CHOOSING A LAWYER OR LEGAL REPRESENTATIVE
PRIVATE PURCHASE AGREEMENT
FINANCING THE PROPERTY
• Approximately 350 Euros for a property valuation
• Approximately 0.5 and 1% mortgage opening commission
• Insurance, varying on average from 220 to 300 Euros per year for buildings and contents
• A fee for the Notary & Registration of the mortgage
SPANISH IDENTIFICATION NUMBER (N.I.E.)
An N.I.E. or Numero de Identidad de Extranjero, is compulsory when you purchase a property in Tenerife and has to be applied for at the local Police station prior to going to Notary for final completion.
Again, All Properties Tenerife staff will help you with this process.
A sale is finalised when the Title Deeds are signed by both parties before the “Notario” Notary.
The Notary is a legally qualified,independent official appointed by the government and comparable to a judge, who ensures that all the paperwork has been drawn up correctly, the land registry documents are in order and that the property is free of all debts.
The Title Deeds are written in Spanish and are translated by an official translator before being signed to ensure that all personal details are correct and that the parties fully understand the nature of the transaction and the type of document that is being signed.
The notary will not allow the client to sign unless they are 100% satisfied and understand everything.
Once the paperwork is signed at the Notary , the Title Deeds “Escritura” must be presented in the Land Registry office where the new owner’s details are registered. This process takes approximately 4-6 weeks.
All Properties Tenerife will collect the Title Deeds on your behalf and make them available for you to collect from our office at your convenience or send them via courier to your home address.
All Properties Tenerife administration staff will assist you to transfer all the utilities into your name and organise standing orders for the payments for local rates, community fees, electricity, water, etc to ensure that everything is paid on time and your accounts kept up to date.
FEES AND TAXES
There are a number of taxes and legal fees you must pay when purchasing of a property in Tenerife.
Before signing the Private Purchase Agreement, All Properties Tenerife will provide an accurate estimate of these costs known as “closing costs”.
It is important to allow between 9 and 12% of the purchase price in order to close the transaction depending on whether or not there is a mortgage required.
The normal costs are:• Transfer Tax or Impuesto General Indirecto Canario (IGIC) currently 7% of the official value of the property, if purchasing a new property from a developer or 6.5% when purchasing a resale property
• Document tax (Impuestos sobre actos jurídicos documentados, AJD) at normally 0.75% for the first registration of the property
• Plus Valia Tax the increased value of the land, which is calculated at various rates on the increasing annual value since the previous sale. Legally the vendor is liable for the “Plus Valia” tax but the normal practice is that the purchaser is asked to pay all fees & taxes for transferring the property
• Notary Fee for drawing up the title deeds and researching the property. This varies slightly depending on the declared value of the property but is between 0.1% and 0.4%
• Land Registry Fee final registration of new owner’s details which again varies between 0.1% and 0.3% of the value
RENTING YOUR PROPERTY
If you do not intend to use the property you are acquiring all year round, you might choose to rent it through our Marina Properties rental programme.
At All Properties Tenerife we will handle all aspects of your rental such as advertising and letting your property, screening clients, dealing with security bonds and collecting rental, cleaning and maintenance, laundry etc.
COMMUNITY OF OWNERS
All properties that form part of a complex will normally be subject to the laws relating to Community Fees.
These laws regulate and protect the interests of the various owners of property, i.e. “the community”, on that complex.
A “Community of Owners” must be established to manage the running of the complex.
When buying on a new development, the developer normally establishes the initial Community which is then changed via an owners vote at the first Annual General Meeting.
The total costs of running the complex are shared between the owners, usually based on their individual property as a fraction of the total area of the properties but normally for example 1 bedroom owners will all pay a similar amount, as will 2 bedroom owners etc.
The Community is very important for many clients as they provide and maintain the various services required by any shared community. This includes the supply of water, electricity, satellite TV, swimming pool maintenance, communal lighting and cleaning services for the communal areas, etc, which all need to be organised and paid for.
The President and Committee members voted for by the owners should hold regular meetings to discuss, consider and implement the needs and requests of other owners, and then direct the Administrator accordingly to carry out these requests.
MAKING A WILL
Although a will may not be the first thing on most peoples’ minds, it is very important that all clients have a Spanish will as well as one from their own country should anything unexpected happen.
It is much quicker and less time consuming, making the process much more straightforward to have a will registered in the Notary here and your assets distributed according to your wishes. It is therefore easier and highly recommended to draw up a Spanish will, a rather straightforward and inexpensive document that our staff can prepare and present to the authorities for you to sign.
All Properties Tenerife can help you with a Spanish will.
It is advisable for all clients to purchase buildings and contents insurance for their individual property which All Properties Tenerife can help you with although many clients who decide to organise a mortgage tend to use the bank with whom they have their finance with.
For the communal areas, the Owners Association (Community) will have arranged an insurance that will cover these areas which also normally includes third party liability.
This guide is an overview of the main points for you to consider when thinking of buying a property here in Tenerife.We hope it acts as a valuable source of information in order to help you facilitate your purchase with All Properties Tenerife.