Free Promises or Free Guarantees?

Picture this. You’re about to spend thousands of Euros buying a property in a foreign country, maybe even your life savings. You don’t speak the language and you are completely reliant on other people’s advice. Over the years you have read horror stories where people have lost their properties through missing legal documentation, fraud, demolition orders or have not even managed to purchase a property because their deposit has gone missing or the agent has gone bust.

You don’t think that will ever happen to you, but you want to be sure. You have a choice between two estate agents. Which will you choose?

Spain Property Purchase Tax Rises

… but Tenerife stays low

Spain’s government is to raise the VAT rate on new properties purchased from 7% to 8% in 2010.  The cost of purchasing a home in Tenerife is to remain the same.

5 Reasons Why its the Best Time to Buy Tenerife Property

A combination of factors will ensure that demand for property in Tenerife accelerates as summer turns into autumn in Tenerife.  Many bargains have already disappeared from the marketplace, and it looks like the summer will be the best time to grab those that remain because come the autumn buyers will be back in force.

Finding that Needle in the Haystack

Recently we wrote about how to find a bargain area when you buy a property in Tenerife and promised that this month we would write about how to find those elusive individual bargain properties in Tenerife that might be scattered anywhere…

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Amarilla Golf

Background

Part of the municipality of San Miguel de Abona, and lying immediately adjacent to Golf del Sur, Amarilla Golf is a developing area that is a perfect example of Tenerife’s re-branding into a luxury holiday destination. 

La Caleta

Background

Some of the nicest areas on the Canary Islands are the beautiful fishing villages that line the coasts, and La Caleta is probably the most charming of them all.  Located a few hundred metres along the coast from Fañabé with its five star hotels, swanky restaurants and designer shops, La Caleta has borrowed some of this upmarket feel, yet still retains its original fishing village character.  It is perhaps the ideal compromise between the traditional and modern.

Palm Mar

Background

Palm Mar is one of the most exciting new areas in Tenerife.  Located on the sea front between Los Cristianos and Las Galletas, the town is accessed by a road that leads between the Montaña de Guaza and a protected area of natural beauty.  Although there was some development in this area about 30 years ago, expansion stopped.  More recently acquired by one of Spain’s largest developers, Urbis, the area is taking off.

Golf del Sur

Background

Perfect for golfers or non–golfers alike, Tenerife's ocean front resort of Golf Del Sur offers championship golf, beautiful scenery, great bars and restaurants, lively entertainment or simple peace and tranquillity. Golf Del Sur is part of the municipality of San Miguel de Abona and is built around a 27 hole golf course.

Playa de las Américas

Background

Playa de las Américas is the largest resort town in the South of Tenerife, offering a myriad of activities for all ages.  Over the years development and building have merged Las Américas with the older town of Los Cristianos, and together the two form a substantial holiday city. 

Los Cristianos

Background

Once a small, traditional fishing village, Los Cristianos has grown over 40 years to become one of the most popular tourist resorts in the Canary Islands.  At its heart is a bustling port from which ferries, fishing boats, yachts and excursion vessels come and go throughout the day. 

Choosing where to live in Tenerife

Choosing where to live in Tenerife is where any property search should start.  The right area can make so much difference to the type of life you lead in Tenerife, and what you get out of it.

Serious about Selling Property in Tenerife

We’re going all out to ensure that we have the widest portfolio at the best prices for you!

For the last few weeks we have been running a campaign to make it easy for vendors to list their property with us.  Our sales advisors have been visiting numerous complexes in Tenerife and we have been listing some great properties.

Tenerife Reposessions: The cheaper way to buy?

As the recession bites, increasing numbers of home owners in Tenerife are under pressure to pay their mortgages, and in some cases they are fighting a losing battle.  Many foreign buyers are waiting in the wings to snap up these bargain Tenerife reposessions after the banks have taken posession of them, but in the Spanish system it is often better to purchase just before repossession, before additional costs are added. 

Buying to retire

As the year draws to a close, those of us unlucky enough to live in frosty northern European climes start to think of a home in the winter sun.  Our reasons are various, but predictable: the quality of life, the cost of living, crime, short days and long, cold nights all serve to imprison us in homes.  Life goes by and we glue ourselves to our televisions, watching others living and enjoying it.  We stop work, retire and that time which we had hoped would liberate us from responsibility and set us free becomes set in the rhythm of the TV Times.

Moving Currencies

You will normally pay for your property in Euros, although some vendors prefer sterling.  Your bank may be the obvious choice; the rates they offer tend to be relatively expensive.  In recent years, specialist foreign exchange companies have become increasingly user friendly and offer more favourable rates.

The Mortgage

Recent market changes have made it easier than ever to buy a property in Tenerife, despite the economy.  Whereas previously an aspiring buyer could just about scrape together sixty percent of the cost of a property from a mortgage lender, nowadays lenders are putting together financial packages that mean almost anyone can benefit from property investment. 

