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Taxes

Tenerife apartments, Property Managements Tenerife.

Unfortunately, nobody can avoid paying Taxes and now you have found your ideal property and want to go ahead and purchase the thought of complicated Taxes and additional costs can be daunting. Below we have provided a brief description of Taxes involved which are attached to property purchase for guideline purposes.

There are two Taxes payable when dealing with Spanish property. A fee is payable to the Notary for preparing the “Escritura” (Deed) and the second fee is that payable for registering the property into the new owners name.

Also payable is a transfer tax which at the moment (January 2006) is 5% if the property you purchase is a new development (1st Deed) or 6.5% if you are purchasing a re-sale property via a private owner.

Plus Valia. This is the Spanish equivalent known as Capital Gains Tax. This is the tax payable on the increase value of the property which is at various rates depending on the annual increase in value from the previous sale.

Under Spanish Law it is usual that the Seller is responsible for paying the Plus Valia but in practice here in Tenerife all taxes and fees are payable by the Purchaser in the case of transfer of property. Fees and taxes are payable soon after the signature of the “Escritura” (Deed) apart from the Plus Valia which is often demanded later in which case sometimes the Seller may not be found. The Plus Valia is a charge made against the property and not the individual, meaning, that if the Seller fails to pay in any event, the Purchase will eventually be liable to pay this tax.

If you allow calculation of fees around 9% to 11% of the purchase price depending on whether you purchase with cash or a mortgage you will not be surprised when the taxes are displayed.

Another cost for consideration is that of Legal Fees involved in a property purchase. A Solicitor/Lawyer´s fees will vary greatly depending on which Solicitor you choose and will depend on the amount of work and time involved in the procedure. Be aware, that the final bill may not always what you were initially advised and could be thousands more!! As Registered Chartered Estate Agents we here at Wady Properties are authorised and qualified to carry out all legal procedures in relation to property purchase and transfer including legal searches, debt searches and legal registration of property and will charge you a one off nominal fee for this service. Included in this service we provide you with total peace of mind, comfort and the security that you would expect from initially helping you find the right property for you to changing over the electric and water metres, community fees, IBI annual tax (equivalent Council Tax) and bank account and NIE applications.

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Note: The community fees stated in the property descriptions are estimations only.