Mortgages in Tenerife
Financing your property
Buying a property in Tenerife has proven to be one of the most secure forms of capital investment that you can make, as property values have always risen at a higher rate than inflation. However, your most valuable asset still remains your primary residence in the UK and this can provide means of raising the capital for the purchase of a home in Tenerife. Many people find re-investing the equity they have accumulated in their home in the UK into a second home in the Canary Islands makes a lot of financial sense and is a popular way of funding purchases in Tenerife.
Obtaining a Spanish mortgage
It is fairly straight forward to apply for and obtain a mortgage in Tenerife and most mortgages can be arranged within 10-15 days. We can show you a variety of mortgages according to your needs. Most mortgages for non residents are for up to 70% of the valuation price for a term up to 30 years. The documents you will need to provide for a mortgage do vary but examples are as follows:-
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Passport or national identity card
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If employed, last three pay slips, certificate of annual earnings issued by employer or an annual tax return
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If self employed, annual tax return, profit and loss statements for the last 2 financial years
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If retired, pension certificate, annual tax return
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In all cases, last 6 months bank statements, statement of assets, certificate of ownership of your properties
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Sales contract, nota simple, last tax receipt
Mortgage rates are very competitive compared to the UK and a wide range of products are available to choose from. Loans can be repaid over a short period or long term, dependant on the age of the applicant.
How we can help
Ocean Breeze Properties work closely with many banks based here in Tenerife as well as UK providers. Should you require a mortgage we will introduce you to mortgage advisors from one of a number of the major Spanish financial institutions who will be able to study your specific needs and the loan repayment period. Once you have found an appropriate mortgage and provided the paperwork as detailed above, the application can be processed. When approved both the deed of sale and the mortgage loan must be signed in the presence of the notary.
Being a Tenerife Homeowner
As a Tenerife homeowner, you will have a number of new fiscal responsibilities, these include a number of annual taxes.
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Property Tax (IBI). A municipal tax levied on home ownership (similar to council tax in the UK).
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Personal Income Tax (IRPF). A national tax levied on the income generated by your properties or any other kind of income in Spain, for example if you let your property.
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Wealth Tax. A national tax levied on capital assets in Spain as of the 31 December each year.
Also you need to be aware that if your property is part of a complex you will be liable to pay maintenance expenses for common facilities which you share with other owners. Most banks will help you set up direct debits to cover these payments and obligations including water and electricity.
Although forming part of the sovereignty of Spain, Tenerife has it's own stable autonomous government and expanding economy. Spain is a member of the EEC, which makes it very attractive to foreign investors. Many people enjoy their home in the sun and perhaps periodically allow their family and friends the same benefits. However, in addition to the capital growth of the value of their holiday home, some people obtain useful income by letting their property to tourists. We can help introduce you to management companies who can rent your apartment either long term or short term for holiday lets.
For more information about mortgages or investments please contact one of our staff, or email us and we will get back in touch with you.
