Britons with holiday homes in Spain have been warned they may have to pay thousands of pounds more in tax after a clampdown on the practice of under-declaring sale prices. Sunday Times

The Spanish tax office is using a new computer system to crack down on homeowners who evade tax by claiming to have sold their properties for much less than is the case. For decades, buyers Spaniards and foreigners have under-declared sale prices by as much as 30%.

So if someone was selling a flat worth €100,000 (£69,500) they might officially sell it for €70,000. The other €30,000 would be handed over in cash, reducing the amount on which tax would have to be paid.

Bill Blevins of Blevins Franks International said: “It has always been illegal but many buyers were pressured into accepting it by sellers who wouldn’t have otherwise agreed to a purchase.”

Provided the buyer also underdeclared when he or she eventually sold the property, nobody lost out.