Regarding the costs that have to be paid when buying a property in Tenerife:
There is the transfer tax to be paid; for a property of which you are NOT the FIRST owner, this amount is 6.5% of the purchase price of the home. For properties of which you ARE the FIRST owner, you pay 7% IGIC + 1% for the Legal Acts.
The buyer must also add the costs for all administrative work that still needs to be done AFTER signing the deed at the notary; such as the invoice from the notary, the registration costs, having the water, electricity, the land register and the garbage collection put on your name.
And if you buy in a complex, the common costs must also be put in your name.
We will make sure that all this administrative work will be done correctly for you.
Regarding the permanent costs that have to be paid as the owner of a property in Tenerife:
As owner of a property in Tenerife, you will pay the water and electricity, the annual land registry (the IBI), and you will also have to pay for the garbage collection. If you buy property in a complex, you also will have to pay the fixed (monthly) costs of the community.
Furthermore, there is the home insurance; these costs depend on the home you are buying.
All non-residents who buy a property in Tenerife must pay the “non-residents” tax once a year for properties that are not rented out.
Concerning this “non-resident” tax, we can arrange for you to be notified every year.
Regarding the costs that have to be paid when selling a property in Tenerife:
If you sell your property in Tenerife, as a NON-RESIDENT, 3% of the total sale price will be withheld at the notary.
These are to pay the taxes of 19% you have to pay on the profit you have made (difference between the price of purchase and the price of sale).
If these 3% is not enough to pay the 19% on the profit, then you would legally have to pay the difference.
If this 3% is more than 19% on the profit you made, then the excess amount withheld can be reclaimed.
There is also the PlusValia that has to be paid: the exact amount can only be requested and calculated once there is a date of sale.
And this is calculated according to the zone, the m2, the year of construction, how long you have had the house, etc.
Apart from that, there is the broker’s commission, which has been agreed upon with you in advance and included in the sales price.
As seller of a property you must also have a Certificado Energética and the costs are for the seller, as well as the cancellation costs of a loan from the bank, if you still have an outstanding loan for this house.
If you have any further questions; do not hesitate to contact us.