tenerife property consultancyTenerife Properties Canary Islands Spain
Tenerife Real Estate Agents

Tenerife Property Consultancy Real Estate Agents assist you with every step of buying and selling properties, from the initial search & enquiry to the key in the door to an excellent after sales service with an Impartial, Transparent, Confidential and Professional Service.

Glossary of Terms associated with buying Tenerife Real Estate
Spanish Property Terms

A

Abogado - Spanish Lawyer / Solicitor

Adosado - Semi-detached or town house

Amortizacion - Redemption, Repayment

Repayment of the initial mortgage amount by means of a scheme of installments, including a repayment of capital borrowed and an amount for the interest charged. According to the type of mortgage, these installments can be fixed for the whole life of the mortgage or vary with interest rate fluctuation.

Architecto - Architect

Arras Contract

Clauses inserted into a Sales contract to allow either party (buyer or seller) to break the contract prior to completion provided that certain penalties are paid.

Aval Bancario

A guarantee covering any money placed as a deposit or as stage payments against an unbuilt or unfinished property.

Assesoria Economica - Spanish Accountant

B

Banco / cuenta de / tarjeta de - Bank / bank account / bank card

Basura - Rubbish bins and rubbish taxes

Boletin de instalaciones electricas

The certificate from the electrician once the property is complete.

C

Caja de Ahorros - Savings bank

Cancelacion anticipada - Early Repayment or Early Redemption of Spanish mortgage

Repayment of the total amount or partial repayment of the borrowed amount before maturity. In partial repayments, you can choose to reduce the monthly payment and keep the agreed final maturity date, or keep the same amount of installment but reduce the term.

Cancelacion Registral - Registry Discharge

Once the Spanish mortgage has been repaid, the encumbrance has to be released from the Land Registry. This Involves costs of Notary, Registry and Lawyer.

Capital Gains Tax

A capital gain tax is a tax paid on the profit made from a property transaction, residents and non residents alike pay 18%. Profit is determined by subtracting the property purchase value from the sale value.

Carga - Registered Charge

Legal charges regarding a determined property entered in the Land Registry, i.e. a mortgage
Before signing the purchase contract, ensure that there is no charge related to that property in the Land Registry.

Cedula de Habitalidad - Occupancy / Habitation Certificate

Cedula de Habitalidad certifies that the property meets the minimum occupancy conditions. Certificate of habitation issued when a new build property is complete. Required before a property can be switched from the builders supply connecting for utilities, such as electricity & water.

Certificado de Eficiencia Energetica CEE -Energy Performance Certificates EPC
The Spanish Government has passed a new Energy Efficiency Law, Royal Decree 235/2013 Of The 5th April 2013.

The Royal Decree states that Certificado de Eficiencia Energetica (CEE) (Energy Performance Certificate EPC) will become a Legal requirement for properties in Tenerife and throughout Spain that are advertised for sale from the 1st June 2013.

All Sellers must by Law be able to present this Certificate to prospective purchasers and to the Notary.

The energy rating label must also be included in any advertising or marketing including on estate agents websites.

Certificado de Registro -Certificate of registration This document replaces the old style Residencia.
Everyone who is an EU citizen and has stayed or intends to stay in Tenerife for a period of longer than 3 months is obliged to get themselves entered on to the foreigners' register. If you already have a Residencia you need not apply for the new Certificado de Registro until your Residencia has expired.

Certificado de fin de obra - Formal Completion of Works on a New Property

Certificate from the architect when work on the property is finished.

Comisión de apertura - Mortgage Opening Fee or Mortgage Arrangement Fee

This is a percentage of the mortgage discounted from the total amount when it is paid into your account, for services rendered in granting and processing the mortgage. Usually approx 1%

Comisión de cancelacion anticipada - Early Mortgage Repayment Fee

This early mortgage repayment fee, indicated in the mortgage contract as a percentage of the repaid amount, compensates the lender for the loss of interest payments expected for the period between the early redemption and the agreed maturity. Usually approx 1%

Comunidad de propietarios - Committee of property owners

Properties on some complexes will have an annual community charge to cover costs of general maintenance, pool care, gardens, reception etc. Depending on the size of the development and the services offered, this can vary between approx. £800 and £1200 per annum. Other complexes will not share services and there will be a minimal fee to cover street lighting etc.

