Illegal real estate practice in Belgium Exposed
by FFE EU News Staff
Last 1 January 2014 Belgium banned all manner of cash transactions in real estate to stop money laundering or the manipulation of the price of a property. However, a recent undercover report revealed that cash transactions are still widespread despite the ban.
In a report by the TV programme Volt, the investigators found out that eight out of 10 real estate agents still accept cash payments, risking punishments like heavy fines and cancellation of licence.
Paying through cash has benefits for both the agent and the client: for the agent, it would mean profiting and being liquid at the point of sale. For the client, this would mean paying less tax. In Belgium, buyers have to pay a 10% registration fee for existing houses. Buyers of new houses pay an additional 21% VAT on construction works.
But paying cash can also be a disadvantage for clients once a deal falls through because any down payment in cash made to the agent may never be retrieved.