"If Palma limits the rental price, a part will be paid with black money"
Palma City Council's claim to promote effective control of housing rental prices creates the risk of promoting the circulation of black money in the real estate market. This is how the employers' organization Pimem considers it, and it does so by appealing to a specific case: if the maximum amount that the owner can charge his tenant is 900 euros, there will be situations, according to Pimem, in which the tenant "will pay in B about 300 or 400 euros extra" to the owner, while the latter, in turn, will stop paying the corresponding taxes.
The employer considers that the limitation of rental prices will encourage part of the cost of the leases to be covered with black money, generating a loss in the tax collection of the Administration. At the same time, Pimem has warned that a measure of these characteristics "is not working in cities similar to Palma", in which, at the time, actions have been carried out in this regard.
"When a maximum price is limited, what grows is a secondary market that facilitates payment and collection in B, generating a black market of overpayments for rent where the part that the owner receives does not pay taxes," insisted the business organization, whose president , Jordi Mora, has warned that if this initiative goes ahead, another of the direct consequences will be that "the owners will ask their tenants for more guarantees" and, at the same time, "the tension in the market will provoke speculation".
Basically, Pimem's approach is that if already at this time, in the case of certain groups of the population, it is difficult to access a house for rent due to the numerous requirements that they are forced to satisfy, the entry into force of a Law that cuts the income of tenants will make things even more difficult for these users.
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Pimem also predicts that restrictive legislation in relation to rental prices will have the effect that the cheapest homes experience an increase in rental prices in order to adjust the rate to the ceiling imposed by the regulations. As for the most expensive flats, the entity concludes that they will simply cease to be part of the real estate offer and, therefore, the
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Networking Event 25 of May
We already have a date for the next REU meeting. Make a hole in your agenda and come meet new people and generate new opportunities!
Now is the time to strengthen strategic relationships within the sector. Come share with us on Thursday, May 25, 2023 from 7:00 p.m. to 9:30 p.m.