Procedure of buying property
Golden beaches, clean environment, breathtaking volcanic landscapes and guaranteed year-round sunshine; plus friendly local residents, bargain properties, strong investment potential and high standard of living – the Canary Islands have it all. Long-established as a holiday destination, Tenerife has always been popular with travellers looking for a holiday with guaranteed sun. Nowadays, it is one of the world’s most popular tourist destinations, which makes it an obvious and attractive place to invest in property.
If you are tired of city stress, Tenerife is the best place for you. Once you are there, you will wish to stay forever and your decision to buy a property will be instant. The Canary Islands is a place where peace and tranquillity reign.
Buying Property in Tenerife doesn’t only mean a new house; it’s an investment in health, longevity and personal and family safety. Our specialists will take fantastic care to provide you with great service and make your dreams come true.
The process of buying a house in any country can be complicated and confusing. When you are purchasing a property abroad it’s even more so. However, with the right professionals to assist you along the way, it can be effortless. For information of the legal stages and purchasing process in Tenerife, see the below list:
Step 1. Where to start
The first step to buying property – decide on the type of property you want and find the right one. Our company has a large number of properties for sale and we can help you to find a home (or apartment) to suite your taste and budget.
Are foreigners allowed to buy property in Spain? Yes. There are no restrictions on buying property in Spain, whether it’s commercial, residential or land. In fact, Spain encourages investment by foreigners, both resident and non-resident.
Do you need a visa to enter Spain? Buy a property, get a visa! If you are from a non-EU country you will require a visa for staying in Spain (EU citizens don’t need a visa to reside in Spain). Spain currently offers a visa program for property owners. If you have a property in Spain you can obtain permission to stay in Spain for up to180 days of the year. If you invest more than €500,000 in Spanish property, buying one or more homes, you will be automatically eligible for a residency visa. This is not a work permit, but it will allow you to live in the country.
As you don’t need to be a resident to purchase a property, it is possible to buy a home before you arrive and directly move in. However, this naturally comes with certain risks and we strongly recommend that you view the property and don’t cut corners on the process. Our company offers you viewing trips to Tenerife. Please ask our experts for more information.
Important to know!
Apartments in Spain are measured by bedrooms and not by total number of dwellings. For example, ‘2-bedroom apartments’ have a guest room, 2 bedrooms, kitchen and one/two bathrooms. In other words, it’s an analogue of ‘3-room apartment’ in Russia or Baltic countries.
Step 2. Obtain your NIE and open a bank account
During the process of buying a house in Tenerife you will need to obtain an NIE if you don’t already have one. The Número de Identificación de Extranjeros means that you are registered with the Spanish Tax Authorities. It must be applied for personally at the National Police Station. If you cannot be in Tenerife when you need to apply for the NIE then one can be obtained on your behalf through a Power of Attorney (Poder Notarial). You can nominate a trusted individual to represent you in certain transactions and you can sign the power of attorney in the presence of a notary. This means that the purchasing process can still go ahead without you being there.
Once you have decided to buy your property you have to open your own bank account in Spain. You will need an account to transfer money for the purchase of your new property in Tenerife. Also it will be required in order to pay your utility bills. At this stage you should also make arrangements for a debit card and internet banking which is a real bonus for non-residents. Documents required: confirmation of source of income and a letter from your bank. Bank account opening is free. Banking fee is about €30 per year depending on the bank and general conditions of the contract. For more information, ask for our specialists. We provide you with the best way to breeze past all the legal wrangling. We save your time and money!
Step 3. Sign the contract
The next in our series of steps to buying a house in Tenerife is when our solicitor gives you the green light and you can sign the private contract. But don´t forget a preliminary check on the property. With a document from the Property Registry (Nota informativa del Registro de la Propiedad), you’ll find out if the property is free of debt, if it really belongs to the seller, and if the description of the property matches what the buyer has been told (to avoid surprises about missing square metres). When you sign the contract you will pay a deposit (10% of the purchase price). If you, as purchaser, break the contract you will lose your deposit. If the vendor is the one who defaults then you are entitled to twice the amount of your deposit as compensation by law. Then you have to sign the Title Deeds (Escritura Publica). The Title Deeds need to be signed at the Notary office. At this stage you will also make the final payment and receive the keys. When you sign the Title Deeds you will not be given the original document immediately but an authorised version known as the Copia Simple. If you have a mortgage, the bank keeps the original until the loan is cleared. Once the Title Deeds have been signed then the property will be registered at the Land Registry and the utility companies should be informed of the change of name. Fidus Factum can assist you with locating financial assistance via the numerous financial institutions here in Tenerife. You will enjoy your new home very soon!
Legal costs and taxes of buying property in Tenerife
- Value-Added Tax of the Canary Islands (IGIC). It is the tax in the Canary Islands, the rate to apply to purchasing prices.
– For resale properties – 6, 5%
– For a new-building – 7% +1% (stamp duty)
- Notary fees: It depends on the purchasing price and size of the Title Deeds. Generally it is about €600.
- Land Registry fees about €400.
Example: Buying a resale property
Purchasing Price: €150.000
IGIC 6.5% €9.750
Notary and land registry fees
(approximately) €600 + €400
After sales service of our company €500
Conclusion supply contracts: electricity, garbage collection,
Water and etc. (approximately) €200
Total Cost: €161.450
The cost of owning property in Tenerife*
I.B.I. Local Tenerife council rate – from €200 to €400 per year.
Non-resident property owners tax (form 210) – 24% from 1, 1-2% cadastral value for citizens of non-EU countries and 19% from 1, 1-2% for EU citizens.
Community Fees – €50 – €300 per month depending on the size of the development and the services offered – complex swimming pool, external lighting, community gardens, security, reception, etc.
Water, electricity, garbage collection – €70 – €500 per month depending on consumption.
*The amounts of taxes and fees are approximate
Book a free consultation in the Fides Factum