One-off taxes and expenses when buying a property in Tenerife

Before you start looking for real estate, you should clearly understand what costs associated with buying a property in Tenerife await you. Since, if you do not prepare in advance for the payment of taxes, you can find yourself with sanctions. There are different costs and fees that are equally important to consider. The Canary Islands have their own specific taxes on the purchase of real estate, which are much lower than on the mainland. For the sake of clarity, we'll separate the one-time taxes and expenses into two cases: buying a new home and buying a second home.

 

 

Buying a new house:

 

1. IGIC (according to our VAT) - is 7% of the cost of housing

 

2. Documented Legal Acts (legal deed tax) - notarial documents are subject to this tax. This tax includes a fixed rate and a variable rate. A fixed rate is applied to documents that must be drawn up on stamped paper. A variable rate is imposed on acts in which the object is a sum of money or a valuable thing that must be registered in the Real Estate, Commercial or Industrial Property Registry. This tax on the documentary execution of legal acts ranges between 0.75% and 1% of the value indicated in the deed of sale.

 

3. Notary (Notary fees) - from 600 to 1500 euros.

 

4. Property Registry (Registro de la Propiedad) - payment for Registry services to register your property in the General Property Registry and enter into the property registry. It is jn €300 to €2100 depending on the value of the property.

 

5. Management expenses (documentation costs) - normally they range between 250 and 500 euros. It includes the payment process of previous taxes in the corresponding institutions. By bank transfer, bank check or cash, you leave an amount (approximately calculated) to pay taxes and expenses to the administrator at the notary. Registration takes up to two months. After that, you will receive the original bill of sale and a refund of the amount remaining after all taxes and fees are paid, if the remaining amount is greater than the actual amount of taxes and fees.

 

6. Bank commission for preparing a bank check from 0.4% of the amount of the check, minimum €150. The most reliable and secure form of payment for a real estate transaction.

 

7. N.I.E. - Obtaining a foreigner number from the police. The bank pays a commission of 10 euros per person. Our company does not charge a separate fee for obtaining a foreign number from our clients.

 

8. Nota Simple (Extract from the registry) - this document is issued by the Land Registry and allows you to obtain information about the owners, description, encumbrances, area, etc. The receipt and presentation of this document for the first time, after reissue, our company assumes all responsibility. Subsequently, the cost of obtaining an extract will be €15.

 

9. Home insurance: it is mandatory, especially in the case of renting a home, entering into an agreement through a bank allows you to save on the commission of a bank check, as well as reduce the mortgage rate. From €150 per year. Our company Nous Property offers Allianz insurance at lower prices than banks.

 

Total: up to 8.5% - taxes and expenses for the purchase of a new home without a mortgage

 

 

Buying a second-hand home

 

1. ITP (Patrimonial Transfer Tax) - is 6.5% of the cost

 

2. Notary (Notary fees) - from 600 to 1500 euros.

 

3. Property Registry (Property Registry) - payment for Registry services for the registration of your property in the General Property Registry and registration in the Property Registry. It is froom €300 to €2100 depending on the value of the property.

 

4. Management expenses (documentation costs) - normally they range between 200 and 500 euros. It includes the payment process of previous taxes in the corresponding institutions. By bank transfer, bank check or cash, you leave an amount (approximately calculated) to pay taxes and expenses to the administrator at the notary. Registration takes up to 2 months. After that, you will receive the original bill of sale and a refund of the amount remaining after all taxes and fees are paid, if the remaining amount is greater than the actual amount of taxes and fees.

 

5. N.I.E. - Obtain a foreigner number at the police station. The bank pays a commission of 10 euros per person. Our company does not charge a separate fee for obtaining a foreign number from our clients.

 

6. Bank commission for preparing a bank check from 0.4% of the amount of the check, minimum €150. The most reliable and secure form of payment for a real estate transaction.

 

7. Nota Simple (Extract from the Registry): this document is issued by the Property Registry and allows you to obtain information about the owners

 

8. Home insurance - it is mandatory, especially in the case of rental housing, closing a contract through a bank allows you to save on the commission of a bank check. From €150 per year. Our company Nous Property provides Allianz insurance than the banks.

 

With the registration of a mortgage, the amount of expenses increases:

 

But! Law 5/2019, of March 15, modifies the mortgage legislation, clearly indicating which mortgage expenses are borne by the banks and which are borne by the client. Of all the mortgage costs below, under the new law, only the discovery fee and real estate appraisal fall on the client's side. At the same time, the client is not obliged to accept the bank's assessment and can order it himself from any company with rejuvenation.

 

1. Arrangement commission - from 0.4% to 1.5% of the amount of the mortgage

 

2. Documented Legal Acts (legal deed tax) - notarial documents are subject to this tax. This tax includes a fixed rate and a variable rate. A fixed rate is applied to documents that must be drawn up on stamped paper. A variable rate is imposed on acts in which the object is a sum of money or a valuable thing that must be registered in the Real Estate, Commercial or Industrial Property Registry. This tax on the documentation of legal acts ranges between 0.75% and 1% of the amount of the mortgage.

 

3. Life insurance: the amount depends on the age, the amount of the mortgage and other factors. Not all banks are required to complete it. In the event of the death of the insured, the insurance covers the mortgage.

 

4. Property Registry (Registro de la Propiedad) - payment for Registry services to register your property in the General Property Registry and enter into the property registry. It is at €300 to €2100 depending on the value of the property.

 

5. Housing appraisal, the cost of the service is from €300 to €450. Made by a company authorized by the bank.

 

6. Notarial deed of mortgage from 600 euros.