Selling property in Tenerife

Selling your property in Tenerife? You probably have a lot of questions, about the process, fees taxes etc such as:

  • How much does it cost to sell a property in Tenerife?
  • What taxes do you pay when selling a house or apartment in Tenerife?
  • What documents do I need to sell my property in Tenerife?
  • What is involved? What are the legalities?
  • What steps do you need to take?
  • How long does it normally take to sell a property in Tenerife?
  • Do you need to be in Tenerife to sell?
  • You want to know about the fees, taxes and timeframe.

Secondly, you probably want to know who you can rely on to sell your property and how estate agents here work. Typically, sellers want to know:

  • Should I be working with an agent?
  • Should I be working with 5 agents?
  • What are they going to do for me?
  • How can I ensure I pick an agent that gives me the best possible chance of selling?
  • What commission are they going to charge and are they worth it?

So, lets dive in and get some answers.

Firstly, lets deal with the tecnicalities, the processes, the legalities. I can give you an outline of this, but bear in mind, I am doing this every day, over and over so to me, this stuff is pretty simple and straightforward, but to a seller with little to no experience of the market here, it can feel somewhat overwhelming and you can end up with your head spinning! But, thats why you hire a professional, right? To take care of all of this for you – and I will.

Firstly with any sellers, I will ascertain whether you are resident here or non-resident. As the taxes and payments from the sale are quite different between the two. The simplest way to determine this, if you arent sure, is to consider where are you paying your personal income tax each year? If it is in Spain, to the Spanish tax authority (Hacienda) then you are fiscally resident here. If you are not paying taxes in Spain, even if you live here, then for the purposes of selling, you are non-resident. You don’t get to chose – this is determined by your tax status.

So, most of my clients tend to be non-resident. Most of them live in the UK, Ireland, Belgium, Scandinavia and several other countries, mainly in Europe.

Capital gains tax

As a non-resident seller, you will pay 3% of the sales price “in lieu of capital gains tax” What does that mean?

Sales Price 200,000€
Tax paid is 3% (200,000€ x 3%) which is 6,000€

The reason for this is that you do not submit tax returns each year in Spain. so if you have bought a property for a total cost of 150,000€ and are now selling for 200,000€, you have made a profit of 50,000€ which would attract capital gains tax of 19% which is 9,500€. But since you are not going to be around at the end of the tax year to declare and pay this (you live in a different country and pay tax elsewhere) a retention tax is applied at the point when you sell the property, hence 3% is paid “in lieu of capital gains tax.”

If you are due to pay more than this, like in the example above, then you can have this calculated and opt to pay the entire amount owed – although most people do not do this and the difference between the 3% and the actual capital gains owed is normally not that much. However, if you are going to sell for 3 million€ and have bought for 500,000€ – you should definitley be taking financial and legal advice on this! As capital gains could be as much as 475,000€ but a 3% retention would only be 90,000€ – thats a huge difference and the Hacienda (tax authority in Spain), I am sure, would be interested in speaking to you about the rest of what you owe. In most cases, though the difference is 4,000€, 6,000€, 8,000€ etc and it is unlikely you would be pursued for this amount. So – 3% of the sales price, thats what you have to pay as a non-resident seller.

Agent fees

Typically these are 5% of the selling price with a small amount of tax equivalent to VAT added which will bring the total to 5.325% Some agencies do charge more but these are the standard, typical rates to expect. You can try negotiating these but bear in mind, agents collaborate with one another here – a lot! So in many cases they are splitting this amount. And when they are advertising your property to other agencies, they need to confirm they have standard commission in place on the sale so they can pay the other agents who will bring them buyers Without 5%, they will not be able to colllaborate and cannot maximise the chances of selling. It is rarely beneficial to work with an agent who offers lower fees as agents who do this are in position to maximise your marketing. Tgis is a clear indication that these agents do not fully understand the market here and that property sales is very likely a secondary activity to them and not their primary focus.  

So, agent fees – 5.325%

Another tax – Plusvalia

So this one is a kind of capital gains tax on the land and increases for every year of ownership. It varies from property to property so is not a fixed percentage. A few real life example:
A one bed in Los Cristianos, owned for 8 years – plusvalia tax was 1,680€.
A one bed in Playa de Las Americas, owned for 12 years, plusvalia tax was 2,800€.
With the right information, I can calculate this for you so you know beforehand what all of your fees will be.

