A guide to buying property in Tenerife
Tenerife, the largest of the Spanish Canary Islands, is an increasingly popular choice for those looking to purchase a home. It’s no surprise really – the sun is out year-round, it has gorgeous sandy beaches and stunning landscapes, what’s not to like?
If you’re thinking of buying a property in Tenerife, lucky you! Before you jet off though it’s important to get to know what’s involved in purchasing a property in Tenerife. So, what does it cost? and what is actually involved in purchasing a property in Tenerife?
Helpfully, we have prepared a quick guide to buying property in Tenerife to help make sure the buying process is as stress-free as possible for you.
What does buying a property in Tenerife cost? (and how can you save money on the purchase!)
On top of the asking price of the property in Tenerife, you must pay taxes and legal fees for the purchase. As a rule of thumb, you should budget for an additional 10 per cent of the property purchase price to cover the legal fees and purchase taxes etc.
A rough break down of these costs is as follows:
- Lawyers’ fees in Tenerife: For the conveyance, typically these are charged at 1 per cent of purchase price + IGIC (VAT) at 7 per cent. However, often lawyers in Tenerife have a minimum fee, which is usually around €1000-1500 euros + IGIC, so if the value of the property is low you may be subject to their minimum fee instead. You may also need a Power of Attorney, which typically costs between €150-€200 + IGIC.
- Land Registry search fees: These are approximately €30.00
- Spanish Notary Fees and Property Registration Fees: Typically in the region of €2000.
- Spanish Property Purchase Taxes: In Tenerife, a transfer tax of 6.5 per cent of the declared value of the property is payable. Alternatively, if the property is a new build, IGIC (VAT) is payable instead at 7 per cent plus 1per cent stamp duty.
TOP TIP! To help save yourself some money on the property purchase, seek the advice of a currency exchange specialist
High street banks tend not to offer very competitive rate when transferring funds from an account held in pounds sterling to an account in held in euros. Currency specialists can typically save between 3 to 5 per cent of the transferred amount, compared to making a transfer through high street banks, which when dealing with large sums of money can mean a significant saving in commission fees.
What’s more, currency rates can fluctuate on a daily basis and therefore the price you would pay for a property in Tenerife on the day your offer for your property purchase in Tenerife is accepted, may differ from the currency rate on the day of completion. This means that it could end up costing you thousands of pounds more than you expected!
We strongly recommend speaking with a currency specialist as early as possible discuss the exchange that they can offer and also the ways in which they can help you to minimise the implications of currency fluctuations and save you serious money on the exchange, often thousands of pounds!
For more information about how to save money on your currency exchange or for details of a recommended currency specialist contact Total Buying Abroad on 01244 478 911 or email us at email@example.com.
Obtaining a mortgage in Tenerife
If you require a mortgage to help you with your property purchase in Tenerife, it’s important to ensure that you know how much you are able to borrow, the options that are available to you and if there are any additional costs associated with obtaining a mortgage in Tenerife. Typically, you will need a deposit of approximately 30 per cent plus enough cash funds to cover the fees and taxes mentioned above.
For more information about your mortgage options in Tenerife contact Total Buying Abroad on 01244 478 911 or at firstname.lastname@example.org.
The process of buying a property in Tenerife
Step one – Find an independent English-Speaking lawyer in Tenerife
It is extremely important that you instruct a lawyer when purchasing a property in Tenerife and, unless you are fluent on Spanish, you should ensure that you instruct an independent English-speaking Spanish lawyer in Tenerife. Your solicitor in Tenerife should also have experience of assisting UK clients with property purchases.
We recommend seeking legal advice prior to commencing your property search so that you can ask any questions you may have before putting in an offer and signing any documentation. It will also help you to budget for legal fees and means you have a lawyer in Tenerife on hand to assist you if you need to move quickly with a property purchase.
By instructing an independent lawyer in Tenerife (i.e. one that is no way connected to the seller) you can be sure that there are no conflicts of interest and that your lawyer is acting in your best interests only.
We strongly recommend that you do not use a lawyer that is recommended by the seller, estate agent or developer.
You lawyer in Tenerife can also act as Power of Attorney, which means they can deal with matters on your behalf when you are not in Tenerife.
Total Buying Abroad can recommend an independent English-speaking lawyer in Tenerife to assist you with your property purchase anywhere on the island of Tenerife.
Step 2 – Get an NIE number
If you’re purchasing a property in Tenerife and you’re not Spanish, you will need to obtain an NIE number. This is essentially a foreigner’s identity number. There are number of ways you can do this: either in person in Tenerife; in person via the Spanish Consulate in the UK or via your lawyer.
Step 3 – Searches and Contracts
Once you have found your perfect property in Tenerife and wish to proceed with purchasing the property, your lawyer will need to undertake all the relevant checks on the property, including carrying out checks at the local land registry, town hall and tax office. They will also make sure that there are no restrictions to using the property as you intend.
Once these checks have been completed and your lawyer is satisfied that there are no problems with the property, an initial purchase contract will be prepared for you to sign. At this stage, typically a non-refundable 10 per cent deposit is paid by the buyer, so it’s crucial to obtain advice from a lawyer in Tenerife before signing a contract or paying a deposit.
Step 4 – Instruct a currency specialist
Before you complete your property purchase it’s advisable to ensure that the funds being transferred are done so through a currency specialist. They will be able to fix the currency rate to help you to minimise the effects of currency fluctuations as well as offer a much better exchange rate than the high street banks. This costs nothing but can save you thousands!
Step 5 – Completion
Once your lawyer in Tenerife has completed all the final checks on the property, they will prepare the final Purchase Deed (Escritura de Compra Venta). You lawyer will then arrange a date to finalise the purchase, at the Notary’s office in Tenerife where all parties are required to sign the deeds, in front of the Notary. The balance of the property price is paid, together with the transfer taxes and you can then be registered as the new owners of your property in Tenerife.
Step 6 – Enjoy!
Aside from setting up your utility bills (which your lawyer will be able to help with by the way!) and moving furniture, you can now enjoy your new property and the sunshine!
If you would like further information about any aspects of buying a property in Tenerife, contact the team at Total Buying Abroad on 01244 478 911 or at email@example.com and one of our friendly representatives will be happy to help.
We can also put you in touch with a recommended English-speaking lawyer in Tenerife, currency specialists, mortgage specialists and estate agents with properties in Tenerife to buy. Our recommended contacts will ensure that your property purchase in Tenerife is as safe, hassle-free and cost-efficient as possible.
Article published: April 26, 2018