Be aware of changes to the law when making large cash transactions in Spain

Cash limits on transactions

Changes in the law continue to come thick and fast in an attempt to generate revenue. One of the most recently implemented measures as part of the Anti-Fraud laws is the cap on cash payments. At first glance, this can seem to be a simple ruling that should be easy to implement:

1. Residents are no longer allowed to use cash to pay for items or services over €2,500

2. Non-residents  are no longer allowed to use cash to pay for items or services over €15,000

Both of these restrictions apply only if you are purchasing from a business, shop or professional service and do not apply to private individuals. However, it might come as a surprise to discover that this restriction not only includes the total payment but also the deposit if a deposit is made.

So, for example, if you wanted to make a deposit on a new build property you could be in breach of the new legislation unless the deposit is paid through a bank transfer or with a credit card. Even if your deposit is less than the €2,500 limit, because it is part of a total payment of perhaps €150,000, it falls within the new legislation.

It doesn’t just apply to houses. If you are buying a car from a local garage you may find that the total cost is above the threshold meaning that every instalment must be made via a bank transfer or credit card.

If you are not sure of the legality of your transaction you should check it out with a professional as the penalties can be severe. The fines are at the rate of 25% of the cash payment and are enforceable on both parties up to five years after the cash transaction takes place.