INFO - TENERIFE
PROPERTIES WITH MANY LEISURE AMENITIES
OWNERSCHIP & PURCHASE

PURCHASE OF A CANARIAN COMPANY (S.L.)

Based on the Rules of the REF Law - Art. 25 (patronage of canary islands), companies situated on the Canary Islands (S.L., S.A., etc.), are free of transfer taxes (land transfer tax - Impuestos Sobre Transmisiones Patrimoniales - ITP) and fortune tax (Patrimonio).

This is the reason why it is cheaper to buy a property as a company (S.L.) than as a private person.

If this property should be sold again later, instead of the sale of the property the company shares and the management of the firm can be written over to the buyer. For a private buyer the transfer tax rate is 1 % of the value (instead of 6 % land transfer tax ).

In cases of inheritance, is it possible for the inheritant to transfer the shares, with a power of attorney to himself, instead of the usual testate. The differences in Taxes are:

Rate of estate (death) duties 3% - 60% of the value, based on the degree of the relationship and the period of ownership of the testator

Rate of transfer tax 1% of the value