Andalucía’s autonomous government is determined to transform the Costa del Crime into the peaceful Costa del Sol families settling into a Marbella property expect to find when they move in. As holiday home owners across Andalucía rush to comply with new regulations that govern holiday lettings, the government is busy drawing up plans to crack down on Social Security fraud and illegal jobs.
From Marbella to Malaga, expat investors operating as private landlords and entrepreneurs running businesses are feeling the pressure.
Costa del Sol Properties let as Holiday Accommodation
A new decree demands that properties let out for holiday usage must be officially registered as tourist accommodation and comply with a wide range of stipulation to guarantee tourists a certain unified standard across the region. Holiday lettings can be a lucrative business, as many owners of Marbella properties have discovered.
It is possible to register one’s property at the Costa del Sol online, if the home is used partly or wholly for holiday lettings. The new regulations come into force on 11th May and so far, applications have gone up by 705% (as of end of April), the regional government’s delegate in Malaga, Monsalud Galindo, stated recently in an interview with Sur in English magazine.
The Registo de Turismo de Andalucía recorded 1,736 applications between 1st January and 30th April for properties used as holiday rental accommodation. In the same period last year, only 246 properties were registered for this purpose. Only when registered, will owners be able to legally let their properties to tourists. This covers all properties marketed at a fixed price via tourism channels such as online platforms or conventional travel agents.
Costa del Sol Companies and Employees come under the official Microscope
The Junta de Andalucía is also drawing up an inspection plan for an additional 98,000 operations in the battle against Social Security fraudsters and illegal jobs. Any employer paying cash-in-hand for example will be in hot water, as will the employee accepting such payments.
The aim is to battle against tax and employment fraud more vigorously, following on from a nationwide investigation in the last legislature, which discovered 12,512 irregular jobs in Malaga alone. The crack-down netted tax authorities some 157 million Euros in Social Security monies.
An inspection carried out in Andalucía, where more than 64,000 fraudulent employment situations were discovered, resulted in payments to the authorities of 5.12 billion Euros.
The problem is so widespread that the last inspection of 3,335 companies based in Malaga Province unearthed 1,503 irregularities. Checks on 3,933 workers revealed 1,742 illegal instances.
Record Monies recovered from Tax Evaders
In 2015, authorities sent out another batch of inspectors who promptly discovered 292 irregularities across the 488 inspected companies. A total of 711 employees were inspected and an astonishing 360 of them were involved in some irregularity. From fake contracts being issued by non-existent businesses to false registration with Social Security, anything that would allow individuals or groups of individuals to claim benefits illegally was revealed during these inspections.
Of the 2,520 companies inspected in Malaga during the period 2012 to 2015, 717 had their registrations annulled and Social Security was able to claim an additional 157.05 million Euros, of which 45.52 million Euros were paid last year, when inspectors carried out 713 inspections, which resulted in 83 company registrations being annulled.
Part-time contracts also came under official scrutiny; in 157 inspections carried out in Malaga last year, an increase of 15% on the previous year, inspectors revealed 27 irregularities, an increase of 20%, compared to 2014.
Anyone currently contemplating buying a home in Marbella or elsewhere at the Costa del Sol with the view of living and working in Spain should make doubly sure their employment contract is legal and with a properly registered company. New tools given to inspectors to tackle tax evasion includes the Anti-Fraud Law of 2013 and a change of the Penal Code to make ensure penalties for tax offences are a lot harsher than they used to be.
In total, the last anti-fraud campaigns discovered 64,087 irregular jobs in Andalucía. The region accounts for 18% of the total irregularities revealed across Spain. Last year alone uncovered 16,644 irregular jobs. Since inspections began in 2012, tax authorities have inspected 30,200 workers in 89,000 companies and are confident that their continued vigilance will eventually hammer home the message that tax evasion and Social Security fraud simply don’t pay in the long run.
For anyone hoping to secure employment, once they’ve purchased their Marbella dream home, this means checking one’s employer and employment contract carefully for any irregularities that might interest tax authorities.