# Methods of paying rent to Spanish Landlords



## Allie-P (Feb 11, 2013)

Hello All 

Just a query for you lovely people - especially, those of you with experience of long term renting in Spain.

We moved to our rented house last November & it was agreed that we paid the rental charges, via our Spanish bank account, on the 1st of every month.

This we have done. The landlord has now come back to us, via the Agents. He wants the rental money paid directly to him every month, as cash.

Apparently, I put the word RENT & our names on the reference, when setting up the bank transfer.

The tax man is after him & he doesn't want to pay !!


This will be very inconvenient for us - but I suppose we have no choice but to comply.

Is this the norm here ? Your experiences, please.

We have only had one other previous Landlord - he was happy for us to pay through the bank.


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## DunWorkin (Sep 2, 2010)

A lot of things in Spain are paid in cash but I would never pay something like my rent in cash. If there is a dispute you have no proof of payment.

You should not be inconvenienced just because your landlord does not want to pay tax.

My advice would be to find somewhere else with a more law abiding landlord.


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## xabiaxica (Jun 23, 2009)

DunWorkin said:


> A lot of things in Spain are paid in cash but I would never pay something like my rent in cash. If there is a dispute you have no proof of payment.
> 
> You should not be inconvenienced just because your landlord does not want to pay tax.
> 
> *My advice would be to find somewhere else with a more law abiding landlord*.


me too

my new landlord asked if I would be claiming tax relief on the rent - if I hadn't been then I'm guessing they would have hidden the income somewhere

I pay by bank transfer every month

I would have no problem paying cash though - as long as I got a proper receipt - my gestor would then get them


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## snikpoh (Nov 19, 2007)

... of course you have a choice. 

Simply carry on paying like you are with "rent" in the title of the payment - there is absolutely nothing they can do about it provided you have a legal contract of course (6 or 12 months, doesn't say temporary, in Spanish etc. etc.)

If they want to defraud the government then that's their business!


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## castaway06 (Jul 25, 2014)

If you are officially paying rent, and have a gross income below 24,000 euros then when you do your tax return (Renta) the government will give you up to 10% of your paid rent back as a tax refund in June. Which is a nice present to have each year. 

Of course to do this you have to put your landlords tax ID (CIF/NIF) onto the tax return, which can cause them some problems if they are being a naughty boy and not declaring it. The Tax authorities are stamping down very hard at the moment on un-declared rental income. 

So the choice is yours go official or pay cash and let your landlord effectively steal 700 or so euros a year from you by not letting you claim your tax refund.


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## larryzx (Jul 2, 2014)

castaway06 said:


> So the choice is yours go official or pay cash and let your landlord effectively steal 700 or so euros a year from you by not letting you claim your tax refund.


Or looked at another way if you force your landlord to be legal then he/she may well increase your rent in order to be able to afford to pay the charges he/she will incur, or evicting you and leaving it empty.

My son has an apartment which he would like to sell, but has decided, as he does not need the money, to wait until the market improves. In the meanwhile as he cannot be bothered to let legally, with all the hoops to jump through, and leaving him with so little that it is not worth it, he has allowed a friend, who is on a very low income, to use the apartment without any charge.

There are probably a lot of properties standing empty as it is not worth letting them legally, thus depriving those in need of a home.


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## castaway06 (Jul 25, 2014)

Yes there are a lot of empty properties, and your right, but that is something for another thread.

Alli-P if the tax man is after him its already too late for him, no changing of payment mechanism is going to save him. If you do change to cash now expect to get a nice letter from the Hacienda (tax man) asking you to come to a formal interview where you will be asked questions about what you paid, how and to whom. Then its up to you about what you tell them, but they will make you sign a written statement (in Spanish) at the end of the interview.

I know this because I had one of these interviews a couple of months ago where they asked about my ex-landlord who it turns out was being a little less than honest


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## mrypg9 (Apr 26, 2008)

larryzx said:


> Or looked at another way if you force your landlord to be legal then he/she may well increase your rent in order to be able to afford to pay the charges he/she will incur, or evicting you and leaving it empty.
> 
> My son has an apartment which he would like to sell, but has decided, as he does not need the money, to wait until the market improves. In the meanwhile as he cannot be bothered to let legally, with all the hoops to jump through, and leaving him with so little that it is not worth it, he has allowed a friend, who is on a very low income, to use the apartment without any charge.
> 
> There are probably a lot of properties standing empty as it is not worth letting them legally, thus depriving those in need of a home.


