Cash? Really?

The EU has been pressurising Spain... to change its laws regarding cash payments from a limit of €2,500... to €1,000

I was recently forced to interact with an estate agency here in Barcelona, something I try and avoid as much as possible, due to my natural aversion to money-grabbing parasites. Is that a bit harsh? Maybe, but I’ve always thought the job to be much better remunerated than it deserves to be, especially for those estate agents who open the door and show you a place that has been left in a shocking state by the previous tenant rather than making an effort to clean it up a bit first.

In this case, I was asked to bring the downpayment on a flat to a small office located in one of the less desirable areas of Barcelona. In cash. As most readers will be aware, downpayments are usually a month’s rent upfront plus two months’ deposit and agency fees. In other words, a decent chunk of money, and not an amount anyone wants to carry around with them in cash. I have rented several flats over my many years in Barcelona, and although I never liked it, being asked for cash in the old days never really made me that suspicious. But to be asked to walk around with a large sum of cash these days raised my suspicions regarding the trustworthiness of the agency I was dealing with.

I’ve lived and rented flats in other countries, and Germany is notable for still being a cash-based society: many places do not accept credit cards. However, it feels like there is a difference in the reasons one might expect German agencies and those operating here to request cash. One derives from an aversion to paying banks the amounts they demand for using credit cards or making transfers, and the other is a tax evasion issue, or even a con, which of course is not uncommon anywhere. That may not be a completely fair cultural assessment, but it’s certainly the impression you get when living in the two countries.

Now I’ve raised your heckles by making such general sweeping assertions about the honesty of certain businesses in my adopted country, let me back it up with some evidence. The EU has been pressurising Spain for some time to change its laws regarding cash payments from a limit of €2,500 (introduced as recently as 2012) to one of €1,000. The draft bill to introduce this change was proposed in 2016 to be introduced in 2017, but never got through, and so the limit remains at €2,500. The reason why the EU is so keen for Spain to introduce such a law and fall into line with other EU countries? Tax evasion. So there you go, my suspicions are in fact based on objective evidence. Not to mention personal experience. Fortunately I’m referring to that of friends rather than my own, as I know of people being asked to bring lump sums to seemingly random places like the steps of the church in plaça Lesseps to make a downpayment on a property. I’m pleased to say my friends did not end up going through with it. But it does beg the question of how many unsuspecting people have been duped like that.

When I quizzed an old friend in England on what he thought about paying in cash and whether it would happen there, he said if any business does ask for large amounts of cash the buyer will negotiate a lower amount for that reason. That said, the idea of paying an agency cash for a downpayment on a rental property sounded highly suspicious to him. I was glad to know it wasn’t just me.

Chatting with other people in Barcelona I’ve been told the reason why agencies do this is because they have to hand the two-month deposit straight to Incasòl, the Catalan Property Institute. Well that may be true, but it doesn’t explain why the rest has to be in cash now, does it?

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