Legal advice

In these days of DIY culture, many people in the UK successfully conduct their own conveyancing with no problems.  When these same people buy over here, they are often loathe to employ a lawyer.  This can often be a recipe for disaster, because although some transfers can be smooth, it takes a lawyer to deal with anything unusual in a contract.  Often, it takes a lawyer just to spot the unusual thing and question it, when an unqualified agent would blithely skim through the pages and assume everything is correct.

The purchase contract

The purchase contract for a resale property in Tenerife will contain details of the vendor and purchaser, the purchase price and method of payment. It will also confirm that the Escritura de Compraventa (Title Deed) is in the name of the vendor and that this will be passed to the purchaser on completion of the sale. It will also guarantee that the property itself will be transferred free from all encumbrances and rights of third parties and will state who is liable for taxes and costs involved in the transfer. There will also be stipulations regarding penalties for non-fulfilment of the contract.

Legal procedures on buying

All property sales and purchases in Spain must be registered the land registry and the Title Deed (Escritura de Compraventa) must be prepared by a public official called a Notary. This deed is then signed by both the seller and the buyer in the Notary’s presence.

Fees and taxes

There are taxes and two fees payable on all transfers of Tenerife properties. The Notary is entitled to a fee for preparing the Escritura, and there is a further fee for registering the property in the new owner’s name. There is a document tax of 0.75% plus a local tax (I.G.I.C.) which is at present 5% of the official value if you are purchasing a new property from a developer, or a 6.5% transfer tax if you are purchasing a resale property from a private owner.

Under declaring property values

One of the most widely accepted tax dodges has had its day.  If you’re considering buying a property on Tenerife now, or in the future, this chapter may save you thousands of Euros and a great deal of stress.  Up until just a short while ago, the practice of under-declaring the value of a property when it was sold was so common that notaries, lawyers, agents and even the taxman didn’t even raise an eyebrow.  The situation has changed, and the problem is that many estate agents and lawyers are now in a state of denial, not admitting to themselves, let alone their clients, that the golden years of black money property deals are now a thing of the past.  And who will pay the price of their failure to adjust to the new fiscal climate?  You will.  And you will pay through the nose.

NIE Number

Any person wishing to purchase a property or have any other fiscal representation in Spain must obtain a foreigners identification number (Numero de Identificación de Extranjero – N.I.E., or commonly referred to as an NIE number) and should appoint a qualified fiscal representative who is resident in Spain to deal with his or her tax affairs.

Tax retention

Under current legislation in Tenerife it is necessary for 3% of the declared purchase price of a property to be retained by the purchaser, or his representative, and for the money to be paid to the Spanish  tax authorities (Hacienda) within 30 days of signing for title deeds. This is payable whenever the vendor is a non-resident of Spain to ensure that any taxes he may owe to the Spanish Inland Revenue are paid before he disappears into the sunset.

Glossary of Spanish terms

A short Spanish / English dictionary of useful words associated with buying, selling and owning property in Tenerife.

Buying Tenerife Property

Tenerife is a sub-tropical island of huge variety, with landscapes ranging from the snowy peak of mount Teide to the golden beaches of the south, warmed by the sun twelve months of the year.  It is no surprise that so many people choose to invest in this piece of paradise. 

Choosing an estate agent

Buying in Tenerife is a different experience to the UK, and to make it as smooth and stress free as possible, you should take great care about the agent that you choose.    An agent in Tenerife has a much wider ranging responsibility, and in selecting an agent you should ensure that they have the administrative resources to assist you.  Not only is there a language barrier, but things just don’t work in the same way as they do in the UK, so they won’t work in the way you might expect.  There is a minefield of bureaucracy which ranges from registering your tax status to ensuring that services such as electricity and water will be working when you move in.  Many purchasers have a window of a week or two in which to get everything done.  This is an impossible task, and so your agent should represent your interests to ensure that everything is dealt with from the delivery of furniture to the exchange of contracts and dealing with the notary.  Agents vary in their ability and resources to ensure their service levels can cope with your requirements.  Therefore buyers are advised to choose the agent before the property. 

Making sure you are protected

Perhaps it is the warm sun that fries the brains of us northern Europeans, but it seems that many of us seem to throw caution and common sense to the wind when we come to property buying in Tenerife.  We happily slap down thousands of Euros in deposits for properties, without a care for the security of our hard won cash.  We blithely accept a salesman’s patter… after all, he’s a nice chap and we met him by the pool… he’s bound to be telling the truth.  Back home, on familiar ground, we are different people.  But as the temperature rises, so does our gullibility.  Many people have learnt the hard way, that suntan lotion does not provide adequate cover for all eventualities.

