PadsAbroad has compiled this guide on the property buying process in the canary islands. We are constantly working on offering you the best possible choice of properties in the Canary Islands. As you form your first impression of our properties mostly by looking at our website, it is important for us that you get a picture as close to reality as possible from our photos and descriptions of the properties on our listings. Once you find your own dream home on our website, you visit your future property in the Canary Islands, and rest assured we strive to find the best possible price for you for the given property.
So what happens next once you have chosen your dream home! The Buying Process in the Canary Islands
The deal is sealed by completing a pre-contract (opción de compra). This is drafted by either the seller or the agent and will always be in Spanish.
However it is possible to have an English translation as well if you need one. If there is to be a mortgage on the property then the mortgage holder or holder’s names will have to be on the contract. This means that if a husband and wife or two friends take out a joint mortgage then the property will have to be in both names and not just one.
The “opción de compra” is a legally binding contract. The document includes information such as a full description of the property, the purchase price with a breakdown of who will be paying what fees. The deposit for the home is most often 10% of the sales price which forms part of the final purchase amount. By calculating the total of your expenses related to the purchase, you must factor into your budget the additional costs such as property taxes and legal fees. The property land tax is 6.5% for used properties and 5.5% for new properties. Legal fees, notary and property registration fees will have to be added, although these are not set prices, they will vary according to the purchase price of the home.
As a general rule, all these purchase-related costs should not exceed 10% of the purchase price of your property, unless the price is below €80.000 euros. In some of these cases, the total costs could be higher than 10%, as some costs are fixed costs, so for smaller value properties they are proportionally higher.
Obtaining a Mortgage in the Canary Islands
In case you require a mortgage, please keep in mind that Spanish banks will usually only lend a maximum of 50-70% of the purchase price to non-residents and do not cover the additional costs related to the purchase.
Once at this stage, agreement signed, mortgage assured, the total funds need to be in the buyer´s Spanish Bank account by the date set for completion.
If the buyer cannot be there for the signing of the final paperwork it is possible to ask a trusted person, for example his lawyer to be their representative at the purchase by a power of attorney (poder).
This will authorise them to act on the buyers behalf. The final deed of sale (Escritura) will be signed by the buyer (or their representative), the notary and the vendor. Once the paperwork is signed and witnessed it is then time to pay all sums owing for the property, the taxes and the land registry fees.
Choosing A Lawyer for purchase in the Canary Islands and final Steps
It is advised that lawyers from the Island are chosen to undertake all your legal work.Simply for the convenience and because they are aware of small details relevant to that particular Island.
The lawyer will send all the relevant paperwork to the land registry for the change of ownership, also name changes will take place at tax authority, the local town hall for tax purposes, the electricity, water companies as well as with the community of owners. The new deeds can be collected within about two months from the signing. Then all that is left is for you is to enjoy your newly found home on the Canary Islands!