The story of the €500 notes: €500 notes are currently very difficult to find in Spain, but during the property bubble they proliferated in the property business. The media highlighted this abundance of €500 notes in the property business, calling such unregistered, tax-free payments “black money.”
According to a May 2nd 2007 article in the newspaper Avui, a full 25% of all €500 notes printed in the EU were circulating in Spain in 2005 (nearly 100 million notes). It wasn’t until April 2006 that Spanish authorities started taking measures to reduce the circulation of €500 notes.
Inexperience and non-professional dealers
One of the most unfortunate consequences of the property boom was that just about anyone could enter the property game by buying “off-plan” and selling a property quickly – Flipping the contract or “Dar el pase”. In 2003, for example, properties were bought and re-sold, on average, in as little as four months, during which the price could be easily be inflated by a full 10% and even 20%. It was a good business for people who had never done business before. To point out the predominance of this practice, I would ask among Spaniards: who does not have ever heard of somebody who did “flip the contract” at least once?
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