Contrato de Compra Venta - Private Purchase Contract

A private document signed between the buyer and seller. It must reflect true ownership, legal definition of the property, the exact dates of payment, currency of the transaction (euros, pounds, dollars etc) completion dates and penalty clauses. It is usual that the vendor commits to paying double the amount of the deposit paid should he withdraw from the contract. There would also be a penalty paid by the purchaser in the amount of the deposit held should he withdraw from the agreement.

D

Diferencial - Margin

The set value throughout the term of the mortgage which is usually expressed in percentages and which is added to the reference rate to calculate the interest rate for each revision for variable rate capital repayment mortgages.

Documento Privado - Private document

Documento Publico - Public document

E

Embargo - Embargo on a property for unpaid debts such as a mortgage or property taxes.

Escritura publica de compraventa - Deed of Sale

The sales transfer document and title deeds to the property that states the purchase price the property was bought for. This document legalises the purchase and shall be signed by both contracting parties and by the notary. The purchaser obtains a first copy of the deed once all taxes have been paid and the corresponding inscription in the Property Registry has been done.

Euribor - Variable mortgage interest rate set by European banks

An index based on the interest rate for deposits in Euros at 12 months that is published by the European Central Bank and commonly used as reference rate for variable rate mortgages.

F

Fin de Obra - Formal Completion of Works on a new property

Fiscal Representative
Someone you appoint to keep your tax affairs in order.

G

Gestoria

Specialists used to obtain official authorisations, permits and licences

H

Hacienda - The Spanish tax office.

Hipoteca - Mortgage
A legal charge entered in the Property Registry when a property is assigned to be collateral for a mortgage.

I

IGIC Impuesto General Indirecto de Canarias (Canary Islands General Indirect Tax)
On New Properties the Tax payable upon purchase is now 7% IGIC, Impuesto General Indirecto de Canarias (Canary Islands General Indirect Tax, similar to VAT) of the declared value on the Escritura (Title Deeds). The IGIC was previously at a rate of 5% until it was raised to 7% on 1st July 2012.

Impuesto sobre Bienes Inmuebles - IBI - Property tax levied yearly.

The equivalent of rates.
This is like the old English rates system and is based on the valor catastral Catastral value of the property. The Local Ayuntamiento (Town Hall) sets the Catastral Value of a Property. The IBI are paid yearly in Tenerife and are generally much lower than the rest of Europe.

Impuesto actos Juridicos documentados - AJD - Stamp Duty / Transfer Tax

Legal documentation tax approx 0.75% of the property purchase price

Impuesto sobre el Incremento del Valor de los Terrenos - Plus Valia - Tax on the increase of land value

A tax on the increase in land value, levied when a property is sold.
This is a local Spanish tax which is charged on the capital gains on the sale of property or land.
Under Spanish law it is the seller who must pay this tax (except in circumstances where an agreement has been made to the contrary, something which must be recorded in the private sales contract as well as the title deeds). In Tenerife, it is usual for the buyer to pay the Plus Valia.
The amount calculated for this tax depends on the location within the municipality, the number of years since the property or land was purchased and the rise in value since then.
The scale used by the town hall to calculate this tax is based on certain parameters fixed by law.

Impuesto sobre el valor anadido -IVA - Value Added Tax VAT

Only charged on new build properties, land and commercial real estate.
Sales made directly by a developer (newly built homes) are subject to VAT. The current standard rate is approx 7% on the sales value in case of private use and approx 16% in case of commercial use. In some autonomous regions like in the case of the Canary Islands the rate might vary.

Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados- Mod 600 - ITP - Property Transfer Tax

This is paid by the property purchaser and is a standard 6.5% (on a Tenerife resale property) tax applied to the declared value of the property. This tax must be paid within 30 days of signing the title deed. ITP - Property Transfer tax is calculated on the increase in the value of the land from when it was last sold.  The calculation is based on the ratable value of the property and is a 'one-off' payment.(Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados- Mod 600)of the new declared value on the deeds when buying a re-sale Tenerife property

On New Properties the Tax payable upon purchase is now 7% IGIC, Impuesto General Indirecto de Canarias (Canary Islands General Indirect Tax, similar to VAT) of the declared value on the Escritura (Title Deeds). The IGIC was previously at a rate of 5% until it was raised to 7% on 1st July 2012.

