Tax inspectors check bank accounts of buyers and sellers of real estateto establish whether their buying and selling transactions were legitimate.
Auditors mainly check expensive real estate that was sold at the value declared in the contract, in cases where its real value was significantly higher. They will figure out whether there were any money transfers hidden from the authorities from the buyer’s account to the seller’s account, which exceed the sale price of the property.
The Independent Government Revenue Authority (AADE) will also look for instances where large amounts have been withdrawn from the buyer’s account during the acquisition period, possibly concealing a cash payment of some of the property’s value. Basically, it will check whether the purchase amount differs from that indicated in the contract, and whether there was an additional payment in cash.
In this context, indirect methods of control will also be used, such as the method of paying bills (for example, in cash), travel, and in general the lifestyle of the seller, who may have collected money during the sale of the property. Such cases are characterized as a high risk of tax evasion and money laundering.
Not only the purchase of real estate is subject to verification. In total, it is estimated that more than 2,500 property checks will be carried out in 2023, also related to inheritances, parental benefits and donations. Particular attention will be paid to parental benefits and donations after the tax-free limit has been increased to 800,000 euros. In inheritance, in particular, the review will focus on cases where there was an inheritance tax exemption or parental benefits because the value of the property was below the tax-free threshold.
AADE staff will also check short term rental housing to find out if the income was declared on a tax return, and buying real estate to obtain a five-year residence permit, known as the “golden visa”.