Tell us something new this has been going on for decades. What about the sale of homes people only declare 50% of the sale price is the government that stupid or they just don,t care.Take Marbella for an example each land sale should be looked at. Compare the sale price declared with the estimated Market value you will see huge amounts of fraud. This is child's play to audit. The only way this will ever stop is to educate your children on ethics

As you say Bill, 'forgetting' to declare rental income has been going on for ages. If everyone renting out their properties had to pay tax, the prices of houses would drop as the investment return would be less.

Regarding the under declaration of prices, the tax authorities are doing exactly what you suggest. Most properties are compared against a rate per sq m or something like that and if what you received was less than that, they send a bill for the tax on the margin, plus a fine for under declaration. It's then up to the seller to prove that he didn't receive any more than he declared. It has led people to under declare the size of the property too, so the Escrituras sometimes bare little relation to the actual property. Where people get caught out on that is with the Catastral description, which should be measured by the authorities