Beverly Hills Club apartments selling strongly despite higher taxes

Beverly Hills Club apartments selling strongly despite higher taxes

To date The Nordic Consulting has helped sell 65 apartments in the Los Cristianos holiday complex – far more than any other real estate company. Thirteen of these sales have been in the first five months of this year.

The Tenerife property market continues to be strong, although of course we anticipate a quieter early summer, with lower visitor numbers. Most current sales are to investors who want to speculate on the price of apartments whilst also enjoying some private holiday use.
Selling their apartment is the end goal for many owners in Beverly Hills Club. Their ownership has failed to deliver the investment returns they were expecting at the time of purchase in 2017. Nordic has helped quite a few of the sellers to exit the rental contract they had with Excel Hotels & Resorts SA, this enabling them to get a better price for their property.

New tax rules

Taxes are higher in 2022 on most property transactions in Beverly Hills Club. This is the case where apartments are sold at a loss, typically the case if the apartment is sold with an active rental contract. The particular taxes in question are:

  1. The 6.5% “IPT” purchase tax paid by the buyer (Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados).
    This tax is now calculated using the official reference value of the property (“valor de referencia”). These values are published on the Catastro website and are typically higher than the actual sales price in Beverly Hills Club.
  2. The “plusvalía municipal” tax paid by the seller (“Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana”).
    This tax calculation also now uses the official reference value. We have not since an instance yet where this value falls and therefore we now anticipate that there will always be plusvalía municipal to pay, even if the property is sold at a loss.

 

Despite these higher transaction costs, we are still receiving a significant number of inquiries from potential investors and have a further two sales scheduled for completion next week.

You can read the reviews of sellers who used The Nordic Consulting by visiting Google Reviews here.

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