mortgage Article

mortgage Navigation

Mortgage
Mortgage Refinance
Calculator Mortgage
Company Mortgage

Below, you'll find extensive information on leading mortgage articles and products to help you on your way to success.

Advice On Buying Property In Tenerife, Canary Islands
Appointing a solicitor in TenerifeIt is vital to appoint a solicitor to assist in your Tenerife property purchase, we appoint an independent conveyancer who will then carry out all searches on the Tenerife property, obtaining all the necessary paperwork, to confirm that there are no outstanding debts or embargoes on the property.The agency or lawyer has the responsibility to gather up-to-date receipts and to see that there are no pending debts on the property.

Nota Simple (Confirmation of ownership and any mortgages or embargoes)

I.B.I. (Local council rates)

Electricity and water receipts up to date

Community fees receipts up to date, signed and approved by the President of the community of owners and the secretary

Copy of the deed (Escritura)

NIE number (Numero deIdentificacion de Extranjeros)
Once the deeds to your new home have been signed, we will assist in obtaining your NIE number. This is a simple process which is needed to register the Tenerife property. An NIE number is also needed to change the household bills into your name, ie Water, Community charges, Electricity, Telephone, Rates etc..
Applying for a Bank Account in TenerifeWe work closely with all of the Spanish banks and can help you to open an account at the bank of your choice here in Tenerife. The cost of opening a bank account for 'non-residents' is around £10 for the administration fee.
Help is also on hand to set up Direct Debits for your household bills, so you have peace of mind that all your bills are being paid whilst you are not here in Tenerife.
Mortgage in TenerifeYou can choose to apply for a in Tenerife or from the UK. rates in Tenerife tend to be amongst the lowest in Europe, and are currently around 3.75 of the bank valuation of the property, for residents it is usually around 80 opening commission

Insurance will vary from 150€ to 350€ per year. (Tenerife Property Consultancy will be able to recommend and arrange adequate insurance for you)

Notary and registration of the mortgage

Provided you submit the requested financial information, the can be available within 10 to 15 working days. The financial information requested is minimal and a is available whether you are self-employed or employed. It does not reflect your country of origin.
Buying a Property in TenerifeOnce you have decided on the property you wish to purchase and the terms and conditions have been negotiated with the vendor then a deposit of 10 is payable on the signing of the title deeds before the Notary.
If you are purchasing a new construction then the constructor will ask for stage payments to be made on the property. These can vary dependent on the constructor. Normally an initial reservation deposit is required, this is then normally made up to 10 on commencement of the foundations, 30 on completion at the time of signing the escritura (Title deeds).
Your appointed solicitor will then carry out all necessary searches on the property; to ensure that it is owned by the vendor, it has planning permission, there are no outstanding debts or charges on the property.
Once the searches on the property are satisfactorily completed and the deposit has been paid in accordance with the terms and conditions of the contract then the title deeds are signed by both the buyer and the seller before the Notary.
The Notary (Notaria)This is a solicitor appointed by the Spanish government to witness the signing of all legal public documents. In this case the title deeds(escritura) of the property. He

represents both the buyer and the seller. The Notary fees are set by law on a set scale depending on the purchase price of the property and must be paid at the time of the signing of the deeds. The Original signed document is retained by the Notary who will apply for a formal change in the land registry. The
purchaser will receive an initial legal copy of the title deed which is signed and stamped by the Notary. The official title deed can take a while to be processed and until then this is your official proof of ownership and must be kept in a secure location.
Legal Costs and Taxes of buying a propertyThese are in addition to the sales price of the property and range between 8-10 (on a resale property) tax applied to the declared value of the property. This tax must be paid within 30 days of signing the title deed. Transfer tax is calculated on the increase in the value of the land from when it was last sold. The calculation is based on the ratable value of the property
and is a 'one-off' payment.(Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados- Mod 600)
of the new declared value on the deeds (equivalent of VAT) when buying a re-sale property

5 of Mod 600

Notary fees - Fixed scale of charges based on the price of the property purchased

Property Registration Office

Plus Valia (added value, land/capital gains tax). This is a tax levied by the Town Hall and is based on the surface area of the land,against the annual increase of the property since the previous sale, on the cadastral value and on the date of the previous escritura.

RatesThis is like the old English rates system and is based on the declared value of the property. These are paid yearly and are generally much lower than the UK.
Community FeesThese are payable quarterly and vary dependent on the property .These are paid in respect of services ie. the complex swimming pool, street lighting, security, community gardens etc.
FREQUENTLY ASKED QUESTIONSWhat is a sales agreement?A private document signed between the buyer and seller. It must reflect ownership of the properry, legal definition of the property, the exact dates of deposits and completion, currency of the transaction (euros, pounds etc) and penalty clauses.

What happens if there is a on the property I want to buy in Tenerife?If there is a on a property; Before the signing date at the Notary, your agent or lawyer will have to inform the holding bank to prepare cancellation costs, amount and interest due from the seller. On the day of the signing we will be asked to prepare a bankers draft for the amount due, to cover the etc, for the seller. Please note that once the bank has collected the last payment, you should make sure that the cancellation deed is duly registered in the Land Registry.When we sell a property in Tenerife do we have to pay tax?
a) Tax regulations require the buyer to withhold 5% of the price on the escritura and to pay it to the tax office when buying property from non-resident vendors.
b) Capital Gains
Whilst we endeavour to ensure that the information is correct at the time of publishing this information is intended for guidance only
Tony Riley has 15 years experience in the Tenerife property market as Managing Director of Tenerife Property Consultancy.
For further information please visit our advice page and this about Tenerife guide

We strive to provide only quality articles, so if there is a specific topic related to mortgage that you would like us to cover, please contact us at any time.

And again, thank you to those contributing daily to our mortgage website.