Just the same as in the UK, there are also additional costs on top of the purchase price when buying a property in Tenerife. When you buy from FT Casa, there are no hidden costs or commissions to pay – our fee is included in the sales price of the property and this is paid by the vendor. The costs that the buyer are responsible for are the official, legal costs such as taxes, notary, land registry, solicitor´s fees etc.
There is a tax called the Plus Valía which is a tax on the increase of the value of the land from the last time it was sold, but it is the vendor who pays this.
Another point to note is that if the vendor is not a Spanish resident, then the buyer is lawfully obliged to retain 3% of the declared purchase price of the property which is then paid directly to the Spanish Tax Office (La Hacienda) and this must be paid within 30 days of signing at the Notary. The reason for this is to prohibit the vendor, who is a non-resident, from failing to pay the corresponding taxes after the sale of the property.
Here is a guideline of additional costs which you will have to pay:
If no mortgage is required, then you can expect to pay approximately 8% – 10% of the purchase price in costs:
- IGIC 7%. This is the Canarian VAT and is applicable when buying a new build from a developer. It is not payable on a resale property.
- Notarial Acts tax of 0.75% (Actos Jurídicos) if you are buying a new build from a developer.
- Transmission Tax of 6.5% ( Transmisiones Patrimonales). This is applicable when buying a resale property.
- Notary fees – these can vary from around €500 – €1,000. For properties over €400,000 it is 0.1% of the price and for properties below €100,000 it is 0.4%.
- Land Registry fees – on average these are around €400 – €500. They are based on a sliding-scale and for more expensive properties you will have to pay 0.1% of the price and for cheaper properties it is 0.3%.
- Lawyer’s fees – These can vary a lot as some charge by the hour, some charge 1% of the property price and some will charge a flat rate. As a rough guide, expect to pay between €1,500 – €2,000.
- There will also be a bank fee for issuing the cheque and these can vary from bank to bank but are usually between 0.2 % – 0.5% of the value of the cheque.
If a Tenerife mortgage is required, then you can expect to pay approximately 10% – 12% of the purchase price in costs. The additional costs are derived from the mortgage set-up:
- The bank will charge a commission for issuing the mortgage. This is normally between 0.5 % – 1% of the loan value.
- The bank will order a valuation on the property (tasación) and it is the buyer who must pay for this. Unless it is a very large property and/or a more detailed survey is required, then expect to pay between €200 – €300.
- A second title deed must be drawn up between the buyer and the bank and this must be signed and registered at the Notary office. This is done when the title deeds are signed and will cost roughly the same.
- A stipulation of any bank issuing a mortgage is that the property has a comprehensive home insurance cover and sometimes this must be contracted through the bank or their insurance agent.
This may all sound rather daunting but it is really quite straightforward and together with your agent and your lawyer, you’ll have on-hand assistance and advice guiding you on this final step to owning your very own home in Tenerife!