Treasury Trawling Internet For Rentals

Your rental income is being watched!
Your rental income is being watched!

Following the introduction of new regulations for short-term rental properties, the government are now employing new tactics to find and punish those who do not declare their rental income.

Up to 50,000 property owners could be in line for sanctions if they are found to be renting out their property for short-term (holiday) rentals without telling the authorities or declaring any income they receive from it.

The government have set up a special division to track down the undeclared properties by trawling internet property portals. They are also said to be monitoring electricity usage to ascertain if the property is inhabited.

The Treasury workers’ union, Gestha, estimates the total amount of undeclared taxes to be in the region of 100 million Euros, which is why they are keen to put a stop to it.

However, it’s not only a tax issue. Many in the hotel industry state that it is unfair competition as they have to comply with a raft of regulations, including health and safety issues, which undeclared rental properties do not. Black-market rentals are thought to occupy up to 30% of the total properties for rent on the Costa del Sol.

Fines of up to 25% of the rental income will be levied, being based on the size of the property and the rental costs requested by the owner. The fines can also be backdated so don’t think that owning up now to years of undeclared rentals will get you off the hook. You must prove when you began renting your property and pay the fine based on the length of time you have failed to declare the income. A little heavy handed, but necessary to bring the market under control.

There are differing opinions from industry insiders with some saying the regulations will improve the sector in both quality and safety. Opposing opinions suggest many owners will simply stop renting out their property for short-term rentals and the market will be strangled leaving a shortage of holiday accommodation.

 

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