Welcome to 2007,and the January edition of our newsletter! Hopefully this year will see all your resolutions come true… you’ll lose weight, win the lottery and buy a property in sunny Tenerife! And that’s the subject of our first article, “Retire, emigrate… or just take a holiday?” The New Year kicks off with some good news for all non-residents from the Spanish tax man - a real rarity! Read about the changes in “Capital Gains Tax Goes Down!!” Our last article is about one of the most popular new features on www.tenerifepropertyshop.com, Perfect Property is a great way to save you time and ensure you never miss out on that ideal new home in the sun!

And of course we’ve got the best of the recent properties on the market. It’s been a very busy month for new instructions and we have taken on some fantastic properties… remember, many of them are with us exclusively, so you won’t find them anywhere else!

A recent informal poll revealed that the third most popular New Year’s resolution is to buy a property in Tenerife. Losing weight and getting a new job came in first and second. Admittedly this poll was very informal, and measured the population of a Tenerife bar – so a slight bias towards Tenerife is possible. But out in the real world, proper statisticians report that the phenomenon of overseas property purchasing is not just limited to the patrons of island drinking establishments.

Half a million Brits own property in Spain. Another 100,000 are planning to move abroad within the next 6 months. Brits invested £12 billion in Spanish property last year. This is predicted to reach £21 billion by 2009. 75,000 properties were purchased, and one in three wants to retire to Spain. Brits own over 42,000 homes in Tenerife. In fact, foreign residents buy 25% of all properties sold in Spain, and take out 20% of all new mortgages. The Association of International Property Professionals (AIPP) estimates that nearly £20 billion has been spent in the international property market by UK buyers in 2006!

The majority of people want to join the other 200,000 Britons and permanently relocate, with 26% viewing Spain as the ideal retirement destination due to the warmer climate, sociable atmosphere and reduced taxes.



So with all these statistics in mind, we’d like to conduct our own little Tenerife focused poll and we’ll publish the results in the next newsletter! So please take a couple of minutes to click some answers to these questions … (ALL ANSWERS ARE ANONYMOUS)


That’s it! Thanks very much for helping out, and make sure you check next month’s newsletter for the results!

It’s rare to be able to report on taxes going down, but from the 1st of January foreign property owners benefit from a huge reduction in capital gains tax.


Back in 2005, the European Commission took the Spanish government to the European Court of Justice over discriminatory capital gains taxes that favour Spanish residents over non-resident EU nationals. Non-residents had to pay capital gains tax of 35%, compared to 15% for residents, which contravened EU agreements governing the free flow of capital and non-discrimination.

Legislation to reduce Capital Gains Tax for non-residents from 35% to 18% (and increase it for residents from 15% to 18%) was approved by the Spanish Senate in October, and came into force from the 1st January 2007. Now everyone, resident or not, has an equal rate of 18% to pay on the capital gains that their property has made. Those who bought their property before the end of 1986 will benefit from an even lower rate.

The new regulations also reduce the withholding provision that non-residents pay when selling property in Spain from 5% to 3% - often referred to as a ‘tax retention’. Since 1995 the law made it necessary for a purchaser of a property to retain 5% of the declared purchase price of a property, and for the money to be paid to the Spanish Inland Revenue within 30 days of signing for title deeds.

This is payable whenever the vendor is a non-resident of Spain and goes towards any taxes he may owe to the Spanish Inland Revenue, before he disappears into the sunset. Because the capital gains tax rate has been lowered, this figure has also gone down. Now, if you purchase a property from a non-resident you will retain 3% of the purchase price for the Spanish tax man.

The responsibility of ensuring that the money is retained and paid to the Spanish Inland Revenue is placed squarely on the shoulders of the purchaser and it is then up to the vendor to instruct his fiscal representative to claim the money back from the Spanish Inland Revenue if tax is not due. If the vendor is a resident of Spain, then there is no need to retain the 3% as the vendor would be expected to be making his own tax returns on a regular basis.

Part of the TENERIFE PROPERTY SHOP service to clients includes liaison with your lawyer for the retention and payment of this money to the Spanish Inland Revenue, together with completion of the relevant forms, so although you need to know about it, you need not be concerned about any hassle or expense. The main point to bear in mind is that if you are a non-resident, when you come to sell your property, the capital gains tax you will need to pay is nearly half of what it used to be!

We’ve had some great feedback about our newly designed 2007 website from many of you, and we’d like to thank you for the compliments. One of the features that has proved the most popular is ‘Perfect Property’. If you haven’t had time to check it out yet, why not take the opportunity now?

Perfect Property is a timesaving tool that will ensure you don’t miss out on that ideal property when it comes along. All you have to do is fill in a very short form describing your perfect property.



The minute a property matching your criteria is added, you’ll be sent an email alert, and your perfect property won’t slip through your fingers. It’s a simple way to keep on top of new properties that are added to the site and it means that you won’t need to keep checking back to see what’s new.

When you receive an email alert, just log back on to the Perfect Property page, and if you like it, you can add it to your Personal Portfolio. If it’s not exactly what you’re looking for, all properties on the Perfect Property page will clear after each visit, so you’re guaranteed only to see the newest properties that match.

Have a go and see what you think! And remember, if you have any comments, good or bad, we’d love to hear from you because we’re always trying to improve the site and make it as useful as possible for you.