The landlord should at the outset have set a rent which covered all tax and other charges so s/he was completely legal.
I doubt the landlord could evict Allie on the grounds given.

We do not know anything about this landlord's financial status. For all we know he could be wealthy and just doesn't want to fulfil his social obligations by paying taxes.
Are you suggesting that in order to alleviate the homelessness situation no landlord should be obliged to pay tax? What 'hoops' are there to jump through apart from perfectly reasonable ones like ensuring your property is safe, that you draw up a legal contract and that you pay your taxes?

I've been a landlord in the UK and abroad and am now a tenant. No way would I be a landlord in Spain unless I knew the prospective tenant very well indeed....it's not the 'hoops' that would put me off but the many stories of tenants from hell.

Allie is not one of those, though.


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## larryzx (Jul 2, 2014)

mrypg9 said:


> The landlord should at the outset have set a rent which covered all tax and other charges so s/he was completely legal.
> .
> What 'hoops' are there to jump through apart from perfectly reasonable ones like ensuring your property is safe, that you draw up a legal contract and that you pay your taxes?


It seems apparent that you do not 'know about the hoops.' (Not that you are alone, most landlords don't, which is probably why most rentals are not 100% legal). 

It's a complex matter, which I am sure has been covered ad nauseum in other threads. Rather than go off thread here, I will leave it at: My son (we, knowing the hoops) knew that asking a rent which would compensate for the problems of doing it legally, would take the property out of the letting market: That is why he has allowed the friend to stay there free.


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## mrypg9 (Apr 26, 2008)

larryzx said:


> It seems apparent that you do not 'know about the hoops.' It's a complex matter, which I am sure has been covered at length in other threads, so. rather than go off thread here, I will leave it at: My son (we, knowing the hoops) knew that asking a rent which would compensate for the problems, would take the property out of the letting market: That is why he allowed the friend to stay there free.


No, I know nothing of the 'hoops' in Spain other than what I know second-hand from friends who rent out property legally with taxes and other legitimate expenses included.

Apart from tax, Energy Proficiency Certificate, safety of appliances etc. I'm interested as to what else a landlord in Spain is required to do to be 100% legal. It can't be that onerous as very many people both Spanish and immigrant manage to rent out their properties legally. So I'd be interested to know.

I can't find that kind of information you mention on this Forum so maybe Snikpoh who is a landlord of many properties could tell me?


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## larryzx (Jul 2, 2014)

_I can't find that kind of information you mention on this Forum so maybe Snikpoh who is a landlord of many properties could tell me?_

Yes good idea, I will follow your lead and leave it to Snikpoh.


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## mrypg9 (Apr 26, 2008)

snikpoh said:


> ... of course you have a choice.
> 
> Simply carry on paying like you are with "rent" in the title of the payment - there is absolutely nothing they can do about it provided you have a legal contract of course (6 or 12 months, doesn't say temporary, in Spanish etc. etc.)
> 
> If they want to defraud the government then that's their business!


As I know you are a (honest) landlord, what are these 'hoops' that landlords have to go through to be completely legal here?
What else is there apart from paying due tax and other such charges, having the Energy Certificate, obeying the current rental laws and generally behaving in a responsible fair way to your tenant?
I'm referring to long term rentals not holiday lets.

Thinking about profit levels from rents....as it's market value and not the debt on any mortgage you may have that will determine how much rent you can charge, it's so important to think carefully before going into any house purchase that requires rental income to pay off a mortgage. Then there's the landlord's duty of maintaining the property n good order etc..

I rented out a property in Canada and did reasonably well out of it for a couple of years but then a new tenant came in and wanted new carpeting and a repainting throughout the property. This would have wiped out several month's rental profit even taking tax deductible into account so fortunately the tenant and I came to an agreement that she would purchase the property.


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## snikpoh (Nov 19, 2007)

It's certainly all the things you mention. In some areas, you are also required to be licensed (ISTR).


In hind sight, I would certainly not buy-to-let in Spain. We made this (bad) decision a number of years ago when the rents were 'fair'. Now the rents we can get are pityful and don't even cover the expenses. It is all driven by the market and not by the type/size of property. In this area, more and more people are moving back home as they can't afford to live elsewhere. We have large, two-bed apartments which we are trying to rent at 200€ per month!!!!


The problems that we have are that many tenants can't/won't pay. For example, one of our tenants in on 'paro' awaiting his pension later this year. You might think that this is a safe bet, BUT ..... 4 months ago the authorities accused him of working whilst claiming unemployment. He has been able to disprove this allegation but in the mean time (some 5 months now) he has not received a cent and so, nor have we. The bills remain unpaid as does the rent. 

