The procedure for buying a property in Tenerife
Contract and deposit
You have chosen the property you like. Then we check the property for legal purity.
We check whether the property has any debts and whether the seller is the actual owner of the property or has a power of attorney from the owner for the right to sell.
Once you have chosen and decided to buy a property, a private reservation contract (contrato de arras) is usually signed, which is the first legal document to be signed in the buying process. Once this contract has been signed and a deposit has been paid (usually 10% of the purchase price), the seller must remove the property from the market and freeze the agreed purchase price. This gives you the guarantee that your chosen home will be removed from the market until you are ready to complete the transaction with the notary and the house will not be sold to anyone else. We will prepare the reservation agreement and we will accompany you during the transaction, including the handover from the notary and ensuring that the property is entered in your name in the Spanish Land Registry.
COSTS OF BUYING PROPERTY IN TENERIFE
The buyer must be prepared to cover the following costs:
— 6.5% tax on purchase and sale (from the declared price of the property to the notary)
— notary services (depending on the transaction, usually from 400-700 euros)
- registration fees at the Spanish land registry (around 300-600 euros).
Payment deadline is 30 days after the transaction.
In some cases, the cost may be split between the property and the cost of the furniture.
FOR THE PROPERTY OWNER.
As a property owner in Tenerife you will incur the following costs:
— IBI (annual property tax varies depending on the property and area from 50 euros to more than 1000 euros for villas)
— Utilities: electricity, water, and sometimes gas (depending on consumption)
- waste and sewage collection (usually in the form of quarterly deductions of 25 euros)
- general fees (if the property is located within the community).
Is it necessary to have a bank account in Spain to buy property?
There is no law requiring the owner to have a bank account in Spain. Utility payments can be made from a bank account in any country. However, when purchasing from a notary, most sellers will only accept a bank-approved cheque issued by a Spanish bank. Therefore, you will most likely need a bank account in Spain.
In case of a problem opening a bank account in Spain, the transaction can be made through our agency deposit account.
Is it possible to get a mortgage in the Canary Islands?
Banks usually provide up to 60% to non-residents of Spain. Please contact us for contact details of banks that can assist you in this matter.
Do you need to be in Tenerife to buy property?
We recommend that you view and familiarise yourself with the property before booking. However, you do not need to be in Spain to sign a private booking contract. Upon your agreement, we will prepare a contract, send it to you by email; you will print it out, sign it and send it to us. You will then need proof of bank transfer of the agreed deposit.
Do you need a lawyer to buy property in Tenerife?
You can contact a lawyer if you want. Although it is not necessary. Our agency and notary will prepare all the documents.
Is it possible to trade on the price of real estate or deposit?
Typically, the final purchase price, deposit and other terms of the purchase (such as the date of signing at the notary) can be negotiated, but this depends on the flexibility of the owner.
HOW TO BUY PROPERTY IN TENERIFE?
If you are a citizen of the European Union, you can buy a property in Tenerife without any restrictions. For the notary closing, the buyer must have a valid passport or identity card and NIE (Spanish tax number for foreigners). If you buy from us, our agency will help you with the NIE procedure.
IS IT POSSIBLE TO BECOME A RESIDENT OF TENERIFE?
Buying a property in Tenerife does not automatically give you residency in Spain. There are additional requirements. European citizens will be asked to provide valid health insurance and income (or a minimum deposit of less than €6,000 in a Spanish bank). In addition, for non-European citizens, Spain has a Golden Visa program. The Golden Visa allows you to obtain a 5-year Schengen visa and Spanish residency if you buy a property in Tenerife worth more than €500,000.
