Buying Property in Tenerife
You'd be surprised at how many people actually do a "Shirley Valentine", tearing up those return tickets in pursuit of a new life. Now, while I personally wouldn't recommend such a hasty decision, there is a lot to be said for seriously contemplating buying a property in Tenerife.
For those looking to relocate the initial reasons are simple - the island has an average year round temperature of 23 degrees centigrade making its climate the envy of Europe; the cost of living is generally around a third of that in the UK; and the clear blue skies, fresh ocean breeze and lack of pollution make it one of the healthiest environments to live, anywhere on the globe.
For other people though, the primary reasons for buying a property here are more bank-balance inspired. Investment in sunshine bricks and mortar is hugely popular. Buying to let is also extremely popular, particularly with homes on or near the coast. However, tight letting laws have been introduced so seek professional advice about the legalities of renting out a holiday home in Tenerife.
The Process of Buying Property in the Canary Islands
You'll be glad to hear that it is "cheaper" to buy a property in Tenerife or any other of the Canary Islands than mainland Spain. The Canary Islands' Autonomous Government generally has lower tax rates.
The first thing you need to buy a property in Tenerife is an NIE number, basically an identification number for foreigners. This is a requirement for anyone with a financial interest in the Canary Islands. Following this, you need to set up a non-resident's bank account, which again is a simple process.
Once you have found your dream home in the sun, it's time to negotiate on the asking price. As a buyer, you're in the driving seat as we're currently in a "buyer's market" as there is more supply of properties for sale than people looking to buy. British vendors in particular who are moving back to the UK are in a tough position due to the volatility and strength of the Pound versus the Euro.
Once a sale price has been agreed upon, your agent will draw up a sales contract or Compra Venta. This outlines the deposit amount, the timeframe for completion and the balance to be paid at the notary.
During the time between the compra venta being signed and the notary appointment where the title deeds are transferred to the new owner and the balance paid, your estate agent or lawyer will be gathering the paperwork needed to complete the conveyancing process and preparing the paperwork for switching over your utility bills, etc.
As a foreigner, you'll be liable to pay 3 per cent of the declared value of the house as a retention to the Spanish Tax Office, but provided your accounts are all in order this is usually returned within six months or so. This used to be paid by the buyer but in most cases these days, the vendor pays this tax. There is also a 6.5% tax to pay on resales and 7% on new builds.
We can highly recommend Second Home Tenerife as an estate agent. When it comes to insuring your new home in Tenerife or purchasing any other insurance for that matter such as car insurance or life insurance, we can recommend Tenerife International Business Centre SL. TIBC also handle conveyances in Tenerife.
So where to buy?
On the coast
The vast majority of foreign buyers dream of a home within breathing distance of that salty air. The resort areas of Playa de Las Americas, Los Cristianos, Costa Adeje and Costa del Silencio in the south, Callao Salvaje and Los Gigantes to the west, and Puerto de La Cruz in the north are where most of the British expat community live. Development has been rapid in these areas due to demand, which unsurprisingly has pushed the prices up. Having said that, a re-sale, one-bed apartment in Los Cristianos within walking distance of the ocean can still be found for under £50,000.
With regard to new properties, particularly in the more exclusive Costa Adeje area, one-bed properties are hard to come by for less than twice that price. Luxury detached villas are now fetching up to and over £1 million, especially those skirting the golf course.
For property bargains in the sunny south, it's best to look at the fringes of these established resort areas. Palm Mar faces the harbour of Los Cristianos on the opposite side of the bay. Currently there's a frenzy of construction to create a new residential development and several apartments are being offered at very attractive prices - one-beds from around £68,000.
In the north, the "old lady" of the island, Puerto de La Cruz has undergone something of a popularity revival recently with regards to property investment. Although the opportunity for acquiring new one and two-bed apartments is few and far between, bargains can still be found. A one-bed apartment in the city centre, five minutes walk from the beach comes with the tempting price tag of just under £73,000. Luxury villas are also much in demand in this more verdant region of Tenerife but for a detached residence don't expect much change from £250,000.
Because of the topography of the island, even many inland properties have spectacular sea views. The more popular areas for British buyers include Granadilla (often dubbed Tenerife's Tuscany), neighbouring San Miguel, and the town of Adeje all in the south, and La Laguna, La Matanza and La Orotava in the north. Restoration projects have proven popular but the number of properties ripe for conversion has dwindled considerably.
The price of rural homes is usually slightly less than their coastline counterparts, particularly in small villages where the property is expected to sell to fellow Tenerifians. However, finding out about such opportunities usually involves talking to the local bar and shop owners rather than looking in an estate agent's window. Talking to the locals to find out the 'insider take' on the area is not bad advice before putting signature to contract in any property transaction.
So if you're ready for a lifestyle upgrade heed the property world's three commandments - location, location and location. Put your pounds in property where the sun keeps shining and the shimmer of the ocean is never too far away.