Indice de referencia - Reference Rate

This base rate is, on variable rate mortgages, used to calculate the new interest rate when it is reset.
Pay attention to the fact that the reference rate, together with the margin, determines the amount of future payments.

Interes ordinario - Ordinary Interest

Normal mortgage interest rate. It has to be specified in the contract whether the interest rate is fixed or variable throughout all or part of the mortgage.

IRPH - Indice de Referencia de Prestamos Hipotecarios

Similar to the Euribor, this rate is used as a reference for variable rate mortgages and published by the Banco de Espana. It represents an average rate for mortgages offered by all Spanish financial entities.

Impuesto sobre el Patrimonio - Patrimonial Wealth Tax

THIS IS A TAX PAYABLE YEARLY WHEN YOU HAVE PURCHASED A PROPERTY IN SPAIN AND TENERIFE IF YOUR TOTAL ASSETTS ARE VALUED AT OVER 700,000 Euros.
This is a Wealth tax for anyone holding Assets and Monies over 700,000 Euros in Spain. This includes Real Estate and Funds in Bank Accounts. If you are a Non Resident this Patrimonial Tax applies only to Spanish assets.
This tax had been reduced to zero % in 2008 but has been reintroduced for the years 2011 and 2012.
The Tax is paid once a year for the previous year, ie you will pay the Tax for 2012 in 2013.
The percentage rate varies from 0.2 % to 2.5% on various thresholds, on assets over the basic threshold of 700,000 assets.
Please note if a property is owned jointly by a married couple they must each file Patrimonio Tax returns.
As a husband and wife will file individual tax returns if a property and assets are in joint names, this allows 1,400,000 Euros.
The Patrimonial Tax is calculated on whichever is the Highest value of:
1. Escritura (Title Deed) - the price declared on your Escritura

2. Valor Catastral - >The valor catastral (cadastral value) is the rateable value of a property set by the municipal government. The valor catastral is usually much lower than the market value of the property. The cadastral value of a property can be found on Local Ayuntamientos IBI (Rates receipts).

Impuesto sobre la Renta de no Residentes Modelo 210

THIS IS A TAX PAYABLE YEARLY WHEN YOU HAVE PURCHASED A PROPERTY IN SPAIN AND TENERIFE: Non Residents Tax payable to the Agencia Tributaria (known as Hacienda, the Tax Authorities).
This is a tax payable by persons who are Non Residents of Tenerife but own a property in Tenerife that is not their main residence.
The rate of Tax payable is 24.75%.
The rate of Non Residents Tax was increased to 24.75% from 24% from the year of 2012.
To calculate the rate payable determine the Propertys Valor Catastral (cadastral value, this can be found on Local Ayuntamiento IBI Rates receipts).
Multiply the Valor Catastral by 1.1 % if the Catastral value has been modified since 1994.
Then multiply this sum by 24.75 % and this is the amount of Tax Payable.
The Impuesto sobre la Renta de no Residentes is paid once a year for the previous calendar year.
Please note if a property is owned jointly by a married couple they must each file Individual Non Residents Tax returns.
EXAMPLE: Property worth €200,000 with a Valor Catastral (catastral value, usually much lower than Market Price) set by the local Ayuntamiento of €114,746 updated after 1994.
The tax amount to be paid to the Hacienda Tax Authority once a year is €114,746 x 1.1% x 24.75%: 312.40 €

J

K

L

Libre de cargas - Debt free

Libro del edificio - Documents from the developer when a new building is finished

Licencia de prima ocupacion -Licence to occupy a completed property

Licencia de obra - Building permission

M

N

N.I.E. - Numero de Identificacion de Entranjero

Spanish Tax number for residents and non-residents.
Fiscal or tax identification number required by all foreign property owners in Spain.

N.I.F. - Numero de Identificacion Fiscal

The fiscal number which all Spaniards have (the same number as their identity card and passport numbers).

Notario -Notary Public

An official witness of documents like purchase contracts and mortgage deeds.
The Notary acts as the public official when signing the public deeds, such as property sales or the mortgage agreement. He is obliged to ensure that current legislation is fulfilled and to defend the interest of the parties, particular the borrower's interests.

