Buyers Guide - Your Guide to Buying Property in Gran Canaria
Buying a home in Gran Canaria does not have to be a daunting process. It is
really a matter of understanding the steps and being well informed of the
legal and technical jargon. Whether it is a new build or a resale the basic
procedure is the same, just with different timescales.
Below is a brief outline of the purchase procedure, followed by other useful
information and an explanation of services necessary or available.
Find out which areas you are interested in:
Do some homework on the areas available. Browse the Internet for
information on those areas that catch your interest. The websites of the
Town Councils (Ayuntamiento) in the region you want are a good place to
start (We have link to all the Town Councils below on our website).
Also, use the Internet to make a quick search for property for sale
online, to get an idea of what properties are available in your price
bracket and where they are located.
Eventually, you’ll have to make the trip and visit the areas you are
interested in for yourself. It’s best to hire a car, get a good map and
drive around so that you can get a better feel of the areas and their
surroundings. On your way, keep a lookout for services such as shops,
schools, medical facilities etc. It is also a good idea to visit at
different times of the day and on different days to get a better idea of
traffic conditions, weather and so on.
Search for properties in your areas of interest.
You can read about the communities here:
If you don’t find what you are looking for online, you could check the
classified adverts in local newspapers and magazines or even drive
around the area looking out for ‘For Sale’ signs. Moreover, if you still
cannot seem to find the right property for you on the private market, or
if you would like to search concurrently among real estate agents in the
Canary Islands, we recommend you look at our list of trusted real estate
Handling a private sale (no agents)
Some sellers prefer not to use a real estate agent, and will attempt to sell their property themselves. They
may have had a bad experience with an agent in the past, or they’re unwilling to pay an agent’s commission.
Whatever the reason, you need to moderate your approach as a buyer:
It is easier to negotiate with a dispassionate intermediary such as an agent than with a seller who is almost
certain to be emotionally involved in the sale.
The seller may also have a more inflated view of the property’
s value, and may be reluctant to budge on price.
There are no hard and fast rules here, except to use more tact and to always explain your reasoning very clearly when negotiating price.
You should also work closely with a lawyer to ensure that all documentation is above board, and correct legal
processes are being followed. (In sales handled by an estate agent, the agent will keep an eye on this on behalf of the seller.)
By using TeamCanaria you do not need to go out and find
properties with several different brokers. We are your unbiased advisor
throughout the process, and are by your side throughout the entire
journey no matter which broker that has the property for sale. It is your safety and
security for optimal and independent property search.
Once you have found the property, the Estate Agent will often ask for a
small reservation fee, usually 3000 Euros, to take it off the market whilst
a private sale/purchase contract is drawn up. This forms part of the balance
of the deposit due.
This private contract, between buyer and seller, should contain details of
the agreed purchase price, the deposit payment, provision for payment of the
outstanding balance, any extras, e.g. furniture, the intended completion
date and all other relevant terms and conditions.
A specific clause (called an arras) may be included with a financial penalty
should either party default on the terms of the contract. In the case of the
seller they would return the deposit and forfeit an equivalent sum, i.e.
give the buyer double the deposit. If the buyer pulls out they lose the
It is important that your
lawyer/accountants checks the contract before it is
signed to ensure it protects your interests. To be legally accepted in Spain
the contract must be written in Spanish. Sometimes it is produced in dual
language but you can always ask your
lawyer/accountants for it to be translated. Always
check if there will be an additional charge for this service as it may be
more cost effective to have it translated privately.
Once the contract is signed by both parties and you have paid the deposit
there is then a binding agreement between buyer and seller. (We recommend
you to use an
to do all the paperwork)
All property sales or purchases should be registered in the Land Registry
Office in Spain. They keep details of the property and record financial
charges and other matters which may affect the Title Deed. It is important
to make sure the vendor is the legal owner of the property and any relevant
taxes or outstanding mortgage are paid before signing the new Title Deed on
the day of completion.
This information is detailed in a document called a Nota Simple, which is
ordered from the relevant Land Registry Office.
In the case of a new build, the builder must have a building license and
planning permission for the construction. Given the length of time the
planning process takes, sometimes the permissions will still be in the
application stage at the time the private contract is signed. Your
should check this and may suggest an additional clause to protect any monies
that you may have paid in the event that the license and permissions are not
To complete the purchase, the buyers, seller and their legal representatives
are required to be present at the same time to sign the Title Deed (Escritura)
in front of a Spanish Notary (Notario Publico). This person, who is a
legally trained expert, will check the documentation and identification of
all parties before it is signed.
It is at this time you will be required to pay the balance of the purchase
money and all additional taxes so if there is a Spanish mortgage involved in
the purchase then this will also be signed for in the Notary at the same
time as the Title Deed with the bank manager present. You will then be given
the keys to your new home.
You are recommended to visit the property before going to Notary to check
that everything is in order.
Once the formalities have been completed at the Notary, your
the necessary fees and taxes and present the Title Deed to the Land Registry
Office for registration. This process can run into several months before the
official stamped Title Deed (Escritura) is available to you. For this reason
you should make sure that you are given a Copia Simple of the Title Deed at
the time of signing as this is required to put all the utility bills etc.
into your name.
