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?

Bank Repossessions in Tenerife

Many bargain hunters are aware of our links with banks and ask us about bank repossessions and foreclosures in Tenerife.  Although we have access to bank portfolios to sell these properties, it is rare that anyone buys one!  Clients come to us, expecting to be shown a hidden box of incredible bank bargains and tend to be (understandably) disappointed in what the banks can offer.  We’d like to explain why!

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.

Beat the End of Summer Blues

We all get the end of summer blues, especially those of us who live in northern Europe.  The weather closes in, the rain starts its endless drizzle and the sun becomes a distant memory.  There’s not much to look forward to as each tomorrow promises only darker mornings and shorter days.  But what is the best way to defend your health and morale against this descent into darkness?

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. 

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.

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.

Making a will

Statistics show that people do not like making Wills. It is understandable that people do not like to consider death, but it is irrational not to consider what should happen to your assets should you die, and make sure that your accumulated wealth is distributed in accordance with your wishes.

Property Lettings Boom

So the property boom has ended… or has it?  It may be that the values of property have come down, but people still need to live somewhere, recession or not.  As buyers wait until the market picks up (and they can purchase property at a higher price), property lettings are having their own boom on Tenerife.  With the rise in the number of people coming to Tenerife to escape the recession in the UK, rents have been rising above inflation in the Canaries by 3.7%, one of the highest growths in Spain, while the population has continued to increase.