Penalties foreseen for paying cash for realty
Buyers who refuse to conduct bank transactions when acquiring property face fines, risk contract
As of January 1, 2024, any property buyer insisting on paying for a realty asset in cash will face a fine of up to 500,000 euros and the cancellation of the contract.
In general the tax bill submitted to the Parliament late on Tuesday foresees the tightening of fines with the aim of limiting tax evasion. According to the draft law, a real estate purchase and sale contract that records an advance payment, partial or full payment in cash is void and prohibited from being transferred. Violators will be fined 10% of the price paid in cash. The fine is at least €10,000 and up to €500,000, for each violation.
For example, in the case of buying and selling a property worth €100,000 the contract will be canceled and the taxpayers concerned will face a fine of €10,000, which is 10% of the cash price (and minimum fine). Even if the purchase price is €50,000, the fine will be €10,000.
It is noted that in a total of 338,511 real estate transfer declarations with a total value of €27.7 billion over the last five years, the price was paid exclusively in cash in 42,613 declarations, for a total amount of €462.49 million, and in 41,741 declarations the price was partially paid in cash, totaling €2.98 billion.
According to officials at the Ministry of National Economy and Finance, the new measure aims to limit cases of money laundering in the purchase and sale of real estate, as the current law has no practical effect on transactions made with “hidden” cash under the table.
At the same time, fines up to €20,000 will be imposed for non-transmission of data (receipts and sale documents) on the platform of the Independent Authority for Public Revenue (AADE), a fine of at least €5,000 for those who have not been registered in the Short-Term Property Register, as well as a fine for sales of more than €500 in cash.
Fines for e-book violations will be calculated according to the net value of the non-transmitted data, on the basis of the provisions of the draft law.
