This is one of the biggest frauds in personal income tax, which has led the Treasury to implement more effective detection systems.
“According to the data available to the Tax Agency, you have advertised property rentals in various advertising media, including the Internet. We remind you that, if you have received rental income, this must be included in the declaration, as well as any type of income for which you must pay tax and which is not included in the tax data.”
This is a typical message that a taxpayer may receive when filing their 2015 tax return.
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It is important to remember, in the midst of the income tax declaration campaign, the risks that taxpayers who rent out properties run if they do not declare the income they earn. According to some sources, around 30% of rentals are not declared to the Treasury, which constitutes one of the biggest frauds in the income tax.
Landlords who fail to declare their rental income may face significant penalties, loss of deductions and payment of late payment interest, which may not compensate for this action.
The Tax Agency has a lot of data to detect fraud
The Tax Agency has multiple sources of information that allow it to uncover, sooner or later, frauds linked to any type of housing rental, whether it is a permanent or holiday rental and a luxury or standard home.
To this end, the Tax Agency has tested various systems: cross-referencing the addresses declared by tenants with data from the land registry to locate the owners, investigating contracts for electricity and water services in the home, and this year another system has been launched.
The aim is to analyse internet portals specialising in property rentals where owners place adverts and tenants find the offers, ensuring that the Tax Agency can detect whether a taxpayer has used these pages.
Since 2010, the Tax Agency has had information on electricity consumption in properties, which has allowed it to reduce the rate of illegal rentals, according to Gestha.
The Treasury, for its part, acknowledges that the specific plans it has carried out in some regions of Spain to uncover fraud linked to rentals through electricity consumption have borne fruit. “A few years ago, they were useful for locating taxpayers who applied the deduction for the purchase of a primary residence to a second home, but now they are used to uncover irregularities in rentals, including luxury holiday rentals,” the tax authority clarifies.
In this regard, he points out that permanent rentals in 'B' are much lower than those carried out on tourist homes. "In these cases there is more fraud, which is why we are working on it," insists the director of the Management Department of the Tax Agency.
It should be remembered that with this declaration the taxpayer not only contributes to the economy as a whole, but can also benefit from the deduction in force for the owner: a 60% deduction can be made from the declared net income.
If you have any questions about your 2015 tax return, now is the time to contact our tax experts who will resolve all your queries, so that you do not have problems with the Treasury and benefit from all the tax advantages to which you are entitled. Contact us.
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