Total deductions when selling

Those are the main deductions – you’re looking at about 9% in total. thats a pretty reliable ballpark figure to use.

Example sale deductions

  • Sales Price 195,000€
  • 3% retention 5,850€
  • Agent fees 9,750€
  • Plusvalia 1,900€
  • Total deductions: 17,500€
  • Owner receives 177,500€

If you want one of these or a couple of these personalised to your sale, let me know and I’ll email some – I can knock these out in a few minutes. If you have a mortgage, tell me the approximate balance and i’ll include that too. 

Other expenses

Other expenses when you sell – you need to be fully up to date with your community fees, water, electricity, IBI (annual property tax like council tax.)

Spanish mortgages and cancellation fees – obviously if you have a mortgage against your property, you’ve got to pay it off. Its simple enough, once you have a confirmed sale and know the date you will sign the sale, you can request a mortgage cancellation certificate from your bank. This will show how much they want on the day of the signing and will include any redemption fees when cancelling the loan.
There is another charge which the bank will not mention though and this is an amount for the administration and registration of the canc,ellation of the mortgage at the land rgistry – quite the moutful… What it means is when your mortgage is cancelled, the cancellation need to ne registered and your bank have literally zero interest in doing this. But, it is important it is taken off otherwise the mortgage charge will remain against the property and they can be a real headache to remove later. You are looking at 600€ or 700€ for this although if you ask your bank to take care of it, they will charge you around double this amount.

Extraordinary community expenses. Where a community has an extra payment ongoing (so may they are charging an extra 30€ a month for 24 months for painting the outside of a building) and you are 1 year in, the remaining amount should be calculated and added to the community certificate you will need when it comes to selling. These are called “derramas” and legally, the seller of the property is responsible for paying the entire derrama when selling. If there are 12 months left at 30€ a month, then the seller will pay the 360€ when they sell.

Embargoes, tax charges. I don’t see a lot of these but they can crop up from time to time. If for some reason you have a charge against your property, then when you sell, this will be taken from the proceeds of the sale. So if you owe the tax man 20,000€ in Spain and they have placed an embargo for this amount against your property, it isn’t really an issue, so long as we have all of the relevant paperwork, up to date, showing the exact amount owed including interest and the method of payment.

That generally covers everything, as you can see, there is a lot to think there, you can figure all of this out yourself or, hire a great estate agent and they’ll do it for you!

The Right agent to sell your property

So, lets say you’ve found an agent who can organise all of that for you and take care of everything, what are they actually going to do so far as marketing to sell your property and achieve the best price?

Well, I have spent the best part of 15 years figuring this out. Back then, when I started, I had no experience and very little idea – I was starting from nothing…

And it was pretty tough at first – trying to get established, largely being ignored by other agents who were long-established and basically feeling my way around and trying to gain some traction.

I persevered. I worked hard, I tried a whole lot of different ways and methods, some of which, started to pay off. So I did more of what worked, less of what didn´t work and continued experimenting and researching, looking for that angle, looking at what other agents simply weren´t doing well – and I found lots!

Before long, I was competing with smaller agents – and beating them, soundly. I kept going, kept working, bit by bit, testing things, figuring things out and constantly adding to the process I used. Often I was having to learn completely new skills from scratch, new techniques, some of which were quite technical and challenging. Lots of reading, lots of Googling, lots of testing…

It was SO much work!

It was so much work! When I wasn´t listing properties, or on viewings, I was working on websites, social media pages, learning about the latest SEO breakthroughs and marketing techniques. In comparison to the bigger, established agents, I had a really small budget to work with and had to constantly think “outside-of-the-box.” I learned to do everything that other agents were doing – but at a MUCH higher level, especially photos – WOW, the photos… shocking, simply shocking!

And that was one of the easiest simplest ways to be better. But there were so many other things they weren’t doing at all – so I learned all of those too!

The hard work, the long hours, late nights, weekends – a wife who was angry about me not being home enough – it all paid off eventually, Finally. I began showing up everywhere on the internet. My website was receiving thousands of visiotrs every day and the enquiries were coming in thick and fast.

What is working today?

This process though, it never really ends, the work, the research, learning, developing new methods. If I used only the methods I used back then, now – it would no longer work. Marketing is constantly evolving and changing and I have seen many agents simply fail to keep up.

