Spanish taxman homes in on Brits

Spanish taxman homes in on Brits

Some half a million Britons are said to own a home on the Iberian peninsula - and many rent it out without paying tax on the income. The Spanish revenue has had enough and is launching an efficient clampdown.

Spanish tax authorities are targeting overseas property owners as part of a wider clampdown on tax dodgers - a strategy that raked in an extra £1bn last year.

More than half a million Britons are thought to own homes in Spain either as an investment or a holiday home which may be let for odd weeks to friends and family. Owners have to pay tax of 25 per cent on rental income.

Traditionally, Spanish tax collectors have been lax at making sure tax was paid by foreigners, many of whom never declared rental incomes. The Spanish used to take the view that if they got something out of foreign residents and home owners, it was better than nothing. Provided non-resident foreigners paid the wealth tax - charged at between 0.2 per cent to 2.5 per cent of the registered value of their homes - they were happy.

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