The article claims that in the Balearics alone, over 40'000 properties are rented out without their income being disclosed for tax purposes. As most of the fraud occurs in coastal areas, it logically concludes that holiday lets are in a large part to blame. It did not go on to estimate how much is owned by individual foreigners. What is largely to blame is the legislation defining holiday apartment accommodation.
The Government has allowed the Hotel Industry too much influence in the drafting of the laws. As written, they preclude many individual owners from obtaining a Tourist Board Licence allowing them to let legally and then declare the income. The specification is so written - provision of off street parking, swimming pool, 24-hour concierge etc. to effectively prescribe anything but Aparthotels (owned by the Hotel Industry). If an owner lets out an unlicensed flat to a holiday maker, he breaks the law once.
Why not break the law twice by not declaring the income which is, after all, illegal? Hoteliers view private holiday letting as competition and have created legislation to try to suppress it but without using the forbidden words FOREIGN or PRIVATE.
The UK had a similar problem years back when they wanted to write legislation allowing the offspring of the old colonials still living in Africa the right of abode in Great Britain but not the newly independent natives. The quandary was to draft it so that Whites could get a UK passport but Blacks not but without using the forbidden word BLACK. They overcame it by specifying the successful applicants have all four grand parents British. If they had to redraft it today they'd up the anti to include British great grand parents. If the foreign owners band together to circumnavigate the restrictions we can count on the mighty Hotel lobby to rejig the rules in their favour.
Mike Lillico, Playa de Palma