If you thought the Canary Islands (especially Tenerife) were home to drunken British tourists and tacky resorts, think again. In fact this beautiful island has so much more to offer than cheap tourism than is initially believed.
Aside from the fact that Tenerife sports an all year round excellent climate at around 22 degrees Celsius, you can also eat your heart out at the many new, hip restaurants and cafes as well as explore the many breathtaking scenic aspects of the island.
From a day trip to the highest mountain in Spain, Mount Teide to tasting some of the islands home grown wine, whale watching or shopping till you drop, Tenerife has a lot to offer to expat buyers who are looking to acquire a new home in the Canaries.
Where in the past Tenerife was well known to British tourists as a quick ‘el cheapo holiday destination, today it is establishing itself as a new hip investors heaven. Especially the north of the island offers a new kind of life away from the throngs of tourism while the south is still home to the noisy surrounds of British style pubs and tacky resort towns.
If you have fallen in love with Tenerife on your trip and consider a second home away from home, then the following information will guide you in the right direction to get you started as a new property owner.
Taxes and Costs
In addition to the property’s purchase price you need to allow for an extra 8% in taxes and fees when you buy. These 8% cover the conveyance costs, Notary fees , added value tax, and other associated professional fees and duties for the drawing up of the “Escritura” (the title deeds). If there is surplus money paid by you it will be returned to you with detailed invoices.
Property Owner Expenses
When buying property in Tenerife you are expected to pay quarterly or monthly community fees to a “owners association”. This association is responsible to look after the complex and running it. These fees cover the expenses of cover insurance on the community itself, and certain policies for buildings. Those however are not compulsory and can be taken independently of the community association if so desired.
Additionally there are also yearly expenses called Impuesto sobre Bienes Inmuebles (IBI) which is the local ground tax. This tax is actually quite low compared to many other places and is less than 1% of the total value of your assets held in Spain.
Before you can engage in any financial dealings in Spain you will be required to acquire a Spanish identification number (N.I.E.). Further to this, if you intend to reside outside Spain after your investment purchase you will need to obtain a Certificate of Non-Residency.
Both of these will need to be shown to your Lawyer when you sign your title deeds documents. If you live outside Spain you also must appoint a financial representative who is a resident of Spain to deal with your tax affairs.
Legal Mambo Jumbo
To give you peace of mind, property transfers in Spain are registered. All title deeds are overseen by a Notary and he is also p[resent when you and the seller of the property sign the contract. This is important to assure all things are done legally and paperwork has been correctly drawn up to avoid excess costs or even worse loss of property.
Your Notary will also collect the applicable fees and taxes from you. He will then present the title deeds to the land registry office where the details of the new owner(s) – you – are recorded. If you happen to buy while on holiday in Tenerife without intending to return to the island you can also appoint a representative by means of “power of attorney”. This person will then act on your behalf and engage with the Notary.
Making the Move into the Sun
Buying property in Tenerife might just as well be the solution to help you move away from cold England to a more sunnier climate. You can buy a 1-bedroom apartment for less than 100,000 Euro. Naturally there are much choices and new boutique hotels offer every type of luxury you can think off to please the ficklest of holiday goer.
If you have millions to spare, then you will be pleased to also find a good selection of suitable properties on Tenerife.