Notarised
The act of officially sealing or approving an official document in front of a public notary.

Nota Simple
Extract of the property register showing a property's details (such as the owner) and whether any charges / debts are registered against it. Also a copy of property deeds.

O

Obra nueva - Document certifying a new building

Oferta vinculante - Bank document specifying mortgage conditions

Offplan Property
New Development Property that is sold from plans and is in the process of being constructed.

P

Plazo de amortizacion - Mortgage Term or Repayment Period

The period of time during which the mortgage capital and the corresponding interest have to be repaid.

Prestamo hipotecario -Mortgage Loan

Usually known simply as Hipoteca (Mortgage), this is a loan granted by a lender and backed by property.

Poder - Power of Attorney

A third party given official authority to sign documents on your behalf.

Q

R

Registro de la propiedad - Land Registry

Register of Property Ownership. The Land Registry contains all acts, contracts or legal charges referring to a property, such as ownership or charges. Registro de la propiedad is also the local department responsible for maintaining the Land Registry.

Representante fiscal - Foreigner's official tax representative

Resale Property - A second hand property, already registered at the property register in Tenerife.

Residencia - Residency permit

RESIDENT OR NON RESIDENT
If a person resides more than 182 days in any calendar year in Tenerife, Canary Islands or Spain, then that person will be deemed a resident in Spain for tax purposes.
Persons spending less than 182 days in any calendar year in Tenerife, Canary Islands or Spain, will be deemed non-resident for tax purposes.

Retention when Selling Tax regulations in Tenerife require the buyer to withhold 3% of the price on the escritura and to pay it to the tax office when buying property from non-resident of Tenerife vendors.
A cost when you sell a property in Tenerife if you are Fiscally a non resident is a 3% tax retention of the total sales price of the property which is enforced by the Spanish Tax Authorities to pay your capital gains tax and any other outstanding taxes.
This procedure is carried out in order to ensure that you have no public or private debts pending within the Spanish territory.
Once the Spanish tax authorities have been paid any of your outstanding tax debts out of the 3% retention, your Fiscal Representative can apply for a rebate of the balance of the monies, less your Capital Gains and tax bill.

Residente - Resident of Tenerife

S

Se vende or en venta - For sale

Se alquila - For Rent

Seguro de amortizacion de prestamos - Mortgage repayment insurance

Seguro Multirriesgo Hogar - House insurance

T

Tasa anual equivalente -TAE - Annual Percentage Rate APR

This represents the cost of a mortgage calculated as if it were paid as one single repayment each year. It has to be indicated on any mortgage offer to make it easy to compare different mortgage offers with different characteristics (interest rate, commissions ,reference rates margins etc.).

Tasacion Valuation - Independent valuation of property

An independent surveyor company carries out the valuation of the property in order to determine the current value of the home within the property market and to specify the maximum amount that can be financed. The valuation is valid for six months after the date of issue. Usually costs approx 250€

Tasa de cambio - Exchange rate

Tasadores - Official Bank Valuers

Titulo de propiedad - Deeds stating the ownership of property, date of sale etc.

Trastero - Storeroom

Tecnik - Town Hall architect

U

V

Valor Catastral - Assessed value of property for tax purposes.
The valor catastral (cadastral value) is the rateable value of a property set by the municipal government. The valor catastral is usually much lower than the market value of the property. The cadastral value of a property can be found on Local Ayuntamientos IBI (Rates receipts).

Verificacion registral - Land Registry Check

That is the examination of the Land Registry records of a property, verifying the legal owner and the existence of charges, such as mortgages, embargoes, etc. The document where all this is reflected and that must be presented to the bank and Notary is the Nota simple de cargas.

Vivienda de Proteccion Oficial - VPO - Tenerife Subsidised housing.

Withholding tax -If you are a non resident 3% of the selling price of your property will be retained by the Tax Office while the vendor's Capital Gains Tax is being assessed.

For further advice and guidance on the obligatory Legal Fees and Taxes when purchasing Tenerife Property please visit

  • Advice on buying property in Tenerife
  • Whilst we endeavour to ensure that the information on buying and selling Tenerife is correct at the time of publishing this information is intended for guidance only



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