Can you please advise me on the above. I hope to buy a house in Spain and have not yet signed a contract. The builders want cash payments at separate stages. Why can we not pay by cheque? We have also been told that we can have our property taken off us for no reason. Is that true.

Thanks for your query.

In Spain some building companies charge payments in cash as a tax evasion ploy. If they receive cash they can avoid declaring it so that it becomes "black money" which they do not reveal to the Spanish Inland Revenue (Hacienda). They then use the black money to pay expenses such as wages to immigrant builders without work permits, materials etc. thereby reducing their declared costs. If you pay by cheque, the building company has to pay the cheque into its bank account, which means the money becomes visible, and must be declared to the Inland Revenue and be subject to the legal taxes.

If you make cash payments for your property, it is very very important that before handing over any cash at all you sign a formal, and legal, private purchase/sale contract (checked by an expert) which clearly specifies the following basic elements of the purchase and the sale agreement:

• Identification of the seller as the legal owner of the property you are going to buy
• Exact description of the property which is going to be built - squared meters, closed price, materials to be used in the construction
• Form of payment (this is especially important in your case, because if you agree to hand over certain sums of money at certain stages of the building process, the builders will be legally bound to keep to the dates of completion)

You should really get an expert to check the contract before you sign it, to make sure that your rights (and money) is protected. If you tell us where your property is, we may be able to recommend someone to you.

As far as your last query is concerned, who has told you that property can just be taken off you? The builders? Certainly if you do not sign a contract and hand over cash payments, then you do run the risk of losing the property and your money, because no legal document verifies the sale or the payments. Also there have been some stories in the news lately about foreign owners in the Costa Blanca losing part of their property because of local land laws - are you referring to that maybe?.

If you are considering buying or selling property in Spain and have a question, write to us and we will try to help. We may also publish your question here to help other potential property buyers in Spain.