by Staff Reporter

EIGHTY-TWO per cent of undeclared rental income fraud is to be found in the Balearics, Catalonia, Madrid, Andalucia, the Canary Islands and Valencia, according to a report by the central ministry of finance, which was released yesterday.

Fraud in the Balearics runs to 96.3 million euros a year but it is Catalonia which tops the list with more than 542 million euros a year in undeclared property rental income, the report revealed.

In second place is Madrid with 325.7 million euros, followed by Andalucia with 278.2 million euros, Valencia with 111.8 million euros and the Canary Islands with 144 million euros.

The report was drawn up by cross referencing the latest figures available from the National Institute of Statistics (INE) and income tax returns.
The figure refers only to accommodation and does not include rentals involving garages, shops, plots of land or offices.
The total figure for the whole of Spain is 1'800 million euros a year.
The report said that rentals which most lend themselves to irregularities are holiday flats in coastal resorts, and flats aimed at the most disadvantaged members of society such as immigrants or students.

Other rentals susceptible to irregularities, although to a lesser extent, are the rental of second homes or weekend homes, which are often flats which are apparently unoccupied, but are really being let, and the income not declared.

The region with fewest irregularities is Aragon, where only 32.2 per cent of rentals escape fiscal control, according to the report.
In the Balearics, the tourism ministry has been cracking down on illegal holiday flats. One of the ways in which it does this is by checking up on accommodation offered by travel agencies or looking at adverts on the Internet.


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