Our buyer’s guidance is designed to help you when looking to buy property in, or move to Lanzarote through each critical stage of purchasing your perfect property. Whilst this guidance will give you a general overview of the process, we strongly recommend that you speak to one of our agents in order to seek advice specific to the property you would like to purchase.
Our guidance covers the key elements of buying property in Lanzarote safely and successfully, including how to get started, planning your property search, taking care of your finances and important tax and legal considerations.
We aim to provide the most professional, informative, loyal and dedicated service in Lanzarote. The best interests of our clients will always come first and we will place the clients’ concerns ahead of our own in each and every transaction. Whether we are handling the sale or purchase of your property, our team approach ensures your needs are important to each and every member of our team.
There are a variety of different types of property available in Spain, from small studio apartments to luxury villas.
Vivienda Unifamiliar (Villa)
These are relatively large detached properties with a home and grounds. They are great permanent homes, but function less well as vacation homes, since the grounds entail a good deal of maintenance year-round and their value results in higher taxes.
Apartments are the most widely available type of property in Spain. They are ideal vacation properties, as they are easier and cheaper to manage. It is also easier to find apartments close to town centers.
Casa Adosada (Modern semidetached property)
These properties are most often built as parts of large new developments, and typically feature two stories and a small private garden. They are good both as permanent homes and vacation homes, offering the privacy and space of a villa with the relatively low upkeep of an apartment. They are still rare outside of highly developed areas.
Casa de Pueblo (Village house)
These village homes are typically semi-detached townhouses. They offer a lower price, village ambiance and shops and stores in walking distance. However, they usually also need a good deal of work, particularly on the kitchen and bathrooms.
Finca (Country house or farm house)
These properties are less expensive than coastal properties and usually in need of reform. They offer good value and idyllic surroundings. However, particularly for those who are not fluent in Spanish, they can also be isolating. They are not usually ideal as vacation homes or rental properties, as upkeep and management at a distance can be challenging.
Choosing a property
Take your time and do your research it’s an important decision, not to be taken lightly. As well as helping you find a suitable property, Homeinthesun.eu will help you to understand the crucial factors involved. We’ll provide a clear breakdown on all the relevant costs (solicitors, title deeds, etc) to ensure you understand every stage of the process and every penny that you will have to spend.
Check that it’s a clear and unhampered title
All disputes or liens over titles are registered at the land registry and it is therefore always advisable to ensure that a clear and unhampered title exists prior to entering into any commitment or signing any contract. We can guide you through this process.
Exchange contracts and pay deposit
At this point, you sign a contract for the purchase of the property, and pay any deposit required to the vendor or agent. Most agent contracts are standard but we can recommend a lawyer to advise in cases where a purchase is particularly complex. We would always recommend dealing with a Spanish or international lawyer as the laws in Spain are very different from those in the UK.
Sign escritura and final payment
Under the terms of the contract, a completion date will have been agreed. Completion involves the signing of the deed document (escritura) by both the vendor and the purchaser. Both parties must sign at the same time, in the presence of a Spanish Notary (where it not possible for both parties to be present, their lawyer(s) can be granted Power of Attorney). This will not necessarily take place at the Notary’s office in the locality of the property or in Spain, but if it is not then it may lead to delays in the registration of the title.
It is obligatory to retain three per cent of the price declared in the Title Deed in some purchases, which must be passed on to the Tax Department on behalf of the seller to cover any tax liability that they may have. This does not apply if the seller is resident in Spain. It is obligatory for a non-resident to appoint a qualified tax representative in Spain. Again, this is where we can guide you through the process.
Make intermediary payments (if applicable)
As the purchaser, you will usually be required to pay the notary cost, registration fees and transfer tax. These normally amount to about eight per cent of the total purchase price, however the general advice when purchasing property is to allow 10% of the purchase price to be used for taxes and fees.
Registration of the new title
Once the escritura has been signed by both parties and the documents have been processed by the Notary (normally 14 days), the document must be presented to the Land Registry where the new title will be registered including the new ownership, and registration fees and transfer taxes must be paid. This will take approximately two months. Again, we can guide you through this.
