Buying property in Tenerife

Having chosen your ideal property in Tenerife, obviously some form of payment has to be made before you can start moving in your collection of Burt Bacharach LPs and putting flip-flops marks all over the sofa.

Commitments
How much deposit needs to be put down depends on the type of property you’re looking to buy. Generally, for a resale property 10 per cent is requested up front, increasing to anything up to 25 per cent if you’re buying a new property in the Canary Islands.

Contracts
Contracts then need to be drawn up clarifying the ‘who, what, when and how’ of the agreement such as the completion date and method of payment.

Checks
Before the deeds can be handed over, all the tax and utility receipts need to be checked to see that there are no outstanding debts remaining on the property.

Costs
In addition to the sale price, bear in mind that you, the purchaser, will also have to pay approximately 10 per cent of the new declared value for a resale property or approximately six per cent if buying a new property in Tenerife.
This is made up of the following taxes and fees;
• 6% ITP (Impuesto sobre Transmisiones Patrimoniales) when buying resale; 5% ITP plus 0.5% stamp duty for new   properties
• notary fees
• property registration fee
• plus valia (a percentage of the increase in the value of the land it’s build on)
• if you buy in the name of a company, you are also liable for IGIC, the Canarian equivalent of VAT.

Mortgages
You’ll be pleased to hear that it’s reasonably straightforward to apply for and obtain a mortgage on Tenerife property. Non-residents can get up to 60 per cent of the valuation price. As always though, there are costs involved;
• approximately €240 for a property valuation
• 1% mortgage opening commission
• insurance – varying from €120-240 per year
• a fee for the Notary and registration of the mortgage
Provided you submit the requested financial information, which is very straightforward, the mortgage can be effective within 10 to 15 working days.