It often starts with your first visit to Tenerife. You fall in love with the island, and this infatuation quickly turns into an addiction you can’t shake off. You want to return again and again, preferably tomorrow, and you soon find yourself planning your next trip to this beautiful island in a subtropical paradise.
Professionalism
The desire grows stronger with every visit, and soon you start longing for a place of your own to avoid relying on others. After working and saving hard all your life, you’re ready to invest in your future. With bank interest rates no longer attractive, purchasing a holiday home on Tenerife seems like the ideal solution. Before long, you find yourself visiting countless real estate agencies and scouring properties.
To buy a property on Tenerife, it’s best to go through official channels. Choose a specialist who values after-sales service as much as the sale itself. Unfortunately, not everyone on Tenerife is equally honest. Selling real estate on Tenerife requires no diploma or certificate, and there’s no mandatory training, even though some organizations promote this. As a result, anyone can start a real estate business without proving their professional qualifications.
Exclusivity
Often, independent agents (autónomos) operate solo, selling properties wherever they can. They might refer potential buyers to an established agency in exchange for a commission. There are no regulations on the Canary Islands governing commission rates or what real estate agents can charge for selling a property.
Whether or not to work exclusively with a particular agent depends on what they offer in return. For example, in Belgium, exclusive agreements are no longer mandatory, and you can request a non-exclusive contract to work with multiple agents.
Consultant or Lawyer
It’s worth noting that there’s no standard service package included in the agent’s commission on Tenerife. Some agents offer minimal assistance, while others provide a comprehensive service. Since agents are not always experts in legal or tax matters, it’s highly recommended to hire an external consultant or lawyer.
The most reputable agents provide all-inclusive services, while less trustworthy ones leave buyers to fend for themselves. For peace of mind, engaging a consultant or lawyer can be seen as an insurance policy, ensuring professional guidance and a smooth purchase process.
Moreover, the best agents provide added value by offering insights or considerations buyers might not have thought of.
Professional Expertise
The average property owner on Tenerife sometimes speculates about the percentage commission real estate agents charge. On social media, figures between 3% and 6%—or even higher—are often mentioned. The standard in the island’s south is generally around 5% of the sale price.
Italian and Russian agents often charge buyers a percentage as well, reflecting their cultural practices. Typically, the seller pays half the commission, and the buyer covers the other half. Whether 5% is considered high is subjective and open to debate.
A skilled agent handles all legal and financial obligations to prevent unpleasant surprises for clients later.
Retention Tax
When selling property in Spain, be aware of the 3% retention tax. The Spanish government has up to four years to claim unpaid amounts related to the sale.
For non-residents, within four months of the sale, the profit must be declared, and 19% of the capital gains is due. The 3% retention acts as a prepayment towards this. Sometimes the retention exceeds the actual tax, resulting in a refund, while in other cases, additional payment is required.
To minimize the taxable profit, certain allowable expenses can be deducted. Who knows these details? Your qualified intermediary, such as a consultant or lawyer, is well-versed in these matters.
Hidden Pitfalls
There are numerous pitfalls in the property-buying process. Most individuals lack the resources, knowledge, and time to master these complexities. It’s therefore advisable to engage a professional agent or specialist who prepares, oversees, and ensures a seamless transaction, including comprehensive after-sales support.
Owning a holiday home in Tenerife becomes enjoyable only when the process is smooth, free of hidden surprises, and the deed is finalized quickly and efficiently—in your language!
Guy Devos © Photography
Buying a holiday home in Tenerife ©
More TRIVIA can be read [HERE].
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