When you buy a new (direct from a developer) property in Tenerife, IGIC (VAT) of 5% is payable on the value declared on the Escritura (Title Deeds) and is collected by the developer when signing at Notary. In addition, Property Transfer Tax (Impuesto Sobre Transmisiones Patrimoniales) of 0.5% is payable within 30 days of signing (attended to by your Estate Agent or Solicitor).
On resale properties, Tenerife Property Transfer Tax (Impuesto Sobre Transmisiones Patrimoniales) is 6.5% and is payable within 30 days of signing (attended to by your Estate Agent or Solicitor).
Notary Fees in Tenerife
The Notary, who prepares the property's Escritura (Title Deeds), is obliged by law to carry out a full search of the property prior to signing it over to the new owner(s). In addition to explaining the process to the prospective owner(s), he will answer any queries on legal matters regarding the purchase. Before you arrive at the Notary, we at Second Home Tenerife will also have undertaken all the searches necessary (such as a mortgage, local rates - rubbish, electric & water and community fees) to ensure that there are no debts or encumbrances registered and that ‘clear title’ is transferred to you on the day of signing.
A Notary’s Fees increase according to the value of the property and the length of the deeds. For example, on a €375,000 property sale, the fee would be approximately €725 (these can vary from one Notary to another). A few days after you sign and pay his Fee, The Notary will provide you with an original copy of the Escritura (Title Deeds)
Land Registry Fees
These also increase according to value, and on the transaction mentioned earlier (€375,000 sale), amount to €600. Land Registry Fees are paid when we collect your original copy of the Title Deeds after registration (which takes at least a month and often more).
In our next Second Home Newsletter, I will give some more information on the costs of owning a property in Tenerife.
Corné Schreuder
Sales Director
