The Process of Buying Property in Tenerife

There may be a number of reasons why you have decided to purchase a property in Tenerife – Retirement, Investment for Rentals, Holiday Home or Relocating to live permanently in Tenerife. Everyone has different criteria in what they want in a property and the location of the property. If you are buying a property for rentals you may be looking for property in a beach location probably with a swimming pool and with plenty of shops and restaurants close by, for retirement you could be looking in a more peaceful area away from holidaymakers. If you want a holiday home you could be searching for complexes with pools and where maintenance is carried out for you. Whatever you are searching for we are here to listen to you and help you find your ideal property.

Once you have decided on the property in Tenerife that you wish to buy the first thing that you need to do is to make an offer for the property through the Estate Agents. Before you make an offer for the property you need to have your financing in place. No vendor can take your offer seriously if you are not in a position to buy, therefore if you are unable to follow up your offer by paying a deposit and signing a private purchase contract on acceptance of the offer there is little point in actually making the offer.

Once your offer has been accepted you will be expected to sign a private purchase contract and pay a 10% deposit to secure the property. If you do not have access to the full deposit in Tenerife  we can accept a €3000 deposit on the condition that the balance is paid with 10 days. We supply you with a Spanish Contract and an English translation.

It is most important that you instruct a solicitor in Tenerife to assist you in the purchase of your property that can carry out searches on the property and ensure that there are no outstanding debts or mortgages on the property, your solicitor will also check that utility bills, community charges etc are all paid up to date. It is important to check for outstanding debts as if they are not paid before completion they will become your debts. If you are unable to be in Tenerife for the completion of the purchase you can give your solicitor Power of Attorney so he can sign at Notary on your behalf.

When you are purchasing property in Tenerife you must also be aware of other costs involved and budget for them.  You should allow a maximum of 10% of the purchase price to cover these costs, your solicitor will advise you of the exact amount but briefly these costs are –

Plus Valia which is a tax on the increased value in the land the property is built on. This tax is actually the responsibility of the seller but sometimes the purchaser ends up paying this. You should consult your solicitor on this point.

Land Registry Costs

Notary Fees

5% I.G.I.C. plus stamp duty (New Build Property)

6% ITP Tax (when purchasing a resale property)

Completion normally takes place 4 to 6 weeks later at the offices of the local Notary, both the Seller and the Purchaser have to be present unless they have appointed representatives. You may be asked to bring a number of Bank Cheques making up the final purchase price. These cheques could be made payable to various people such as the sellers mortgage company to pay off the mortgage or the Hacienda if the seller a non resident. The Non Resident Seller must pay 3% retention of the sales price against Capital Gains tax that may be owed. If the Seller is Resident in Spain then there will be no retention to pay.