Today I still spend a lot of my time looking for these new methods, tweaking what I already do, I split test pages, contact forms, new methods with photography, videos, social media, SEO, Google optimization, email marketing, local search marketing – a bunch of things that all add up to an incredibly effective platform to sell property in Tenerife.

It is not standard or normal, and I can count on one hand how many other agents here work like this. There´s not really much point in my explaining every detail of every aspect of what I now do as this would run into pages and pages! But I do everything you would expect and then a whole lot more – I really go a lot further, push a lot harder and when you are working with me, I will get you results.

All I ask in return is that you have an open mind and forget anything you may have read on Facebook or been told in a bar, about selling a property here. What I do works.
If you work with me and let me do what I do, I guarantee you will have the best possible chance to sell your property – it’s that simple.

If there is any reason I do not think I can sell your property, then I will tell you why. If I cannot help you, then I will tell you why.

Those who I take on, will see the benefits quickly. They will have a very high-quality listing – great write-up, high-quality photos etc but that’s only the start and that’s only what you can see.

Most of what I do is behind the scenes, invisible. Marketing and promotion, buyer outreach, syndication to hundreds of other agents who I think may have buyers, marketing into lots of different countries in different languages and a whole load of more technical aspects which help me find the RIGHT buyer for your property.

Compare this with the standard approach agents take – list literally any property at any price, terrible photos, a plain, boring write-up and very little actual interest going forward as they have hundreds and hundreds of properties and it becomes pretty obvious why my approach is so much more effective.

I started competing with these agencies when I was a one-man business, no office, no experience, and very little money. I was forced to find the most efficient and effective ways to sell. What I have today is a massively enhanced, fuller version of what I did back then.

A Quick Example of what sets us apart

Just looking at one of the platform I have, which no other agent has or can access, take a quick look here at my Tenerife Facebook group”I Love Tenerife” I built this from nothing to over 50,000 members! I own this group, it is exclusive to me and the clients I work with – agents here would pay a lot of money to have access! Many have asked! As big as that group is and effective as it can be, it is only a small part of what I do…

And this is just ONE method I use – and it is not even a major one.

Tenerife property Sales - selling in Tenerife

But I cant show you too much!

I do so many other things but the problem in writing them all out here is, I don´t want to give a free blueprint to every agent that comes and reads this page!

This process has taken nearly 15 years to perfect and I´d very much like to keep a lot of my methods to myself!

So now you know a little about me and have some understanding of how I work and what sets my methods apart.

Case Studies

As I write this, just 1 month ago I took on a property in San Eugenio. It had been with an agent for around 9 months. Lots of promises but no results to speak off. The owners was frustrated and annoyed as every time she called them to ask for an update, they simply advised her to drop the price. The real problem was that they were a big agency with lots of staff taking on lots of properties and then doing very little with them. It was all a numbers game – take on as many as possible and we´ll sell maybe 1 in 10. So if we have 500 properties – we get 50 sales and WE are happy. Trouble was, their clients were not. This is PASSIVE marketing. They are waiting for the buyers to come to them. There´s not an awful lot of work going in, it is more about getting the numbers up. So for every happy seller, there are nine unhappy ones.

In this case, I went to see the property on Monday, took a full set of photos, checked all of the details, ordered the documents from the land registry and went through with the owner, what she could expect. The next day the property went live and within two days I had five viewings lined up. The fourth viewing was exactly one week after I had first seen the property and I had an offer on the property during the visit. We negotiated and ended up closing the deal two days later, pretty close to the asking price in that case – one very pleased owner and a happy buyer.

This happens time and time again. The quickest sale I ever did – and this suprised me too – I sold the property the same day I took the photos. I just happened to have a buyer with me, he asked if he could come along, loved it, offered on it and the rest is history! Now that isn´t normal! There was certainly an element of luck involved (and it seems the harder I work, the luckier I get…) but that property had been listed for over a year with multiple agents (not a good idea – I can explain why when we speak) and none of them had even come close to a sale, nor did any of them seem to be making any effort anymore.

It does not have to be this way and it certainly will not be if we are the right fit for one other and decide to work together. I cant promise I will sell on the first viewing or even in the first week or month. But I can promise you, if you work with me, I will give you the Best Possible Chance of Selling. Because that is what every seller needs.

Lets Talk about what I can do for YOU

Fill out the form below or give me a call (you can reach me directly on (0034) 671 111 4013) and Let Get Started!

 

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