Spain introduces ban on major cash purchases

Spain introduces ban on major cash purchases

One of the measures to resolve the economic crisis in Spain is tightening control over the tax payments. As noted by the Deputy Prime Minister of Spain Thoraja Saenz de Santamaria: "We adopted a plan on combating tax evasion, which, inter alia, provides for greater customs control of border cash flows. These earnings will be spent on struggle with budget deficits", reports Radio Liberty. Under this program Spanish government adopted stringent measures and prohibited large cash purchases. Now it is available only through the bank transfers monitored by the tax agency. Due to such cash control analysts predict 8 billion Euro of income for the treasury this year.

Construction and housing selling will be especially controlled as real estate market is characterized by the maximum cash traffic, which is very difficult to control. Real estate experts note that this measure will affect, in particular, Russians, who prefer to pay is cash excluding Russian and Spanish banks. Sellers do not declare the money and avoid taxpaying, which deteriorates the economy.

It is worth noting that last year Russians were the main clients of Spanish property market being well ahead of the British and Belgians, who were the leaders in the previous year. According to the Head of the Realtors Association Hesualdo Rosa, the majority of homes sold in the Alicante province and Burgos provinces during August 2011 were bought by the Russians. Such demand for housing in Spain is explained by the relatively low prices, as well as special stock offerings or real estate purchasing support program.

Ilya Kozlovskiy

Date: 29/01/2012