Spain’s Tax-Cheat Landlords Add to Rising State Debt

this is going to happen here in USA too, as a lot of sales went to "specu/investors". many might be working off the books, and then also add to that renting off the books. if i could go long the shadow economy, i would! ------------------------------------------ http://www.bloomberg.com/apps/news?pid=20601109&sid=aINZ993NRLw8&pos=11 * More than half of Spain’s landlords are dodging taxes... [more]

this is going to happen here in USA too, as a lot of sales went to "specu/investors". many might be working off the books, and then also add to that renting off the books. if i could go long the shadow economy, i would! ------------------------------------------ http://www.bloomberg.com/apps/news?pid=20601109&sid=aINZ993NRLw8&pos=11 * More than half of Spain’s landlords are dodging taxes as the rental market expands, depriving the financially strapped government of more revenue each year * Owners are asking for payment in cash from tenants to avoid tax on 2.5 billion euros ($3.5 billion) of earnings annually, the Gestha union of tax inspectors estimates. An increase in rental properties nationwide hasn’t generated any more tax revenue. * Taxes go unpaid on income equal to about a quarter of gross domestic product, Gestha estimates. * 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. At the same time, more Spaniards are trying to lease homes after they were priced out of the market in the years before the crash, making it easier for landlords to strike deals that don’t involve the taxman. * Encinar, whose company lists 360,000 properties for rent and purchase, said Gestha’s estimate that 54 percent of landlords are ducking taxes “falls short of the true figure, which is set to grow further.” [less]