In principle, you can have a bank account in your country of origin, but the recommendation if you plan to buy property in Spain is that it has a branch presence in Spain not only for the purchasing of property but for the payment of utilities and local taxes as it is not possible to set these up against a non-Spanish bank account. Therefore, you will need to open a Spanish bank account and transfer funds (if required).
We recommend doing this in the early stages of purchase to ensure that any transfer of money from foreign banks will be received in good time. We will accompany you to open a suitable bank account for your transaction and help you fill out all the necessary forms to enable the currency to be transferred. If you don’t speak Spanish or your Spanish isn’t perfect don’t worry – we can help you with that too!
We collaborate closely with Mortgage Brokers and Currency Conversion providers to help you achieve the best possible rates.
There are non-resident mortgages (loans granted to persons without legal residence in Spain) available. The requirements for granting mortgages are fairly rigid with respect to the creditworthiness of the applicant, and it is the task of the lender to assess the economic capacity of the buyer.
On completion of this process, you will be asked to present a certificate to the Notary issued by a Spanish bank; this certifies the receipt of foreign currency to your Euro account, which is specific to the value of property being purchased as shown in the Escritura. The declared value will not necessarily be the total amount being paid, as the full purchase price may include items such as furnishings, which you are not required by law to include within the declared property value.
It’s important to get things right and ensure you have complete peace of mind, especially if you will not be residing in the property you purchase. We offer a ranges of services to help you during and after your property purchase.
Once you have decided on the property you want to buy and you have all the finance in place, we’ll draw up a contract between you and the seller which will outline the total price of the property and any payment dates agreed.
Escritura (Title Deeds)
The Escritura will only be signed on final payment for the property, ensuring you receive the right protection throughout the purchase process.
We’ll help you arrange the insurance you need, it is a requirement that residential property be insured for the external structure and strongly recommended that it is insured for internal contents too. If you are purchasing the property with a Spanish mortgage the structural insurance is automatically included in the mortgage. Most apartments are covered under the community insurance policy for the external structure, however separate contents insurance must still be arranged.
Annual Rates & Rubbish Collection
Annual rates and rubbish collection fees (IBI & Basura) must be paid between September and November each year. If you are purchasing a new property, you will be notified of when the first payment is to be made and must arrange payment of each one thereafter. A direct debit can be arranged for payment of IBI and Basura, we’ll help you set this up. It is important to note that fines for late payment levied, usually at a rate of 20% per annum.
All apartment blocks and complexes form a community to maintain community areas such as gardens, swimming pool and general appearance of the community. Community fees vary depending on the services provided. You should always check what the community fees cover before purchasing a property, and in most instances we will advise you on this early on in the process. However, if this information is not readily available we will help you find out what the fees are and what they include once you have decided on the property you wish to purchase.
We’ll help you make the necessary arrangements to have bills paid through your Spanish bank account as electricity and water bills are not sent to foreign addresses. This procedure will involve the completion of direct debit mandates for electricity and water companies (UNELCO & CANAL GESTION). Unlike the UK there is only one provider for each utility on the island. In addition, to the key utilities we can also help arrange a phone line and internet connection should you wish.
Annual Tax Declaration
Non-Resident Income Tax (IRNR), is a direct tax levied on income earned in Spanish territory by individuals and non-residents. If you live in Spain for more than 183 days per year, it is presumed that you are resident in Spain and therefore you will be taxed on personal income not IRNR. We will help you choose an experienced tax consultant to help you make the compulsory annual tax declaration.
Management companies will carry out this service for a reasonable monthly charge. If you are looking to holiday let your property or if you simply want peace of mind when not on the island, you should consider a using a management company. They will give you a contact on the island to deal with any problems that may arise during your absence. We’ll help you choose a reputable management company to work with.
Construction & Refurbishment
We work closely with many tradesmen in order to attend to every client’s needs, from minor repairs and electrical work to full refurbishment of your property. We can also arrange estimates for the construction of a new property and project management during your absence, giving you peace of mind.