Buying a Property in Tenerife – 6 Steps for a Successful Purchase
Did you enjoy your holiday in Tenerife to such an extent that you’ve started thinking about living here? You are not alone. With its pleasant climate and lively Spanish atmosphere, this beautiful island has already charmed many people, which is why some of them have decided to make it their new home. In particular, they are attracted by the opportunity to spend the winter months in the warmth of the seaside and earn passive income from renting out the property in their absence. However, few have any idea what the process involves and how quickly this dream can be realised. In this article, we therefore give you a detailed overview of the different steps that will lead you to acquire a property in Tenerife.
1. Getting NIE Number
NIE (Número de Identidad de Extranjero) is an identification number assigned to foreigners who need to carry out any activities in Spain when dealing with the authorities there. When buying or selling a property, this is essential. To get your unique NIE number, you first need to apply to the relevant authority. You can do so either directly in Spain or at the consular office in your home country. It can take up to 3 months to process an NIE, so if you are in a hurry to buy a property, it is a good idea to apply for your identification number as soon as possible.
Issuing the NIE itself costs €9.84. However, the application process can be a tough nut to crack, especially if you don’t speak Spanish or know your way around local laws. Many agencies therefore offer to complete all the formalities for you. If you would also consider the convenience of processing your NIE with the help of an agency, please do not hesitate to contact us.
2. Opening a Spanish Bank Account
Transactions for the purchase of a property in Tenerife are always made by cheque. As digital money managers such as Revolut and Wise do not offer this service, it is necessary to have an account with a Spanish bank. You can cancel your account at any time after the purchase has been made. A real estate agent can also help you open an account, but this is an additional service that is not included in the commission.
3. First Meeting with a Real Estate Agent
Upon first contact with a real estate agent, a meeting is arranged for the client to discuss their requirements. At the beginning, the real estate agent usually finds out how familiar the client is with the process of buying a property. If the client lacks this knowledge, the broker will guide the client through the necessary steps. It is also important to find out the client’s needs and preferences, from the reason for the purchase to the preferred location. Last but not least, it is also essential to determine the investment budget and the method of financing, including whether a mortgage will be used.
4. Finding a Suitable Property and Paying the Deposit
Based on the client’s preferences, the broker will select several properties that meet the client’s requirements. Viewings of the properties they visit together will also be arranged. If the search is successful and the client finds a suitable property to invest in, a reservation deposit of 10% of the property price is required.
5. Signing of the Contract and Payment of the Remaining Amount
The real estate agent will prepare all the contracts that are needed to purchase the property and will make sure that the client understands all the terms and conditions that he or she is committing to when signing the contract. The signing of the contracts between the two parties then takes place at the notary’s office. As mentioned, payment must be made by cheque. Before the appointment with the notary, it is therefore necessary to visit a Spanish bank, where the client will be blocked for the amount of the balance and a cheque will be issued. The contract of sale is signed between the seller and the buyer in front of the notary, and once signed, the cheque is handed over to the seller in front of the notary, who will be credited with the balance by the bank.
The cost of the notary’s services can be up to around €1000, the price of the real estate agent’s services includes the accompanying to the notary, the preparation of the contracts, and their explanation. The administrative fee at the notary is paid by the client.
6. Obligations Related to the Transfer of Real Estate
After the property is registered in the Land Registry, the buyer is obliged to pay the Property Acquisition Tax (ITP), which is 6.5% of the property price.
Subsequently, it is also necessary to arrange for the transfer of electricity, water, garbage collection, and other matters related to the ownership of the property. These last steps are not included in the estate agent’s services. However, for a fee, all documents required for the transfer of services can be issued to the client. The price for these additional services is around 700 €.
Buying a property in Tenerife can be made easier by handing over the necessary steps to a real estate agent. If you want to ensure a smooth and quick purchase, we will arrange all the additional services that are not normally included in the estate agents’ commission. Contact us, so that we can find your new dream home together!
