Tenerife property - Buying property in Tenerife FAQ

If you are considering buying property in Tenerife you may have a few questions about the procedure. You´ll find answers to many of the most frequently asked questions in our FAQ list below.

What additional taxes and costs will I pay when buying a property?
You need to allow approximately 8% of the purchase price for the fees and costs of acquiring the property. Note that this 8% is additional to the purchase price. This 8% covers the conveyance costs, which include the 5 or 6% (it is 5% in the case of a new property) of the purchase price payable to the Land Registry, added value tax, Notary fees and other associated professional fees and duties for drawing up of new title deeds (the 'Escritura'). Any moneys remaining will be returned to you, along with all the various receipts and invoices for the work involved.

What expenses do I have when I am an owner?
You will have to pay monthly or quarterly community fees to an owners association that looks after the general running of the complex. The community fees cover insurance on the community itself and often the association will have a block policy to cover buildings. Opting into this policy is likely to be cheap because of the number of people covered. It is not, however, compulsory and independent insurance can be taken out if so desired.

Yearly expenses would be the " IBI " (Impuesto sobre Bienes Inmuebles-local tax), which is very small compared with other countries, and a wealth tax which is also low, being at present only 0.2% of the value of assets held in Spain.

Legal procedures
All property transfers in Spain are registered and the title deeds (Escritura) prepared by a Notary (Notario). Both seller and buyer sign the deeds in his presence. He ensures that all paperwork has been correctly drawn up, witnesses the signing of the Escritura and collects the fees and taxes. The Notario presents the Escritura to the land registry office where the details of the new owners are recorded. Those who may have purchased on a short visit to Tenerife and do not wish to return simply for the signing of the deeds, may appoint a representative by "power of attorney" to appear before the Notario and sign on their behalf.

Identification Number (N.I.E.)
Everyone wishing to do any financial dealings in Spain requires an identification number ( N.I.E. ) and a property purchaser who is non-resident in Spain must also obtain a Certificate of Non-Residency, these items must be produced for the Notario when signing the escritura. In addition, non-residents must appoint a financial representative who is resident in Spain to deal with their tax affairs.

There will obviously be many other questions you will wish to ask, such as: should I buy in my name or in a company name? Can I buy anonymously? What if I want to resell my property? At Centro Inmobiliario we will be happy to answer these and any other queries you may have, so please feel free to contact us with your questions and enquiries.

Investing in a property on a new development in Tenerife - visit www.palm-mar.com

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