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Legal The Advantages of living in Tenerife. There are many advantages for people from the UK to buy property in Tenerife. The all year summer-like weather is the obvious attraction, but Tenerife exclusively offers a great deal to almost everyone, whether it’s the lower cost of living, the beautiful scenery, the well developed infrastructure, the sheer variety of property or just the low key lifestyle. Growing numbers of people are now exchanging their dreary lifestyle back home for the beautiful sub-tropical climate enjoyed here. With confidence both young and old are choosing to settle on Tenerife, particularly in the South around Playa de las Americas. However, there are many subtle differences in the way property is transacted in Spain and its islands and it is always advisable to not only research the location but also to be aware of the legal differences if buying property in any foreign country. How is Property sold on Tenerife? Most property is sold, as in the U.K., through estate agents, and might be offered through a number of agents. Most people today begin by searching for properties on agent’s websites. This will give the purchaser an idea of the value of properties in different areas. The prospective purchaser can then visit the property in the same way as the U.K. with the agent’s representative, and if you are interested in purchasing, make an offer to the agent. Generally, only a minimum of negotiation takes place (unless the property has been for sale for a long time). It is very common in Tenerife for properties to be sold furnished. There is no formal survey system, but if any renovations are required a builder should be consulted first. If it is a new property it is worth looking at other properties the developer has already completed. If the property is on a particularly steep incline it would be worth getting a structural engineers report. Once you are sure you are going to go ahead with the purchase it is advisable to apply for an NIE number which your agent or lawyer will assist you with. This will make connecting utilities and so on that much quicker once completion has taken place. The procedure for purchasing. You must budget for between 8 - 10% costs on top of the purchase price. This will be a lower figure than if purchased on the mainland since certain taxes on Tenerife are lower. If your offer is accepted, you will be asked to pay a deposit, normally of 10%, into a client account. It is wise at this point to appoint an English speaking lawyer who is independent of the agent. The cost of a lawyer locally should be about 1500€. You can place your deposit with either your agent or your lawyer. After you pay the 10%. Your lawyer should immediately apply for a “Nota Simple” from the local Town Hall. This is a document which reveals any charges, mortgages or embargos on the property. IN SPAIN, ANY MORTGAGES OR CHARGES OUTSTANDING WHEN YOU BUY A PROPERTY BECOME YOURS! Assuming all is well, the agent or the lawyer will draw up the “compraventa” (purchase and sale agreement) and this needs to be signed by you, and the sellers as soon as possible. Only Spanish language contracts are valid in law, but most agents or lawyers will provide a side by side translation in English. Make sure you are clear about what you are signing. If you fail to complete the transaction in the agreed time, you may lose all of your deposit, but also if the vendor backs out compensation will be payable to you. The Completion. Around four to six weeks later, the transaction will be completed at the offices of a local Notary. The Notary checks and confirms the terms and conditions of the transaction. It is required by law that the purchaser(s) and the vendor(s) or their nominated representatives, are present. If it is not possible to attend, you need to grant a power of attorney to the person (lawyer, agent, friend etc) representing you. You will be asked for a number of banker’s drafts (guaranteed cheques) to total up to the agreed purchase price which your lawyer may do on your behalf. If the seller is a non-resident, 3% of the price will be paid directly by you to the tax authorities as non-resident sellers must pay this then satisfy the hacienda (taxman) that they do not owe any tax, before having it refunded. Everything else is paid directly to the vendor by banker’s draft and will probably be actioned by the company you use to exchange GB pounds to Euros. Additional costs you have to pay. Your lawyer will also need to have sufficient funds from you to cover taxes and costs arising from the transaction as follows. Transmission tax = 6.5% of the value of the transaction (for resale properties). Having got through all this, you should now be the proud owner of your dream home in the sun, where council tax is a fraction of U.K. rates. If you live in a community, such as an apartment development, you will have to pay community fees (averaging around 50€ per month) to maintain the pool, take care of the gardens, lifts and other communal resources. Electricity and water is metered at about half the cost of the U.K. It is also advisable to draw up a will. Your lawyer will be happy to assist you in this and the charges are very low and it can spare your family a lot of problems if anything untoward happens. Now relax, learn some Spanish, remember to drive on the right and enjoy your time in one the most wonderful places on earth |
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