Buyers Guide

Many people have thought about buying property in Tenerife but have been put off by the daunting aspect of buying in a foreign country such as Tenerife and in a language they don’t fully understand.

Tenerife Property Emporium has put together a few important points when considering buying property in Tenerife. Like in most counties, the majority of Tenerife properties are bought and sold through Tenerife estate agents and are mainly offered freehold. After sitting down and discussing what your needs are and what you would like from a property, your agent will arrange the appointments on a day & time which suits you best, accompanying you on the viewing and returning to your accommodation (or another location if requested) once finished.

There are 2 ways to finance buying property in Tenerife-:

CASH PURCHASE – this is where you raise the total funds to buy the property yourself.
MORTGAGE – this is where you borrow a percentage of the property price from a Spanish bank.
As a non-resident of Spain, a Spanish bank will borrow somewhere between 60% & 70% of the
property price / bank valuation (which ever is the lowest), depending on your financial circumstances.

Tenerife Property Emporium advise all our clients if buying with a mortgage, to help speed the process up when buying a Tenerife property that you submit your paper work prior your property search so you can calculate your approximate budget and when you find your ideal property you are in the position to make a serious offer as your finance will already be in place.

When you have decided on your ideal property, whether it is an apartment with a good rental return or a luxury Tenerife Golf villa, all offers and negotiation is made through your estate agent. Once your offer is excepted verbally (at this point Tenerife Property Emporium strongly advice you appoint a lawyer) your agent & lawyer will begin checking the property for any debts, what the property is actually registered as and the person selling the property is the rightful owner, this is found out by ordering a ´NOTA SIMPLE´ from the land registry, remember any debts against the property follow the property, so if the property is sold with a debt against it, the debt will be inherited by the new owner.

When everything shows to be correct and your agent and more importantly your lawyer is happy with the status of the property, you will be asked to put down a deposit somewhere in the region of 10% of the purchase price and you will enter into a sales contract between yourself and the seller of the property. Your lawyer will have gone through the contract with you so you completely understand what you are signing.

From signing the sales contract, the final completion will normal take place within 4 – 8 weeks, this is where you will sign the new deeds (Escritura) at a public notary. The public notary is there to draw up the new deeds and witness the transaction.

Between the signing of the sales contract and the agreed completion date you must obtain an N.I.E number, this number is a “Foreigners Identity Number”. To apply for the N.I.E number you must pay a small tax (approx. 10€ ) in a local bank, then fill in a application form and present it at the local police station in Playa de Las Americas along with your original passport and a copy. Your N.I.E number is obtained on the same day.

You must also open a Spanish bank account, this is to allow direct debts to be set up for running the utilities of your new property i.e. water, electric, community etc….

At the public notary you will pay the remaining balance for the property, this balance is normally paid by a bankers cheque in the name of the seller (if the seller has a mortgage on the property, you will need to bring two cheques – one for the mortgage amount and the other for the seller). After signing for the property and handing over the remaining amount (all on the same day) you will receive the keys and from that point on, you become the proud owner of a Tenerife Property.

Before or on the day of signing, your lawyer will have request from yourself an additional 10% of the purchase price to cover the costs incurred when purchasing a property, this will cover all costs including Transmission tax 6.5% (on re-sale property) notary, land registration fee´s, and of course lawyer’s fees (normally between €1,000 - €2,000). It takes about 3 months for all the paper work to be registered and tax’s to be paid, so after the 3 month period don’t forget to contact your lawyer for all the relevant paper work and a list of expenses.

After the point of sale your agent / lawyer will also complete the change over of the utilities that are attached to the property i.e. water, electric, rubbish, local rates and community fees (if applicable)

One thing I forgot to mention, you must obtain an NIE number, this number is a ´Foreigners Identity Number´ your lawyer or agent can asset with this.