1) If the property is bought from a developer "I.G.I.C." (VAT) is charged at 5% of the declared value and collected by the developer before signing the deeds. On top of this you must pay 0.5% " Impuesto sobre Transmisiones Patrimoniales " (Property transfer tax). (Payable within 30 days of signing)

If you buy a used property you must pay 6.5% " Impuesto sobre Transmisiones Patrimoniales ". (Payable within 30 days of signing )

2) Notary´s fees.The Notary prepares the " Escritura " (title deeds). He is obliged by law to carry out a search prior to signing the title deeds. He will answer any queries on legal matters regarding the purchase. However in order not to receive a nasty surprise on the day you go to sign, it is advisable to obtain a search before you commit yourself to buying. This is a simple and speedy procedure which we automatically carry out for no charge on behalf of our clients.

The fees increase according to the value of the property and the length of the deeds. On a 75,000 euro property sold recently the fees were 325 euros.
A few days after you sign, The Notary (in exchange for his fees) will provide you with an original copy of the deeds plus 4 " copias simples" ( copies).

3) Land Registry fees. These also increase according to value. On the same property they
were 188 euros. These fees are paid when you collect your original copy of the deeds after registration. This takes at least a month and often more.

4) " Plus Valia " . This is a capital gains tax based on the increase in the value of the land under the property during the previous owners period of ownership. If you own an apartment you will own a percentage of the plot upon which the building lies therefore making you liable for this tax . It is not normally levied on rural land. Obviously the longer you own the property the more you pay. On a one bedroom flat sold after 22 years the tax was 1750 euros. On a property sold after a little more than a year it was 95 euros. The law says that unless stated otherwise on the title deeds
the vendor pays. However it is normal practice in the Canary islands for the buyer to pay. When the amount due is substantial we suggest negotiating with the Vendor. This tax is collected by the Town hall. A copy of the new deeds must be taken to the Town hall within 30 days of signing the Escritura . You can ask for the amount to be calculated and paid immediately or you can ask to be notified once calculation has been prepared. This normally requires several months.

The Islands Estates undertake to fulfill all your obligations regarding the above free of charge. For a small fee we also do the same work for those who have bought privately. We will also prepare everything for private buyers or vendors:

• carrying out searches
• checking on payments for services
• organizing appointments at Notary´s offices
• drawing up wills and other legal documents
• translations (English/Spanish- French/Spanish- German/Spanish)
• dealings with local authorities- town halls, rates offices, communities etc.
• insurance
• valuations
• mortgages

We will also put you in contact with lawyers, accountants and architects who speak English and other languages.

Property Ownership

What is it going to cost once you've bought your property?

There are several things that will have to be paid regularly.

1) Community fees

If your property is on a complex you must contribute towards its upkeep and running costs such as cleaning, swimming pool maintenance, security guards etc. The amount will depend on where and how large your property is, how much work and cost is required to maintain the complex and how much you and your fellow owners agree to contribute. These fees are collected every one, two or three months- normally by direct debit from your bank account.

2) Utilities

Electric and water bills are paid every two months- normally by direct
debit. Gas is bottled and can be bought at some petrol stations or can be delivered
by ordering over the phone. Rubbish bills are normally paid every six months.
If you live on a complex some or all of these bills may be included in your
community fees.

3) Local Rates

These are paid annually. Depending on where your property is situated they are levied between May and November for the whole of the current year. The authorities will send you notification of when and how much you owe.
However these notifications often do not arrive so make sure you find out when
they are due in your area and go to the local office of the " Catastro " (Rates
authorities) to pay if the notification has not arrived.

The rates are considerably lower than in Britain- ie on a typical one bedroom
apartment in Las Américas they are approximately 115 Euros per year, on a 3 bedroom flat in Los Cristianos 225 euros per year, while on a 3 bedroom townhouse outside Adeje they are 128 euros per year.

4) Taxes

For non-resident property owners there are two taxes involved.
1) " Impuesto sobre el Patrimonio " ( Wealth tax)
2) " Impuesto sobre la Renta " ( Income tax)

Wealth tax is calculated on a sliding scale starting at 2 per thousand ( 2 0/00) (which applies to most owners) of either the escritura value or the "valor catastral " ( rateable value) whichever is higher.

Income tax is charged at 25% of either 1.1% or 2 % (depending where your property is situated) of the higher of either the escritura or the rateable value. This applies only to those who do not receive any income from their property. Should you receive income from rentals then the rate is 25% of the gross income.