Casabella Estates
Casabella Estates
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Purchasing Guide

 



At Casa Bella Estates we would like to provide you with all our help in finding your ideal property here in Tenerife. We will work with you to find the property that most suits your individual needs both in price and location. We believe our major responsibility is to present all the facts to you honestly and accurately and assist you in your search so that you are 100% happy with your purchase.
Contained in this leaflet is a summary of the procedures involved once you have chosen your property.

Deposit – Re-Sale Properties
Once you decide on a property, we will ask for a deposit, normally 10%. At this point we will also ask you to sign a pre-sale contract of purchase/sale. This is your receipt for the deposit which you have paid; it states that you agree to proceed with the purchase within a stipulated time period, and also binds the seller to the same agreement. Once you have signed this contract and paid your deposit and you then decide not to proceed with the contract you would lose this amount. In the same respect if the seller decides not to go ahead with the sale, then they would be obliged to return double this amount.
The rest of the monies i.e. 90%, are payable upon the signing of the new title deed (Escritura) in your name. You do not have to be here for the signing, and if you cannot, we will give you instructions for preparing a Power of Attorney (Poder). This is a legal document which will allow us to proceed with the purchase in your absence.

Deposit – New Build Properties
Once you have chosen your property, you will be asked to sign a Contract Agreement which would require a deposit, usually 10 % of the total price. This amount must be paid when you and the promoter sign the contract. There is usually a schedule of interim payments to be made during the time of construction. The balance of the total price is paid when your property is ready.

Signing of Escritura
The Escritura or title deed is signed before a Notary. He is a government appointee, whose job is to oversee the signing over of the new deed, and to make sure the documents are in order. Not only does the Notary act as an independent legal advisor to the contracting parties in terms of current civil, administrative and fiscal legislation but also by way of his/her involvement as a commissioner of oaths, certifies the contents of the contract. The contract will be translated to you if you do not speak Spanish and you will be able to ask any questions of the Notary if you are not sure of anything.
It is also a vital part of his job to carry out a final search at the Land Registery (Registro de la Propiedad) for the property which you are buying. Land Registrar
Land Registrars, for their part, are responsible for providing the information contained in the entries of the Land Registry so that it is easily comprehensible. This information is essential prior to the purchase of a property and is extremely valuable since, for example, it is the only way of proving who the property belongs to and if there are any charges on it i.e. if the person selling the property is really the owner , whether the property has been mortgaged, if there are any claims or attachments on the property, if it is subject to any urban or administrative ban or any other restriction on ownership, etc,. It will also reveal if there are any debts on the property. Legal Fees
Purchasing a property also involves legal costs which you will need to calculate on top of the agreed purchase price of your property. These include:

  • Notary Fees – Approx. €800 (depending on declared value of property)
  • Registry Fees – Approx. €400 (depending on declared value of property)
  • Purchase Taxes – This is calculated at 6.5% of the price declared in the deed . However, if you are buying a new property, the purchase tax is charged at 5%.
  • Land Value Tax (Plus Valia) – Approx. €200 – €300.
There are however many factors that enter into the calculations of these fees and taxes, but generally 8 to 10% of the purchase price is normally sufficient to cover the costs. We will arrange for the notary’s office to advise you of the full costs prior to the signing and these costs together with the purchase price (less the 10% deposit) must be paid in advance of the signing of the Escritura.

Setting Up A Bank Account
You will need to open a Spanish “non-resident” bank account when buying a property here. This will give you complete flexibility to transfer monies of whatever currency between Tenerife and your home country. We will guide you in doing so and will help you make all the necessary arrangements. Your visits here may be sporadic, at different times of the year, and varying durations. The best way to ensure that your affairs are being managed properly is to set up standing orders with your bank to make sure that if a bill arrives while you are away it does not languish in a mail box for months on end.

Foreigners Identification Number (N.I.E)
The N.I.E. is a document issued by the Spanish Home Office and should be applied for at the “Oficinas de Extranjeros” of any National Police Station. You need the N.I.E. after your signing of the Escritura. Although this certificate is not essential for the signing of the Escritura at the Notary’s office, it will be required at the Property Register Office to register the purchase in your name. Application is made at a National Police station. For this you will need to take your passport, a photocopy of same and two passport size photos. The certificate can be collected approximately two weeks later, depending on their workload. If you want someone else to process your application for you, you can confer Power of Attorney to them and they will collect your Identity Number from the Police station for you.

Mortgages
We would be only too happy to assist you if you would like to purchase a property with a mortgage loan and we will advise you on the best rates available with our banks here in Tenerife. It may also be appropriate to arrange funding against a property that you may have in the U.K. using English Banks for funding part of the purchase price and we have financial associates that can help in this matter. The best combination of funding sources can be achieved in order to reduce the interest rates and other costs.

Maintenance and Running Costs of your Property
You will probably find that the expense of the up-keep of your property compares very favourably with what you might have experienced before. Most properties are part of a community of properties and owners. That is to say they form part of a complex of apartments, of whatever size, which shares a communal entrance, passageways, gardens and extra facilities such as a pool and sun terrace. Each community is composed of all the owners of each apartment, and normally meets once a year to review the maintenance and development of the complex, and to set the community charge. This is the fee which is paid by each owner towards the general costs of running the complex and might be divided into monthly, quarterly or six-monthly payments.
The community appoints a local administrator which has an office here to manage its affairs. The administrator is responsible for collecting community charges, keeping owners informed of committee meetings and may also be able charged with carrying out gardening, pool maintenance and general repairs. Some communities also make their own arrangements for the billing and payment of water, electricity and rubbish collection bills. Others expect these to be paid separately. We will advise you what is required in your case. If your property does not form part of a complex then everything will be payable directly to the relevant authority or company. Each utility, with the exception of rubbish collection, is charged according to consumption.

Buying As An Investment
For a number of reasons owning a property in Tenerife has a sound commercial basis which argues well for future stability. Tenerife is a duty free port which means that you can buy many imported goods at lower prices than in mainland Spain. Since Spain became a member of the EEC there have been many changes and there is now a firm democracy, a stable government and an expanding economy, making it very attractive to foreign investors. Spain’s surplus of foreign currency continues to grow and with the foreign income derived from the tourist business and a common currency in Europe it stands to reason that there will continue to be stability. Combine this stability with Tenerife’s sun and sub tropical climate (which gives a twelve month holiday season), and you have the perfect combination for investing in property in Tenerife.

Legal Fees
Purchasing a property also involves legal costs which you will need to calculate on top of the agreed purchase price of your property. These include:

  • Notary Fees – Approx. €800 (depending on declared value of property)
  • Registry Fees – Approx. €400 (depending on declared value of property)
  • Purchase Taxes – This is calculated at 6.5% of the price declared in the deed . However, if you are buying a
  • new property, the purchase tax is charged at 5%.
  • Land Value Tax (Plus Valia) – Approx. €200 – €300.
There are however many factors that enter into the calculations of these fees and taxes, but generally 8 to 10% of the purchase price is normally sufficient to cover the costs. We will arrange for the notary’s office to advise you of the full costs prior to the signing and these costs together with the purchase price (less the 10% deposit) must be paid in advance of the signing of the Escritura

 
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Admiral Properties S.L.
Spanish Phone: 922 71 60 55