Illegal Property Lettings in Mallorca on the Rise

With the economic crisis making a deeper impact than experts would have anticipated, more and more property owners in Mallorca are turning to illegally renting out their property for extra income. This increase was observed by the Ministry of Tourism and Finance which also raised an alarm bell.

The fact that these homes are not registered as rentable means that they are not regarded as taxable from this point of view, a thing which leads to illicit, non-taxable revenue for the second home owners. In Mallorca, as in Spain, the owner of the home must first obtain a license from the government officials before he can legally rent out his property.

The way that the authorities have caught on with the worrisome trend was by comparing the number of arriving tourists from the Palma airport and the number of tourists staying in the local hotels. Since the numbers did not correspond, it was obvious that some were staying somewhere else on the island, the most probable explanation being in the holiday homes of people owing property.

Numbers go as high as 40% from all arrivals, that’s 40% of people not registering into a hotel and not generating any income for the locals. Last year, 2.8 million visitors chose to stay in residential accommodation while 7.7 million chose hotel accommodation.

Hotel owners and rental homeowners expect the authorities will take countermeasures in order to at least bring down the numbers of this phenomenon which has increased exponentially since the economic crisis took hold of Spain and the Balearics. However, at this time, no active measures have been take to combat illicit rentals.

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