SOLINCA

What guarantees do I have from SOLINCA?
The guarantee that SOLINCA gives you is the strict fulfilment of the Laws which regulate the building and promotion of buildings, which is fundamentally subject to Act 38/1999 of 5^th November on Regulation of Building, and Act 57/1968, of 27^th July, on the Collection of Advance Payments in the construction and sale of houses and apartments.

How does SOLINCA guarantee me the sums that I hand over in advance?
In fulfilment of Act 57/1968, of 27^th July, on the Collection of Advance Payments in the construction and sale of houses and apartments and the First Additional Provision of the LOE, SOLINCA guarantees, by means of an insurance or joint bank guarantee, the repayment of the sums lost on account plus the legal interest in the case that the construction is not begun or is not completed within the space of time agreed in the contract, provided that the customer and purchaser opts for termination.

What is the LOE?
Act 38/1999, of 5^th November, is the Act on Regulation of Building, which regulates the process of building by determining the legal form of the agents who act herein, setting their obligations so as to make clear the responsibilities and cover the guarantees to the users on the basis of a definition of the basic requirements that must be satisfied by the buildings.

What does the LOE fundamentally say?
It sets down the responsibility of the agents who act in the process of building for the damage caused in the building within the periods of time indicated in the Act.

What is the Ten Year Insurance?
The LOE obliges the promoter to set up an insurance, for the period of ten years, which guarantees compensation for the material damage caused in the building for faults or defects which have their origin or which affect the foundations, the supporting structures, beams, slabs, load-bearing walls or other structural elements, which directly compromise the mechanical resistance and stability of the building.

What costs are caused by the purchase of a new home?
As a rule, the expenses and taxes on the purchase of a house or apartment are the following: IGIC, stamp duty, notarial costs and land registry costs.

What is IGIC?
The Impuesto General Indirecto Canario (Canarian Indirect General Tax) is a state tax of an indirect nature which is chargeable on deliveries of goods and provision of services made by business or professional persons. The rate is currently 5%.

When is IGIC paid to the promoter?
IGIC is handed over in all the payments which are made to the promoter, in the proportion in which these are made, and the promoter pays the amounts to the Tax Authorities.

What are the AJD?
The tax on Actos Jurídicos Documentados (Stamp Duty) is the tax payable on acts formalised in a public document. The current rate is 0.75% of the value of the sale and of the mortgage liability.

What deductions do I have a right to for the purchase of my habitual place of residence?
Generically, the deduction is of 15 % on the taxable base of the relief and up to 9,015 euros annually per declaration.
The Government plans to suppress the deductions for the habitual place of residence from 2011 onwards for incomes greater than 24,000 euros and it will only be possible to deduct the maximum tax deduction of 9,015 euros for those who have an income of less than 17,000 euros. For those who have purchased the place of residence up to December 2010, this Act will not affect them.

What is the home savings account?
It is a special kind of savings account, the purpose of which is the purchase of your ordinary place of residence. This account makes it possible for taxpayers to apply the deduction for sums saved in previous tax years prior to the purchase or construction of the first habitual place of residence.

When do I have to buy?
The purchase must take place within the space of four years from the opening of the home account. For accounts of which the date of expiry is between 2008 and 2010, they have an extension to the 31^st December 2010 to make the said investment, but during that extra time they will not have the right to additional deductions.

What expenses are generated by a mortgage?
It causes costs of valuation, opening commission, costs of the mortgage deed and stamp duty.

Is it obligatory to take out an insurance when you set up a mortgage?
It is obligatory to take out Home Insurance for Buildings against Fire and to keep it in force during the whole life of the loan. The first beneficiary of this insurance will be the creditor institution at which you formalised your mortgage, and you will have to take it out for the value of the house or apartment, according to the valuation, discounting the value of the land. It is a good idea to insure at the same time the contents of the house or apartment so as to be covered in the case of any problem.
On the other hand, it is advisable to take out a Life Insurance covering the capital owing during the whole of the life of the loan as, in the case of your death, the said loan would automatically be paid off, which would free your heirs from that responsibility.