Taxman looks into German property

The Majorcan taxman is looking into the purchase of property on the island by Germans, according to the German magazine Capital. According to the article, Germans own 432'000 properties in Spain, and most of them are in Majorca and Andalucia. Investigations are centred on the money declared in each operation, which is usually lower than the actual amount, leading to pockets of “black money“ which escapes both Spanish and German taxes. Antoni Miralles, head of the tax office in the Balearics, has been quoted as saying one of his department's priorities is to investigate real estate operations, which generally involve large sums of money. It has signed an agreement with the Balearic finance ministry, to exchange data on the inheritance tax, in an effort to check up on figures. According to the German magazine, there has been a drop in taxes raised from property sales because of the custom of declaring a lower price than the real one on official documents. The German authorities are now writing to German property owners asking for details of their property in Spain. If they claim that they do not own property, but their name figures in the register, the matter will be passed on to the authorities. The magazine also affirms that an increasing number of Germans are purchasing second homes on the island. Between 100'000 and 200'000 Germans are alleged to have purchased a home on the island over the past ten years.