Purchasing a property abroad is for most of the people a complete new adventure. It is therefore VERY IMPORTANT to be assisted by an established and professional reliable Estate Agent.
You would not be pleased if you have purchased a property far above the market value. You would also not be satisfied if you have not been able to compare properties with each other. It is all about finding the right property for the right price. This can be achieved by viewing the properties with a professional estate agent. At Dr. Stange und Partner we tell you honestly if the sales price of a certain property can be justified. Is it a realistic sales price or is it not ? We know the answer to this question because of our 30 years experience in the South of Tenerife !
After several uncommitted visits of freehold properties, the client decides to purchase a real estate for a certain price. To secure the decision of both parties concerned, in Tenerife a Private Contract of Purchase/Sale Promise is drawn between the seller and buyer. Dr. Stange und Partner has always been focused on the foreign market and that is why most of our selling properties are owned by non-residents. In this particular case Dr. Stange und Partner would sign the Contract on behalf of the seller (if not present in Tenerife.) The legality is justified by the Sales Order that has been signed by the seller.
It is normal that on completion of the Private Contract a deposit of 5% of the overall sales price is paid. The outstanding payments follow after a few weeks or months depending on the given agreements, when signing the public deeds.
In Spain the Notary does not provide a third-party account. Dr. Stange und Partner are acting as an agent between the seller and the purchaser. It provides a Private Contract of Purchase/Sale Promise and the 5 % deposits are paid to the deposit account of our company. This sum on the account is considered as a deposit of the real estate and will be retained from the sales price . The deposit CAN NOT be used for any other purpose and is considered to the purchaser to obtain the first right of buying the freehold at the Notary.
Only upon time of the Notary appointment, the seller will pay the outstanding amount by bankers draft.
In Spain as well as the Canary Islands, the purchaser inherits all costs such as Notary fees, property registration, town hall registration, land acquisitions duties, duty taxes and transfer costs, except of the value increase tax. ( Plus Valía ) The overall costs will be between 7% and 9% of the sales price, always depending on the type of purchase (with or without mortgage). The purchaser is made responsible for these payments and must be in accordance with this sum. Within 30 calendar days, after conclusion of the Notary title deed, the purchaser MUST do these payments to the tax office. A fiscal adviser could assist you in this matter.
Not everyone is purchasing a property with the idea of renting it out . For many years Dr. Stange und Partner was not involved with the rental market. However that all changed when the crisis came along. We were obliged to change our policy and today we are managing the rentals of several properties.
Every buyer has the right to choose his way of dealing with the rental market. There is no obligation to work with Dr. Stange und Partner, in terms of the rental of your purchased property. We only charge 10% to the owner and this is taken from the total rental price. The rental price mentioned is including the 10% fee for the agent.
We have seen the market changing over the past years. About 20 years ago almost every property was rented. It did not matter if the property was situated in the center or not. The residential market was booming as well as the upcoming foreign market. Today, there is a high unemployment rate among the locals and this has mainly a negative effect on those properties that are not situated in the center. Properties located on the first and second line are offering in Playa de las Americas the best return on your investment. There is much demand for properties in the center, especially during the winter period. Our foreign rental market is growing every year and we do not expect a decrease in the near future mainly because of :
The extensive increasing energy prices of households in northern Europe
The fantastic climate that only the Canary Islands offers in the Euro zone
The costs of a property depends on the choice you are going to make. If you are not interested in a rental return and you do not want to live around the busy tourist areas than you could choose a property without or very little community fees.
If you want to purchase on a resort with facilities like a swimming pool, elevators, underground parking, etc than you must count on a community fee of apprx. Euro 100,= / Euro 200,= per month depending on the square meters, location of the property and the year of construction. Properties built during the seventies have still sometimes a community fee that includes the bill of electricity, water and rubbish. Dr. Stange und Partner explains you about the exact situation of the community fee of each property.
