Searching for your ideal house in Tenerife : Part 04
THE TAXMAN
The Spanish tax system is complicated and can be confusing.
While it is advisable to appoint a fiscal advisor to deal with your induction into the Spanish tax system, there are a few things best kept in mind by yourself.
All foreign and non-residents with financial affairs in Spain must have an NIE number. The NIE (Numero de Identificacion de Extranjero) is an identity number and social security number. A certificate with your NIE number will be required at almost every turn..
Without it you cannot find proper employment, arrange credit facilities, order a phone line or purchase a house. It is possible to open a visitor’s bank account with just your passport for identification but it makes sense to do it with your NIE number.
New homes in Spain are subject to seven per cent VAT, referred to here as IGIC. A one per cent stamp duty is levied on the purchase of a new property.
A six per cent transfer tax is levied on homes purchased from a previous owner.
Land buyers must pay 16 per cent VAT on purchases. Commercial properties are also subject to 16 per cent VAT.
Rates are payable by all property owners. These pay for local council administration, education, sanitary services, street lighting, etc. What you pay is based on the value of your property.
When you have found the home you wish to buy, ask for a full evaluation of any unpaid taxes on your chosen property. Also ask your agent to find out any other outstanding debts charged to the property. These may include utility bills, fines, administration fees, local charges and community fees – even road tax on a car. These debts, if not paid by the previous owner, will be inherited with the property for you to pay.
SIGNING AND SEALING
With your dream property in sight, price agreed, with vendor willing and able, you must start the ball rolling as soon as possible. This will require another visit to the Canaries.
Once on the island you should sign a private contract with the vendor quickly and be prepared to pay a non-refundable deposit – which you forfeit if you fail to see the deal through. Have your mind completely made up when you pass this point as anything up to 10 per cent of the houses value is usually asked. The house is then taken off the market.
Have a lawyer present when you sign the contract to give it one final read over. This will bind you and the vendor to the deal until the final transfer of title deeds.
With this contract signed the notary will then draw up official title deeds to re-register the property under your name. You will be given a date to sign the title deeds. Be present. It is possible to award power of attorney to another but this is not nearly as prudent as being there personally to see everything through as you like it. Make last checks on the property one week before you sign as you will be accepting it in its state on the day. This ensures everything is to your liking and gives time for the vendors to answer any last requests. Visit once more if work needs to be done. The signing of the deeds transfers legal ownership of the property to you, with keys – it also triggers the balance of payments from the bank or your own funds to the vendor. Notary fees must also be paid on the day, along with designated taxes. Arrange for house insurance to begin from that day.
MAKING YOUR MOVE
With keys in hand and your new abode before you, your work is not quite complete. Change all utilities into your name with the cooperation of the previous owner. If you intend to bring items from the UK use a carrier specialised in international removals; ask for a written quote, which states the speed and time of delivery as well as price. Ask to see insurance cover for your items. A good carrier service will work closely with you to fully understand the logistics of your move. It is advisable to talk to and tip loading staff, as these people are largely responsible for the safe passage of your belongings. Moving a family pet has been made easier in recent years but the animal must be micro-chipped and vaccinated in good time before the move against rabies. With that in place your pet should travel here as easily as you.