Su Casa Estate Agent - Tenerife - Buyers information

Peace of mind while buying property in Tenerife
Su Casa will help you:

. To find the right property
. With advice on all expenses you will incur
. To check out all planning matters, permissions and projects
. To carry out all required searches
. With a conveyance service - contract to completion
. To find the "right" mortgage for you
. To arrange a Spanish Notary
. To organize and supervise payments and completion
. To advise on taxes, registration and payment of fees
. To arrange payment by your bank for taxes, bills etc
. To advice you on making a will

FOR BUYERS: DETAILED INFORMATION

The Private Contract
The Private Contract is an important document standing on its own, and not as part of the Title Deed, and maintains its own conditions. Therefore it is important to know and to understand what these conditions are, before you proceed with the purchase! The Private Contract is the first stage in property ownership. It is usually rather short, merely containing details of the seller and the purchaser, a legal description of the property, the purchase price, the form of payment, the date of completion, the date of possession etc. Once it has been signed by both sides and the deposit has been paid (usually a 10% of the main contract), it is binding. This means that the purchasers are committed to pay the balance of the purchase price, and the seller is committed to transfer the ownership of the property. The time between the signing of the Private Contract and the Title Deed (the completion of the purchase) may vary. If the villa or flat has been physically constructed and both sides are ready with all the documents and monies, completion can take place within a matter of days by exchange of contracts. However, if a new building which has not yet been constructed or which is under construction has been purchased, completion will take place when the Title Deed is signed before the Notary, and when the keys are handed over by the developer, and consequently may be many months away.

Mortgages.
We can deal with any legal matter related to the mortgage you wish to obtain to finance the purchase.

Spanish Notary
He is the Spanish official that will be present at the signing of the Title Deed (the transfer of ownership deed). In Spain the transfer of legal ownership of a property on completion of the purchase must take place in a Notary's office, in the area where the property is being purchased. The Notary is responsible for ensuring that the contract (the Agreement between the parties) is turned into a public contract by preparation of the Title Deed, and its registration in the property register of Spain. He is a lawyer who has taken special examinations to qualify for this position. Before preparing the Title Deed the Notary will affirm that the purchaser receives the right property and that the purchase price has been paid to the seller. Only this person can witness the signing of the Title Deed and then arrange for it to be registered in the local deed register in the name of the new owner.

Payment and Completion
Get the purchase price ready and make the last searches before completion (i.e. the signing of the Title Deed) before the Notary. The purchase money will have to be paid before or at the signing of the Title Deed.
Taxes, registration and payment of fees The Title Deed should be taken to the Property Register as soon as possible, to avoid fraud. When you do this a number of taxes will have to be paid before it can be registered. Now the property is yours! Once the Title Deed returns from the Registry bearing the stamps, the property is officially yours and the Registry protects your ownership against any other person.
Checks, payment of rates and taxes Just as in Britain, the local authorities will levy the taxes on the property. Other central government taxes will have to be paid annually as well. Although they are not usually very high, it is most important that you keep informed and do not forget to pay on time. It is possible to give your bank a standing order for these payments.

Paying of Bills
The bills for the supply of water, electricity etc will have to be paid regularly. If you have bought a flat or a house in a private development, you will probably have to pay maintenance charges and community fees*.

Plus Valia Tax
Just as the property transfer taxes (IGIC and Real Rights as referred to earlier), a value added tax on the property may be paid, known as Plus Valia. This is based upon the increase of value of property, recorded in the Town Hall's index value of the price per square metre of land.
It is important to know that even if the last sale of the property was recent, and therefore the value did not increase in the official index (which is changed every 2 to 3 years by the relevant local authority), a Plus Valia payment of up to 10% of the tax charged on the last sale may nevertheless be demanded, which might be paid up to a maximum of the last 20 years.

Withholding tax
Anyone purchasing a property from a person or company that does not have its residence in Spain, should withhold a 5% of the purchase price. This sum has to be paid to the tax authorities on account of any liability of the sellers for Capital Gains tax. This does not apply in certain circumstances.

IBI (Tax on Real Estate)
Urban taxes or I.B.I. have to be paid every year (one payment) between the1st of May and the 15th July. This is payable in addition to any community charges, and they depend on the condition, size and age of the property. The owner is responsible even if he does not receive a rate demand; it is his responsibility as well to find out the exact amount of the tax and to pay it between the dates stated above. Failure to do so will make you liable for a 20% penalty.

In order to avoid this penalty it would be wise to set up a direct debit. This means filling out a form, authorising that the demands for the tax are made directly to your bank, thereby giving you peace of mind knowing that you will never be in arrears. Not paying the rates may result in legal proceedings, and you might lose some or even all of your goods or property.