Short answer: why cash-only is a bad sign
A contractor who will only take cash for a renovation is almost always working without invoices. For you that means three things: no proof of how much you paid or what for; no document for tax purposes; and nothing to stand on if the work is poor or abandoned halfway.
On top of that, Spain has a legal cap on cash payments where one party is a company or autónomo (self-employed). Confirm the current figure with a gestor, but it is low: a flat renovation exceeds it many times over.
What you lose without an invoice or bank transfer
Proof of payment. If a dispute reaches a formal claim or court, you will have to prove you paid at all. A bank transfer with a reference and an invoice settles that in a minute.
The reduced VAT rate on home renovations and its conditions are covered in a separate guide; without an invoice, that conversation never starts.
Money when you sell. Home improvements backed by invoices can be taken into account when capital gains tax is calculated on a sale. Check the conditions with a gestor, but with no invoices there is nothing to count. On a Standard-level renovation of a 100 m² flat, from €200,000 excluding VAT, that is a significant sum.
Why some insist on cash
The main reason is to keep income off the books. Everything else usually follows from that: workers not registered with social security, no liability insurance, a company nobody can find at its address later. If an unregistered worker gets hurt on your site or the neighbour’s flat is damaged, it gets sorted out in your home and with you in the middle.
The tax risk sits with whoever hides the income. The practical risk sits with you: no invoice, no contract with a verifiable company and no warranty obligations you can enforce.
The “cash discount” trap
The usual pitch goes: “Without an invoice you save the VAT.” Work out what you actually get for that difference. You save the tax, but lose proof of payment, the right to claim and the paperwork for a future sale. You also hand over your leverage: cash cannot be recalled like a mistaken transfer, nor held back if a stage is not finished.
On a large renovation that is a bad deal. If the budget does not add up, it is more honest to revisit the scope or the finish level than to strip out your legal protection.
How to pay properly
A transfer to the account of the company named in the contract. Check that the account holder matches the company name and NIF in the contract. A payment to the site manager’s personal account, or the “boss’s brother”, is a reason to stop and ask.
An invoice for every payment, deposit included. In the transfer reference, the contract number and the stage.
Payments tied to completed stages, not calendar dates. We explain how to set that up in our guide to stage payments.
Keep money conversations in writing: messages and emails stay on record; verbal agreements on the stairs do not.
If the contractor says a transfer “takes too long” or “the bank blocks it”, offer to pay on the day the stage sign-off is signed. A normal company has no problem with transfers: it has an accountant, a bank account and an obligation to issue invoices. Excuses at this point are the same signal as asking for cash, just more politely put.
If you have already paid cash
Gather everything that shows payment and scope: handwritten receipts, messages, dated photos of the work, cash withdrawals on the same days. Ask for an invoice for the sums already received. The contractor’s reaction will tell you a lot. Move all remaining payments to bank transfer against invoice, even if that means rethinking the relationship.
If the job has been abandoned or has serious defects, the steps are set out in our guide on what to do if you think you have been scammed on a renovation.
How payment works with us
We work under a written contract, with payments in stages that are defined in advance. One person runs the project, in Spanish or Russian, so money questions are handled without language misunderstandings. We reply to enquiries within an hour.