It is not pleasant when you find out after the purchase that the complex is going to charge every owner an extra sum of money because of a complete renovation of a swimming pool or a replacement of elevators etc. The standard maintenance of a complex can be financed with the community fees of the owners. But in some cases the administration needs to charge the owners an extra sum of money to finance completely the forseen works . In Spain we call this a “derrama”. Dr. Stange und Partner will provide you with all the necessary information, to avoid in the near future any misunderstanding.
The local rates ( Contribucion Territorial Urbana ) in Arona are due to be paid every year between the 6th of May and the 20th of July. It is recommended to pay to the local rate authorities ( Consorcio de Tributos ) during this period to avoid any fines and interest payments. Be adviced that every county has a different period for the payments.
|Type of property||:||Freehold one bedroom apartment|
|Location||:||Parque Santiago I – Playa de las Américas|
|Details||:||Construction 48,75 m2 and terrace 7,50 m²|
|Rates 2014||:||Euro 270,=|
|Type of property||:||Villa|
|Location||:||Urb. San Miguel – Costa del Silencio|
|Details||:||Plot 525 m² and construction 198 m²|
|Rates 2014||:||Euro 585,=|
|Type of property||:||Villa|
|Location||:||Golf Costa Adeje|
|Details||:||Plot 744 m2 and construction 363 m²|
|Rates 2014||:||Euro 1.800,=|
After you have purchased a property, it is recommendable to take a good fiscal adviser . This person in charge will explain your financial obligations.
Dr. Stange und Partner will introduce you to a fiscal adviser and will provide them with your :
Any non-residents in Spain with economic interests in the country such as properties, businesses, etc. are obliged to have a resident representative to act on their behalf with the tax authorities. ( La Hacienda ) The name of this tax representative must be given to the tax authorities within two months of appointing him or her as such in front of a Notary. ( article 22 of the income tax law )
NOT EVERY NON-RESIDENT has to pay the Wealth Tax on their property which is usually the value declared in the Title Deed or the value that is subsequently established by the tax authorities. The first Euro 700.000,= per person are exempt.
Any return earned on a property located in Spain by a Non-resident is taxable at 19% and this is payable the year after the income is earned. If these earnings come from a rental property the management company could withhold the tax on behalf of the owner or if required informs the tax representative about the rentals of the property. Usually the tax representative withholds the tax and pays it to the tax authorities on behalf of the owner.
If the Non-resident property is used by its owner, his or her family and friends exclusively for their own private use ( as a second home ) ,the amount due would be 19% of the minimum income, which would be 2% of the ratable value ( Valor Catastral ) or 1,1% if the ratable value has been revised. The ratable value is to be found on the receipt of the local rates.
In the event that there are still no rates due on the property ( new construction ) and therefore there is no ratable value, the income is considered as 1,1% of 50% of the value declared in the Title Deed or the revised value for purposes of wealth tax.
Dr. Stange und Partner has a very professional approach towards
his clients. We realize that you want to be secure about your investment
and therefore we offer uncommitted a complete service package for every Dr. Stange und Partner purchaser in Tenerife.
Our package automatically covers the services to the purchaser before and after the signing of the Title Deed.
For instance, you need a new telephone/computer line ? As a Dr. Stange und Partner purchaser you are always welcome in our office and Irina will be more then glad to help you in this matter .
The amount of this one off fee package depends on the requirements of each customer. Dr. Stange und Partner will kindly be of your assistance for any of these issues or any further questions you may have !
Every purchase is different and not one deal is like the other. For instance a purchase/sale between two non residents from the UK can be done in Pound Sterling. The Notary will mention the figures in Euros and Pounds but a Pound Sterling Bankers draft from a UK branch will be allowed. This cannot be the case when one of the parties is a fiscal resident. The sum of money MUST than be transferred by the purchaser to his Euro account in Tenerife.
Our service doesn´t stop after you have picked up your Title Deeds in
our Dr. Stange und Partner office !!
To a certain extent we are always at your service ! If you need something translated, you need some legal advice, you want to import a car, etc We can help you in very different ways and we only introduce you to those fiscal advisers, solicitors, business etc. who have proven to be as professional as we are !!
Dr. Stange und Partner, 1986 - 2021, 35 YEARS AT YOUR SERVICE !!!