Management of cash payments for real estate transactions in Mallorca

Cash payments in real estate transactions are a sensitive issue that often raises questions, especially as cash is often associated with illegal activities. As real estate agents in Mallorca, it is our duty to challenge these preconceptions and provide clarity. We at Lucas Froese Real Estate help our clients to conduct real estate transactions safely and in compliance with all legal requirements.

What is “black money” in the real estate context?

Cash is often mistakenly equated with black money or illegal activities. However, it is important to understand that cash is not illegal per se. The decisive factor is the origin of the money. If the cash comes from legal sources, it is not considered “black money”. However, real estate agents bear a high level of responsibility.

Legal requirements for cash transactions

Cash transactions in real estate transactions are permitted, but are subject to strict legal requirements. Here are some important limits for cash payments in the real estate sector in Mallorca:

Up to 9,999 euros for transactions with private individuals who are not resident in Spain for tax purposes.
Up to 999 euros if a company is involved.
Up to 99,999 euros for transactions between private individuals.

These regulations are based on Spanish money laundering laws, which aim to prevent illegal activities and create transparency in larger transactions.

Responsibility for cash payments

It is important that real estate transactions are legal and transparent. This includes

Customer identification: We carefully check who our customers are in order to minimize potential risks.
Documentation: All transactions are fully documented in order to be able to prove the legal nature of the transaction to the authorities in case of doubt.

Necessary precautions and restrictions

This includes the establishment of an internal prevention system against money laundering, regular training and external audits.

Although cash payments are permitted, there are hurdles that can make a smooth transaction more difficult:

Notarial requirements: Notaries often require proof of the origin of the cash before they process a transaction.
Banks: Many banks are reluctant to handle large amounts of cash as they follow strict internal regulations to prevent money laundering.

Conclusion: Safe handling of cash payments in Mallorca

At Lucas Froese Real Estate, we ensure that all real estate transactions involving cash payments are legally secure and transparent. In this way, we ensure that you as a buyer or seller are on the safe side.

We recommend that you regularly inform yourself about the current legal requirements and rely on the expertise of an experienced estate agent in all matters relating to the purchase of real estate.