House flipping is a rather American term and means to buy property cheap, renovate and sell as fast as possible with a good profit in mind.
The best chances for financial gain are usually obtained by giving a house or apartment a thorough face lift which includes popular modern paint techniques like brush painting, sponge painting and others.
Main focal points with a villa renovation must always be kitchens, bathrooms,
entrance hall and landscaping.
Outdoors should be kept simple with a
lush green lawn or, at least a nicely tiled or paved entrance yard as catchy detail.
An entrance door which looks original, inviting or even expensive helps much, too.
House or apartment appliances like tabs and shower attachments, hobs, kitchen sinks, wash basins, bath tubs and toilettes must of course look modern and good.
Minor things like latest wall plug covers give the impression of a new property.
Mirrors can achieve wonders of allusion
of larger space which is always a good asset to have when thinking of house flipping.
Don't forget that with one dead fish moth or cockroach lying around you may kiss your home flip good bye.
Don't fool interested buyers with a newly painted roof if the roof cover would need replacing.
An inspector will see and might specify it accordingly which will put the value of the property down and influence Tenerife mortgage grants.
Also, think twice before going through luxury additions such as a skylight which is often costly to install but, might not improve the property value that much.
House flipping in Tenerife has been applied like all over the world.
It was even more popular in the past years when bank credits were cheap and easily obtainable.
A guy in Puerto de la Cruz had wisely bought a Tenerife apartment where two condos (studios in Tenerife) had been joined.
He renovated everything to perfection and decided to sell after looking for better jobs. He found one in another part of Tenerife which was too far from his home.
He needed to sell his flat in the north of the island and bought an apartment in the south.
Scarcely 3 years had gone by after the date of the initial apartment purchase of the place which he sold.
This period is crucial in Tenerife. Why?
The Receiver of Revenue Tenerife or Spain is applying gains tax to places that look like property flips for profit purpose.
The guy would have been fully entitled to buy property in Tenerife again - without the demand of sale's tax/gains tax after a time of 3 years.
Now, he had to prove with stacks of documents why he had to sell and, that he really needed a new home because of his job.
Please, mind that one is entitled to change property for another one only when it remains first residence.
Well, the young man got away with a relatively small tax charge for selling
his first home by changing it for a new one with strings attached which meant closer to work.
He actually has been charged again 6 months later as I've just found out. He is crying because, he has to pay an additional
EU 1775 which brings it now to almost EU 3000 in tax for the small 2 bedroom, 2 bathroom apartment, central Puerto de la Cruz.
A couple of years ago, I studied a Tenerife property guide to sell an apartment.
House flipping wasn't my objective.
I wasn't sure what I would
do after selling either.
To make sure that I would get unbiased information I went to see Social Service in the townhall Los Realejos (Avda.Canarias Realejos Alto) where I live.
There, I asked a consultant as well as a lawyer if it would be wise to sell in my case.
Both asked me immediately for how long my property for sale in Tenerife had been in my name.
The busy gentleman as well as the very friendly Spanish lady lawyer called Macarena of Los Realejos cautioned me to mind Spain taxes.
She said, I might have to face much unnecessary tax when selling, especially because, the small property is not my first residence.
None of them could tell me exactly how much tax would apply.
The question would be how much more than 18% sales tax as per new law 2007 for everybody would apply.
By this experience as well as from what I learned from the man who relocated for his work I am under the impression that the Receiver of revenue applies its sales tax or gains tax tariffs according to individual judging.
Just figure, that you will have to face many questions after a premature house flip in Tenerife or all over Spain.
Therefore, premature house flipping must be avoided.
Taking home purchases and house flipping on the Canary Islands in Spain lightly could mean property investment gone sour.
Should you suddenly decide to buy a property which is not to be flipped, then, the new inheritance and donation laws for Tenerife become very important. They only apply to Spain's autonomous regions, where the biggest of all Canary Islands is part of.
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