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Buying Property In Tenerife
As a professional and long-standing Tenerife real estate agency, we are able to provide valuable information and advice about the local Tenerife property market, property trends and future development plans that may affect where you choose to live Tenerife.
We have put together a brief guide outlining the purchasing procedure in Tenerife.
Deposit for property in Tenerife
Once you have found your dream house in Tenerife, the most important next step is to secure it by paying a deposit. This is usually 10% of the purchase price and should be held by either a lawyer or the estate agent handling the purchase. It is better to consult with your lawyer before any funds change hands.
Community Costs/Outstanding Expenses in Tenerife
If the property is on an urbanization or part of a residential complex, then you will automatically become a member of the Community of Property Owners, responsible for general maintenance, gardening etc. Make sure that all fees are paid up to date and that you are aware of how much your annual community costs will be. Property debts of any kind remain with the property in Spain. In addition, if detailed checks are not conducted, then you could inherit all the outstanding debts on the property. Check with your lawyer or estate agent in Tenerife, to make sure the property has been thoroughly searched for outstanding bills.
Title Search
Your lawyer must check with the local Property Registry to ensure there are no outstanding liens or mortgages against the property or whether it has been embargoed for non-payment of a mortgage or taxes.
Nota SimpleYou will receive a copy of the entry for the property as listed in the registry books. This Nota Simple shows who owns the property and includes a detailed description with boundaries. Some properties are held in the name of an offshore company. This used to be common practice as it avoided Spanish transfer and inheritance taxes. Sometimes you will receive two Notas Simples, one at the beginning of negotiations for the purchase and again immediately before you sign the contract.
Check the Town Hall
Property in Spain is subject to an annual municipal tax (IBI) the seller should provide you with up-to-date receipts, which will state the exact amount of this annual tax, as well as the "Valor Catastral", which is the official value of the property as assessed for tax purposes and necessary when you prepare your annual tax return. There may be additional charges, such as rubbish collection or other services.
Costs of Notary and Registry
The approximate cost for the notary and registry is 10% of the purchase price. Costs may be slightly less as the purchase price increases, as they are not calculated as a percentage.
Plus Valia
A municipal tax known as the Plus Valia is assessed on the difference in value of the property now and the last time it was transferred. This varies according to the time elapsed since the last transfer.
Spanish law suggests that the Plus Valia should be paid by the seller, but the practice of assigning all taxes and fees to the buyer is so firmly established that it is more usual for the buyer to pay the Plus Valia, though this is a point that your lawyer can negotiate. In any case, the purchase contract should state whether the seller or the buyer is paying all fees and taxes.
Property purchases are also subject to a transfer tax of 7% if you are buying from an individual. If you are buying from a promoter the tax is VAT and is 7%, but in these cases there is an additional 0.5% document tax. If you are purchasing from a non-resident, Spanish law requires you to withhold 3% of the purchase price and pay it to the Spanish tax department, Hacienda, as a guarantee of payment of the seller's Capital Gains Tax. (If the tax amount is lower than the deposit, the seller can later claim the difference from Hacienda).
The Contract or "Escritura"
Approximately a month after you have made your deposit, you can expect the completion of the sale to take place. The contract must be in Spanish, although you can obtain a translation if necessary. A legal property purchase contract is called "Escritura de Compraventa" and is signed by both parties in the presence of a Spanish Notary who will keep the original copy of the contract in his files.
The contract should describe the property and its location in detail, as well as the identity of the purchaser and seller. If the purchase is financed with a mortgage, the bank representatives are present in order to pay and sign the mortgage.
The final step is to take your copy of the Escritura to the Property Registry and have it officially registered, at which time you will obtain your Escritura Pública, the title deed.
The Tenerife property is now legally yours... well done!
Featured Properties
House in Fañabe
Spacious Town House with Internal Garage, Small Complex with Heated Pool. The house has a nice front garden with a spacious separate kitchen and large bright and sunny lounge with sliding doors to a terrace and the pool area with a pretty sea view. Upstairs are two double bedrooms each with its own bathroom with cnr bath and shower, both having its own terrace and built in robes. There is a private roof terrace with views to the port an Del Duque. The house has its own private garage with plenty of room for an office or gym. Costa Fanabe, walking distance to local shops and the famous Del Duque Beach. Excellent area for shopping, schools and lesuire interests such as golf or swimming.
Apartment in Playa de Alcala
Beautiful one bed apartment on the first floor with the most spectacular sea views. Satalite TV and swimming pool on complex
