As in the United Kingdom there are associated costs in purchasing property in Tenerife. (i.e. in the U.K stamp duty & legal expenses).
There are a number of factors that enter into the calculations of the fees, taxes and costs involved. As a guide you should budget around 10% to 11% of the purchase price of the property to cover all the costs.
On all Spanish property transfers there are two fees and two taxes which become payable.
The Notary (page 13) will require a fee for preparation of the title deeds (Escritura) and another fee is required for registering the property in the new owner's name(s).
Currently there is a document tax of 0.5% and a transfer tax of 5% of the value of a new property (assuming you are purchasing a new build property from a developer), or 6.5% if you purchasing a resale property previously owned by a private owner.
The second tax refers to the increased value of the land (known as the Plus Valia). This tax is levied at various rates based on the annual increase in the value of the property since the previous sale.
Generally, under Spanish law, the seller is liable to pay this tax (Plus Valia). The fees and transfer tax become payable soon after the title deeds (Escritura) are signed. It may be some time before the 'Plus Valia' tax becomes payable and often the seller has returned to his country of origin and cannot be found. Under these circumstances, the purchaser will eventually be liable for this tax in any event. Your Spanish lawyer will ensure the 'plus valia' tax is paid by the vendor.
