BUY / SELL PROCESS (in Tenerife, Spain)

 

ON AGREEMENT OF A SALE / PURCHASE

 

  • PRIVATE SALES/PURCHASE CONTRACT - prepared by our in-house administration, or by your own legal representative. We usually issue a parallel contract, in Spanish and English (when one, or both, party's native or common language is English) and usually provide a draft prior to signing. Our contracts are valid for 3 months as standard, to allow for mortgage applications to be processed, any / or any unforeseen delays. However, completion can take place as soon as all parties have their parts in place, which can be as soon as 2 weeks from agreeing the deal.
     

  • At the signing of the private sales/purchase contract a deposit is given, we usually ask it to be transferred directly to the vendor's bank account, or our client account, depending on trust issues. Unfortunately we don't have escrow accounts here. If you use a lawyer for the conveyance, they will usually hold any deposits.
     

  • Once a suitable completion date is agreed, all the necessary documentation is passed to the Public Notary for drawing up the new Escritura (title deeds).
     

  • All parties (and/or their legal representatives) appear at the PUBLIC NOTARY together, where the new deeds are signed and funds are exchanged. This is the legal COMPLETION.

 

IMPORTANT NOTICE: - All the buyers whose names are to appear on the deeds, must have an NIE number (Número de Identidad de Extranjero) foreign national’s fiscal ID number. This is provided by the National Police, and you cannot buy anything requiring registration without it. This we can assist with here, a small administration fee of 50 Euros +10 Euros per person over and above the initial applicant. A tax of approximately 10 Euros each will apply. You are required to appear in person, unless someone has power of attorney for each applicant.You will need to open a Spanish bank account prior to completion, as you will need to make money transfers, domicile utilities, community fees and local council taxes. Again, we can assist with this.

 

POST PURCHASE - BUYER'S OBLIGATIONS

As this part of the administration can be confusing for most people, we recommend our services, to carry out the following;

  1. Payment of the purchase tax to Hacienda (Tax Office) 6.5% of the declared value.
     

  2. Payment of the vendor's retention to Hacienda (Tax Office) 3% of the declared value.
     

  3. Registration of the new Escritura (title deeds) with the Registro de la Propiedad (Land Registry).
     

  4. Changeover of ownership for the utilities companies.
     

  5. Registration of new owners at Town Hall (Ayuntamiento) for IBI and basura (annual council tax and rubbish collection).

 

VENDORS TAX OBLIGATIONS

  • PLUS VALIA (LAND TAX) - this is a tax levied by the town council, based on the incremental increase in land values; from the time you bought to when you sell. This can be obtained easily by emailing the town council and requesting the amount. This calculation is applied once a year.
     

  • THIS SECTION ONLY APPLIES TO NON FISCAL RESIDENTS! - 3% retention is made on the DECLARED VALUE of the sale, by Hacienda (Tax Authority) in lieu of unpaid taxes. However, this can be avoided if your accountant applies for the appropriate clearance certificate from Hacienda, before completion. Usually allow 2 - 3 weeks!
     

  • PLUS VALIA (CAPITAL GAINS) - personal capital gains, which is usually sorted out by the Vendor’s accountant, and has no effect on the buyers, either in the present or future?

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