Using the Internet

The internet has become an increasingly popular way to search for properties.  From the comfort of your own home, you can search through hundreds of properties from many different websites.  At face value, it seems an excellent way to conduct a property search.  However, the method is far from perfect.

Pre-qualifying for a Mortgage

If you are likely to need a mortgage for the purchase of your property, then the time to think about it is before you actually start your property search.  There’s nothing more disheartening than falling in love with your dream home, only to discover a problem putting together the financial package.  Having a mortgage offer in your hand before you start your search will give you an absolutely clear idea of your budget before you start, and will mean that you can put a serious offer down for a property as soon as you see it, without waiting precious days for a mortgage to be approved, and potentially losing the property to another buyer.

Deciding what to buy

If you have read this far, then you have probably decided that the time has come to finally make your dream come true and buy that property abroad.  So how do you make the experience a pleasure?  After all a home in the sun is an exciting prospect, whether you are looking for somewhere that may eventually be your main residence, or just your own place to spend your holiday.  There is no replacement for a good wishlist.

Investment Potential

Blue skies, blue seas and a blue chip investment!
For a number of reasons, owning a property in Tenerife has a sound commercial basis which augurs well for future stability and despite the occasional pauses and even the odd setback; the price of property and land has always proved to be the ultimate winner as a medium to long term investment.

Fly to Let

A twist on the popular term ‘buy to let’, ‘fly to let’ is the increasingly popular trend of buying an investment property with a view to letting it out.  The ‘fly to let’ investor is no new phenomenon.  People have been doing it here for years, but it is only recently that we have seen a sharp rise in investors who are really serious about renting.  Many have become disenchanted with traditional managed pension plans.  For them foreign property is an important part of their retirement planning.  Anyone can now see that an investment that has strong capital growth, provides an income and also enhances lifestyle is going to be a better bet than the unit trusts and pension plans that have let so many of us down.  The pensions crisis has seen to that.

Buying Off Plan

There has always been an enormous interest in purchasing a property still in construction.  With Tenerife’s moratorium on building, there has been no massive over supply here, as there has been on the mainland.  New construction is mainly concentrated in the areas that are being developed, such as Amarilla Golf or Palm Mar.

How Low can you Go?

To the casual observer, the Tenerife property market at the moment may seem like a placid sea with not much happening, but don’t let this fool you.  Beneath the surface is a seething turmoil of offer and counter offer as bargain hunters and vendors do battle over sale prices.  But for many, the hard fought day ends in disappointment as buyers go home empty handed and sellers settle back to wait for the next offer.   

Web foils Tenerife property buyers

As increasing numbers of Estate Agents close their doors or reduce to skeleton staff, it has become harder than ever for property buyers to find real information about properties for sale in Tenerife.  Upwards of 80% of buyers now use the internet to search for a home, but they are discovering that the web is riddled with websites of companies that are no longer trading or sites that are rarely updated due to staff shortages.  The few remaining companies that continue to maintain updated sites are seeing an increase in users.

A second look at overpriced property in Tenerife

If a property doesn’t sell then there must be something wrong with it.  That statement is always true.  But whereas most buyers are suspicious of a home that has been on the market for some time, worried that there may be problems in location or condition, in fact the most common problem is that the price is simply too high.  Homes that are over priced will often not sell at all, simply because buyers don’t make offers on them.

Lost deposits

Both buyers and sellers in Tenerife need to take particular care about choosing Estate Agents in this uncertain climate.

Basking in the Glow of a Good Investment

If you were investing money today, where would you put it?  That’s a question that many people have been asking in these times where just about every investment seems to be sinking.  Evaluating an investment in these tough times is…. tough!

Tenerife Property: The Time is Now

Articles about property are somewhat depressing at the moment.  The media have become like the haggard witches and soothsayers of old, pointing grizzled fingers into a dark and gloomy future and assuring us all of certain doom.  But as we all know, the media tend to follow what is happening, reporting after the event and if past recessions are anything to go by they will still be doling out dire warnings months after the bottom has been reached.

Property Awards good for buyers and sellers

Tenerife Property Shop has received two International Property Awards at the recent ceremony in London.  But what does that really mean to people who want to buy or sell a property?

Suntan Lotion is NOT Adequate Protection

Peace of mind and security in your Tenerife property purchase

Perhaps it is the warm sun that fries the brains of us northerners, but it seems that many of us seem to throw caution and common sense to the wind when we come to property buying in Tenerife.  We happily slap down thousands of Euros in deposits for properties, without a care for the security of our hard won cash.  We blithely accept a salesman’s patter… after all, he’s a nice chap and we met him by the pool… he’s bound to be telling the truth.  Back home, on familiar ground, we are different people.  But as the temperature rises, so does our gullibility.  Many people have learnt the hard way, that suntan lotion does not provide adequate cover for all eventualities.