Power of Attorney:
If you will be unable to attend the completion it is possible to give power
of attorney to your
lawyer/accountants or another trusted person to act on your
behalf. The document, drafted by your
lawyer/accountants in Spanish, must be signed by
you in front of a Notary. You should always check what the power of attorney
allows your representative to do.
Additional expenses of buying property in Gran Canaria:
Apart from the purchase price of the property, you will also have to budget
up to a further 8-10% to cover additional fees, charges and taxes. If you
are buying a second-hand property you would have to pay a 6.5% of the
declared value within the contract as Property Transfer Tax and if you are
buying a new property, you will have to pay 7% IGIC (a reduced-rate
equivalent of VAT that applies to the Canary Islands) plus stamp tax at
There will also be notary fees, Land Registry fees, bank charges related to
obtaining your mortgage (if applicable). Notary fees are fixed with an
official scale of charges. The fees will vary according to the amount of
land, the size of the property and the price at which the property is being
sold. Generally speaking the fees will be around 0.5% of the sales price to
the notary. The
property register will be updated with the new buyer’s details once the
transfer has gone through and the charges for this will be around 0,3% of
the sales price..
Yearly expenses of the Property:
If you are buying property in Gran Canaria that forms part of a complex,
there will be a Community of Property Owners that is in charge of collecting a monthly fee to pay for the upkeep of the common areas (lifts, stairs, swimming pools,
gardens and so on). We will help you find out what this fee is beforehand, and also check if there are any outstanding dues in this regard.. - Water and electricity fees if not
included in the community costs - Property insurance
Non-resident tax - Mainly calculated in the following manner: Tax value
multiplied by 1,1%. Then you multiply the result with 24,75%. To be paid in
connection with the tax declaration that must be handed in every year,
starting from the year after the purchase.
Property tax (“Impuesto sobre Bienes Inmuebles” also known as IBI) and
garbage fees are invoiced twice a year. Garbage fee is approximately € 60 -
per year and the property tax depends on the catastral value. The exact
yearly IBI tax for a property depends on its size, which Municipality it is
in and the property type. Rates can vary from 0.4% to 0,9%.
This IBI receipt is very important because it confirms what the owners have
paid in the last year on their rates and it also provides information in
relation to the Catastro.
The IBI bill will show the property’s Catastral reference number which can
give you information on the property you are buying (this website has details of the size of the
land, the size of the property and there may also be photographs showing the
The IBI bill will also show the property’s Cadastral value as assessed by
the Hacienda (tax office) which in turn dictates your annual rates bill as
well as any possible tax due when you sell the property.
Your lawyer (prior to completion) will make sure that all IBI taxes have
been paid for the last 5 years so that there are no ongoing liabilities for
Extraordinary community costs - only if there is not enough money in the
community to make significant/necessary repairs etc. However, this might
never happen if the community has a strong economy. The costs (if any) will
be divided between all the properties in the complex.
NIE Certificate - Tax Identification Number:
Any person purchasing a property in Spain is required to obtain a tax
identification number. You will need a certified copy of your passport,
obtained from the Notary, to accompany the application form. This service
costs approximately 100 € for 1 person & 150 € for 2 persons in Spain but much more costly if
done in your country so it is worth considering making the application very
early in the process, whilst still in Spain. TeamCanaria
will advise you more about this requirement.
Spanish Bank Account:
You will have to open a Spanish bank account. The bank account is a must to
pay the community fees, water and electric bills, property tax etc. We will
help you with the paperwork. We/the
lawyer/accountants will also make sure that the
fixed expenses regarding the property will be paid automatically from your
Spanish bank account.
A valuation will be carried out by a specialist firm associated with the
bank if a Spanish mortgage has been applied for. In other cases, it is very
unusual to have a property valued. The Spanish law regulates the
responsibility of the vendor for structural defects in the property,
protecting to some extend you as the purchaser.
When you purchase a property, in Spain, it is recommended that you make a
Spanish will that is independent of the will made in your home country,
which can help avoid a great deal of trouble and expense. The will made in
your home country should be carefully worded in order to respect the terms
of your Spanish will. It is necessary to sign your will in front of a Notary
and this can be done simultaneously to signing the Title Deed on the day of
completion if prior arrangement is made with your Spanish lawyer. The cost
will be approx. 130 € per person.
When purchasing a new build, the builder should offer a bank guarantee for
all the stage payments made during the purchase. The guarantee is issued by
the bank after each payment is made. However, due to the costs of those
guarantees, some builders tend not to offer such guarantees and this can put
you at risk if the property is not completed, e.g. due to financial
difficulties faced by the builder.
Illegal building works:
In many cases when
buying a property in Gran Canaria you might find certain building
For example, a swimming pool or the closing of an open space or terrace
that has been built without a proper building permit, an extra apartment
in the basement etc….
As owner of a property in Spain with illegal building works you run the
risk of having to demolish and restore the situation as it was before.
However, there are statutes of limitation depending on which autonomous
community you live in Spain, which dictate that after a certain amount
of years these building violations are tolerated.
For example, if an illegal pool, was built in Gran Canaria, which
belongs to the Canary Islands, 4 years ago or before and you can prove
it, then the pool is tolerated and it is not at risk of being
Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice.
Laws and tax rates change over time, so this information may be out of date. Please consult a tax specialist or the tax authorities for the latest information.
There are no guarantees that this information is correct and up-to-date, so you use this information at your own risk.