Blakemore Walker Chartered Surveyors & Legal Consultants

SPECIALISING IN PROPERTY PURCHASE AND SALES IN ASTURIAS, CANTABRIA & GALICIA

MEMBERS OF THE ROYAL INSTITUTION OF CHARTERED SURVEYORS

GOLF IN NORTH SPAIN

SKIING IN NORTH SPAIN

ANIEZO IN ASTURIAS

SOMIEDO IN ASTURIAS

PHOTOS

THE SPANISH ECONOMY AND THE PRIVATE RENTED SECTOR

Possibly more than half of spanish landlords are avoiding their tax liability as the rental market expands, depriving the financially strapped government of revenue.

The crisis in Spain triggered by the housing crash has left the government with a large budget deficit and as the hidden economy grows the government will be compelled to clamp down.

A drop in house prices starting in the second quarter of 2008 has forced many people who bought homes as investments to seek tenants for their properties rather than selling at a loss. Also, there are more and more prospective tenants that require these properties and who are willing to deal in cash.

The penalty for avoiding tax on rent is a fine equivalent to 150 percent of the unpaid amount and the tax must also be repaid. There is no punishment for the tenant.

There are currently significant tax breaks for landlords renting to tenants under 35 years old and this has helped to confuse the situation.

Rental values have been shown to risel during 2010 but this is on the back of a slight fall in the previous year.