Being an optimist (some of the time ), we expect him to be paid soon and so hope that he will pay us!


Finally, when you factor in that tenants (in this area) don't stay long, we seem to be forever redecorating or carrying out minor repairs. This is not just us but seems a common trait in this area.


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## mrypg9 (Apr 26, 2008)

snikpoh said:


> It's certainly all the things you mention. In some areas, you are also required to be licensed (ISTR).
> 
> 
> In hind sight, I would certainly not buy-to-let in Spain. We made this (bad) decision a number of years ago when the rents were 'fair'. Now the rents we can get are pityful and don't even cover the expenses. It is all driven by the market and not by the type/size of property. In this area, more and more people are moving back home as they can't afford to live elsewhere. We have large, two-bed apartments which we are trying to rent at 200€ per month!!!!
> ...


So apart from the requirement in some areas to be licensed a landlord's obligations are as I expected. No doubt getting a licence also depends on being able to fulfil theusual requirements and obligations.

I think a lot of people go into Buy-'to- Let in Spain and in the UK in a state of blissful ignorance. Our landlord here is very good and has become a friend which is maybe why he asked,a few years ago, if we would pay a little more rent as the £ had risen against the euro!! Instead of paying more, we are now paying over 50% less rent than when we moved in five years ago.
The reason for that is simply that we are excellent tenants and pay the rent a year in advance although I'm not doing that next year as it's not part of our contract. He is resident in Austria and owns one other property here. We seem to be the first tenants in a decade plus who pay any rent! So he wants to keep us.
I think many landlords fail to understand that rental levels obey markets and not their personal financial needs. I've heard so many horror stories from landlord friends of unpaid rents, damaged properties, expensive and pointless court proceedings....pointless because in many cases defaulting tenants just disappear.
After years of being a property owner I must say I enjoy being a renter!


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## David1979 (Feb 15, 2013)

DunWorkin said:


> A lot of things in Spain are paid in cash but I would never pay something like my rent in cash. If there is a dispute you have no proof of payment.


I've always paid my rent in cash, and got a receipt every single time.


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## mrypg9 (Apr 26, 2008)

If I wasn't going to be given a receipt for my cash, the landlord wouldn't be getting my money.
Receipts should be offered for every commercial transaction.
Normal business practice.


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## David1979 (Feb 15, 2013)

Yeah, I assumed so as well. I was just replying to DunWorkin who thought there would be no record of payment if paid in cash.


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## Allie-P (Feb 11, 2013)

Many thanks for all the informative replies.... much appreciated.

We will be looking for somewhere else to live. This Landlord is a foolish man - we are exemplary tenants....paying his Rent & all other bills presented to us.....immediately !

We, also, take great care of his house, our home !

I still don't understand how Agents can collude with Landlords - to break the law, though


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## snikpoh (Nov 19, 2007)

Allie-P said:


> Many thanks for all the informative replies.... much appreciated.
> 
> We will be looking for somewhere else to live. This Landlord is a foolish man - we are exemplary tenants....paying his Rent & all other bills presented to us.....immediately !
> 
> ...



Please, everyone, don't fall into the trap of paying _all other bills presented_.

Bills like utilities should either be in your name (preferable) or should at least be taken directly from your account and the paperwork sent directly to you.

Some landlords/agents simply demand money for bills without you seeing the actual bill - not very wise and certainly not to be recommended.


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## xabiaxica (Jun 23, 2009)

snikpoh said:


> Please, everyone, don't fall into the trap of paying _all other bills presented_.
> 
> Bills like utilities should either be in your name (preferable) or should at least be taken directly from your account and the paperwork sent directly to you.
> 
> Some landlords/agents simply demand money for bills without you seeing the actual bill - not very wise and certainly not to be recommended.


or you pay the landlord & still get the electricity/gas/water etc disconnected because they haven't paid it on......

yes - that happened to me when we were new & green... I also had a landlord - well it was a managing company in fact - they took readings from the meters & created their own facturas

after a while we discovered that while the readings were correct (we checked) the cost per unit they were charging was about twice what the gas, water & electricity companies were charging!!

we never did get to the bottom of whether or not that was legal - we moved out & warned their other tenants though


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## DunWorkin (Sep 2, 2010)

David1979 said:


> Yeah, I assumed so as well. I was just replying to DunWorkin who thought there would be no record of payment if paid in cash.


Receipts for amounts paid in cash are not as legally secure as you might think. 

