Cash payments under the table are rife in the rental sector, whatever the Spanish tax authorities might say.
More than half of all Spanish landlords charge rent in under-the-table cash payments, finds a new study of Black Economy rental contracts by Gestha, a division of the Ministry of Finance.
If true, more than 1 million landlords (55.4pc of the total) fail to declare their rental income, reveals the study, carried out by specialist from the Spanish Treasury.
Almost anyone with any experience of renting property in Spain could have told them that cash payments are rife, if not the norm.
Gestha’s findings were based on cross-referencing data from both the Spanish Tax Authority and the Ministry of Housing, but the Tax Authority, known as La Agencia Tributaria, has questioned the findings, saying they are impossible to ratify.
They argue that data used by Gestha – an estimate of the number of rental properties from the Ministry of Housing and tax returns from the Agencia Tributaria – are distorted by various factors and cannot be cross-referenced without being misleading.
Gestha also find that attempts to prevent tax fraud amongst landlords have been a big failure, with rental fraud rising by 473 million, or around 20pc, to almost 3 billion Euros.
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