanish market quickly.

The scams, often involving the exchange of currency and payments in cash, also rely on the common but illegal practise of under-declaring the value of a property in order to minimise the capital gains tax burden on the seller.

Writing in the Sunday Times, Mark Stucklin of Spanish Property Insight details how a new breed of con men are travelling the Costas and trawling online property agents to find owners who are keen to sell amid rumours of a price crash (or a soft landing for the market, depending on who you believe). They contact the seller direct, often offering to buy the property sight-unseen, in cash, with just the minor problem of currency exchange to be overcome. They ask if they can pay the deposit in cash, usually in Swiss Francs, and when the seller goes to exchange this sum, they ask to have an advance on another, larger sum in the same currency. The seller would then discover, upon trying to exchange the cash, that some or all is in counterfeit notes.

The other version of this scam involves the buyer paying the difference between the declared and ‘real’ prices of the property in cash, which then turns out to be counterfeit. The victim is, of course, unable to go to the authorities unless they are prepared to risk prosecution for fraud and tax evasion. This prospect, combined with the relative chances of any of the money ever being recovered, keeps most victims quiet.

Of course, if anyone offers to pay you in undeclared cash for any part of your property, you should walk away immediately. After all, how would you know a genuine €500 note from a fake? In Spain, the €500 denomination was known as a ‘bin Laden’ – everyone knew they were out there, but no-one had ever seen them…

 

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