We had a situation with some work done in our house. We paid in cash and got a receipt. The work should have been covered by a 5 year guarantee. When we tried to chase the company we were told that the receipt was not legal as it did not have the company's CIF number on it.


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## mrypg9 (Apr 26, 2008)

DunWorkin said:


> Receipts for amounts paid in cash are not as legally secure as you might think.
> 
> We had a situation with some work done in our house. We paid in cash and got a receipt. The work should have been covered by a 5 year guarantee. When we tried to chase the company we were told that the receipt was not legal as it did not have the company's CIF number on it.


Which could have meant that they were illegal?
Our landlord sent an electrician to do some work in our house. He submitted a receipt for an ICP which had no company name or CIF. Clearly working on the black. 
We told our landlord that we were not happy with having someone possibly unqualified doing work in a house we lived in and refused entry. 
Our landlord told us to find an endesa recognised electrician which we did.


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## castaway06 (Jul 25, 2014)

Yes legally all receipts in Spain must show the issuers CIF (companies) NIF (individuals) number. If it doesn't beware

CIFs are a letter followed by eight digits C98765432
NIF's are eight digits followed by a letter 87654321T
and NIE's for us are letter(X,Y or Z) seven digits letter X9876543H

For your information if you ever have a problem putting your NIE into an online system try replacing the X with a zero, the Y with a 1 or the Z with a 2 this will make it into a valid NIF


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## larryzx (Jul 2, 2014)

Those who have spent 'any length of time' in Spain will be aware that it is more usually the practice that one get a receipt which is 'worthless'. 

Even that from my gestor (when making my tax declaration etc) is from a receipt pad purchased in a stationery shop. 

I have also had that type too from solicitors, agents etc. Shops and other traders, often do the same.

When I was the president of a community and insisted on legal receipts from suppliers, I was required to give my NIE which was shown on it. Thus Hacienda had an easily accessible record that I had made the payment. 

Can't say I am all that concerned though, and I have chosen to "live in Rome ....".


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## Allie-P (Feb 11, 2013)

snikpoh said:


> Please, everyone, don't fall into the trap of paying _all other bills presented_.
> 
> Bills like utilities should either be in your name (preferable) or should at least be taken directly from your account and the paperwork sent directly to you.
> 
> Some landlords/agents simply demand money for bills without you seeing the actual bill - not very wise and certainly not to be recommended.




No, in our case - although, the Electricity/water remain in the Landlord's name, we only pay him on sight of the original paid bill - which we then retain for our records.

At our previous rental, the electricity was in our name. When we left, there was so many problems cancelling.

This Landlord, once presented us with the same bill, twice. An error on his part - or, so I thought at the time!

We checked our records & were able to prove the payment.......

We will learn by, 'Our mistakes.'


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## mrypg9 (Apr 26, 2008)

larryzx said:


> Those who have spent 'any length of time' in Spain will be aware that it is more usually the practice that one get a receipt which is 'worthless'.


I don't know how long 'any length of time in Spain' encompasses but I have spent enough years here to insist on a valid receipt...one with company name, date, details of work done and CIF or NIF. Especially so when having work done on a vehicle which may require spare parts. Then you need a part number as guarantee, as was our practice to supplyto our customers in the UK.

Surely that must constitute a valid receipt?

I know of people who have lived in Spainforover thirty years who get ripped off. I think you either are prudent or not.


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## larryzx (Jul 2, 2014)

mrypg9 said:


> I don't know how long 'any length of time in Spain' encompasses but I have spent enough years here to insist on a valid receipt...one with company name, date, details of work done and CIF or NIF. Especially so when having work done on a vehicle which may require spare parts. Then you need a part number as guarantee, as was our practice to supply to our customers in the UK.
> 
> Surely that must constitute a valid receipt?
> 
> I know of people who have lived in Spain for over thirty years who get ripped off. I think you either are prudent or not.



That you find you need to insist, I guess means you are aware that it is not 'common practice' to do so. Albeit that a major motor agent and the like probably would provide a legal receipt, a 'local man' giving you a 'good price' probably would not. 


That was the point I was making.


PS When IVA was first introduced it was possible even in large establishments to tell them that you did not want to pay the tax, and you did not. But we know, 'times they are a-changing'.


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## mrypg9 (Apr 26, 2008)

So far I haven't had to 'insist' in the sense of banging my fist on the table, I just make my expectations clear.
But yes, from what I hear, many people are happy with a good price from a local man.

We prefer to use legitimate local businesses as we were aware in the UK of how legitimate businesses can be undermined by cowboys.


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