tenerife buyers guide European Estate Agents Union Tenerife Property Consultancy offers advice on legal fees, taxes and mortgages

Tenerife Real Estate Agents for Buying & Selling Property / Properties

Tenerife Property Consultancy

Tenerife Property Buyer's Guide

Here we offer advice on the legal procedures of buying property in Tenerife, as well as detailing the obligatory legal fees and taxes you will pay when purchasing Tenerife real estate.

Also mortgage application procedures from Tenerife Banks.

We are here to assist you in buying and selling property in Tenerife every step of the way

 We have done this many, many times and our experienced team will be with you at every stage from your initial enquiry to our fantastic after sales service

It is necessary to carry out several searches to ensure there are no charges or debts against the Tenerife property you wish to buy.
In Tenerife any debts or charges associated with the property are passed on with the property (they are against the Tenerife property Not the owner) We will introduce you to a Spanish Lawyer here in Tenerife, who will ensure the Tenerife property is debt free.
The solicitor in Tenerife will collect the following documents:Without the original of these documents on the day of completion a Spanish Notary will not sign the escritura (Title Deed) unless it is clearly stated that you are aware that certain receipts were missing.

What is a Notary?

A Notary must sign the Escritura to make a property sale legal, they will check all the paperwork is in order and that the property buyer and seller understand the proceedings.

If there is an outstanding mortgage on the property, this will be cancelled and the cancellation registered on the same day that you sign at the Notary.

Obligatory Legal Fees and Taxes when buying property in Tenerife

These are in addition to the property purchase price and are usually between 8-10% of the new declared value on the escrtitura. They are as follows:
  1. Transfer Tax
    5% (I.G.I.C.) of the official (declared) value, when you buy a NEW build property. or 6.5% ((Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados- Mod 600) when you buy a RESALE property from a private owner.
  2. Title Deed (Documented Legal Acts Tax) (Impuesto de Actos Jurídicos Documentados)
    0.5% of the declared value Title Deeds A Spanish Escritura, the equivalent of title deeds in the U.K., is a more complicated business than similar documents in other E.C. countries. The document consists of several pages and contains details of the property including number of bedrooms and bathrooms, the size in square metres of each room and any terrace, garage or garden space. It also contains the names and NIE /Passport numbers of both the property seller and buyer and the purchase price of the property.
  3. Land registry fees
    This fee is about 0.5% of the declared value of the property
  4. Notary Fees
    Fixed scale of charges based on the price of the property purchased
    The Notarial charges for preparing the Escritura and presiding over its signing are set by law on a set scale depending on the property value.
  5. Lawyers fee
    Depending on the time and work involved normally a fee of between 1 - 2% of the property purchase price may be requested.
  6. Plus Valia Tax
    The Plus Valia Tax is a type of capital gains tax, based on the increase in value of the land and not the increase in value of the property. It is strictly speaking, a tax payable by the seller, but in practice, in Tenerife the purchaser is normally asked to pay all fees and taxes due on transfer of property, this can be negotiated at the time of sale. This is a tax levied by the Town Hall and is based on the surface area of the land and is calculated at various rates on the annual increases in the value of the land since the previous sale, on the cadastral value and on the date of the previous escritura.


NIE ((Numero de Identificación de Extranjeros Fiscal Number)

The Tenerife Lawyer will also arrange for your NIE application Any person wishing to purchase a property or have a fiscal representation in Spain must obtain a certified identification number (N.I.E.)
This is simply an identification number required by non-residents of Tenerife.
If you subsequently become a resident this will also be the number of your Residencia (Tenerife residency permit).
It is a straightforward process (with our help) to obtain an N.I.E. number.

Impuesto sobre el Patrimonio (Wealth tax) which is calculated at 0.2% of the value of assets here in Tenerife.
If you are a homeowner, when you want to sell your property, as your principal house (or family house) you have 2 years to buy again without having to pay taxes.

When you sell as a NON resident you have to pay a 3% retention on the declared property value.
Why is this?
The Spanish government wants to ensure that a non resident does not leave debts behind in Spain so they retain from the only asset they have. You can claim this 3% retention back, it usually take 3 to 6 months, by means of calculating the Capital gains.

Guide to Mortgages for Tenerife Property Purchase
Non-residents can obtain between 60 to 70% of the bank valuation. We must point out that banks in the Canary Islands do not value a property the same as in other countries. Rebuilding costs play an essential role in the official valuation purpose of mortgage loans, a rough guideline is 1.500€ per m2 .
We can assist you and guide you through the process of obtaining a mortgage here in Tenerife. Costs involvedAdvantages:

The solicitor will automatically arrange for you the transfer of electricity, water, gas, telephone, annual rates and rubbish contributions etc. to your name and set up standing orders at your bank for their payments.

FAQ

What is a sales agreement? A private contract signed between the buyer and seller. It must reflect true ownership, legal definition of the property, the exact dates of payment, currency of the transaction (euros, pounds, dollars etc) completion dates and penalty clauses. We strongly recommend that the seller commits to paying double the amount of the deposit paid should he withdraw from the contract. There would also be a penalty paid by the buyer in the amount of the deposit held should he withdraw from the agreement.

Is it easy for a non resident of Tenerife to obtain a mortgage? Yes, Provided you can submit basic financial information to them, getting a mortgage here is much easier than in most European countries.

Other costs involved in owning a property in Tenerife

Rates
Local rates are payable annually, and are calculated from the rateable value of the land assigned by the local Tax Office.

Basura - Refuse Collection
The Tenerife rubbish collection rate is applied by the local Town Hall according to the property and payable every 6 months.

Water
Water consumption in Tenerife is calculated by the water meter and is payable every 3 months. Payment can be made directly at the Town Hall or by bank with direct debit instructions

Community Fees
Properties on some complexes in Tenerife will have an annual community charge to cover costs of general maintenance, pool care, gardens, reception etc. Depending on the size of the development and the services offered, this can vary between £800 and £1200 per year. Other Tenerife complexes will not share services and there will be a minimal fee to cover street lighting etc.

Electricity
Electricity in Tenerife is charged bimonthly with minimum rates applicable (whether you are in residence or not). Don't forget you use a lot less electricity in Tenerife as no heating is required.

Telephone
Telfonica in Tenerife charged monthly. Standard rates vary according to equipment installed, but can be in the region of £9 per month including a touch-dial telephone. Broadband internet connections are available in Tenerife.

Whilst every effort has been made to ensure the information is correct in this property buyers guide at the time of publication, it is not intended to be a substitute for professional or legal advice, which we always insist you take