Tax fraud in 85% of Spanish property transactions

The Spanish cadastral office has introduced a new system to clamp down on tax fraud. The new system enables the tax authorities to identify when buyers and sellers under-declare sales values to avoid taxes. According to Jesus Miranda – head of the cadastral office – the sale value recorded in the deeds is only correct in 15% of transactions. In the remaining 85% of transactions, property values are under-declared by 30% to 40%. The Spanish tax agency has also started to compare asking prices in classified adverts and internet portals with final sale prices declared in deeds. Differences of up to 50% have been noted in many cases. The Spanish tradition of under-declaring property values and part paying under-the-table in cash to avoid taxes is getting riskier. You have been warned.