The Ministry of Finance has estimated that more than half of all residential leases in Spain not declared to the relevant tax authorities. This has been stated just over a month since income tax rent relief for landlords was raised from 50 to 60%. Specifically, they estimate that there are over one million undeclared rentals in Spain, some 54% of the total of all rented property and representing annual tax losses of 2,450 million to the government.
The figure of 2,450 million is calculated with the reductions, but excluded from this calculation are garages related rentals, shops, land and offices and commercial property. The report says that non declarations were slightly reduced by three percent in the last year, going down from 57.1% to 54%.
The report complains that three years after new laws on fraud prevention were put in place, the Tax Office has not yet adopted the controls that would enable effective implementation of its main weapon, which required energy and utility companies to pass on information that would permit the identification of buildings that, while seemingly unused were actually being used to rent.
Geographically, the report notes that over two thirds of rented accommodation whose leases are not declared (68% of the total) were concentrated in Catalonia, Andalucia and Madrid, while the regions of La Rioja, Cantabria and Aragon were least problematic. The study said, property owners who fail to declare the most were located mainly in Andalucia, where over 74% of rented housing is not officially declared.
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