Hacienda to collect millions from undisclosed landlords

lost revenue
Hoping to raise millions from "secret rent"

Spain’s treasury, or Hacienda, is trying to collect millions in tax from the undisclosed income from more than one million rented properties, according to figures released by the Spanish union of tax inspectors, Gestha.

There are thought to be over one million properties being rented out where the owner is not declaring the rental income, and therefore not paying the relevant taxes.

The hacienda hopes to collaborate with the electricity companies to monitor how much power is being consumed in a property. The power companies will also disclose to the government details of the bank accounts associated with the electricity supply.

The hope is that the collaboration will help to detect homes and shops showing signs of daily use by people other than the owner.

“It is a good way of boosting rentals and increasing state revenue.” said Manuel Gandarias, director of Pisos.com.

“It is more than likely that the announcement will have a greater impact than the measure itself with ‘black’ rents coming to the surface as more owners come clean.”

The average rent for tenants in Spain is €628 for a property of 95m² suggesting that the undisclosed rentals are netting their owners more than 7,500 million euros.

With the number of rented properties increasing due to the crisis and high unemployment this amount is likely to increase this year. Rentals are up 5% since 2010 and still rising.