Buying Guide Details

Buying Property in the Canary Islands

Overview

The Canary Islands have been very popular with overseas property buyers since the early days of the package holiday in the 1960s. Having had a taste of the terrific climate, stunning beaches and spectacular scenery that these two island groups have to offer, holidaymakers became property owners with their own summer getaway or retirement property.

Property buyers and investors are attracted to the Canary Islands by a fantastic year-round climate and a great range of properties in the Canary Islands that are generally less expensive than the equivalent on some of Spain’s most popular costas. Though prices are generally on the high side for Spain as a whole, there’s a huge choice of properties in the Canary Islands for most budgets.

Where to buy property in the Canary Islands (Islas Canarias)

Located off the coast of northern Africa, seven major islands comprise the Canaries: Gran Canaria, Tenerife, Lanzarote, Fuerteventura, La Palma, La Gomera and El Hierro. Flights to this island group, the most southerly point of Europe, take around four hours from the UK, though some of the islands can only be reached by connecting air and sea services.

Prices of property in the Canary Islands have been dictated by the region’s desirability as a tourist destination and growing restrictions on new developments – a limited supply of properties and high demand pushing up the value of existing properties. Most of the islands benefit from decent facilities in health and education, including international schools, and English is widely spoken.

Golf property in the Canary Islands is very popular due to the year-round playing conditions provided by the excellent weather – even in winter, temperatures rarely fall below 18˚C. There’s a healthy re-sale market of traditional and modern properties. As is often the case, prices of property in the Canary Islands are generally cheaper inland than they are on the coasts – but all the islands are small enough that the beach is never far away.

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The Proces of Buying Property in the Canary Islands

Anyone wishing to buy (or sell) a property in the Canary Islands must first obtain from the state – in person – a fiscal number for foreigners known as NIE (numero de identificacion de extranjeros)
Once the property buyer has received the NIE number, the property buyer’s lawyers can make an offer on their behalf. When a price has been agreed, it is recommended that both parties sign a preliminary agreement which outlines details such as the completion date
A deposit of 10% is the normal amount placed to secure the deal. After this, if the property buyer pulls out they lose the full deposit but, should the seller decide not to go ahead, he/she must return double the amount of the deposit – i.e. 20% – to the property buyer
If buying property in the Canary Islands off-plan, it is usual for payments to be broken into stages, the balance being paid when construction finishes
On completion, when all the necessary checks have been carried out, both parties sign the escritura (title deeds) in the presence of a notary. The property buyer then pays the balance, plus all other fees and taxes. Copies of the deeds are sent to the Land Registry and the tax office.

Homes Overseas Property Club

Homes Overseas has joined forces with a collection of IFA specialists to form the Homes Overseas Property Club (HOPC), designed for existing and prospective overseas property homeowners.

The Club – which has access to international lawyers in no fewer than 43 different countries - has been set up in order to guide people through some of the various issues relating to buying and maintaining a property overseas. It offers advice on a range of topics, including financial, legal, insurance, taxation, property management and foreign currency matters.

For further information please telephone 0845 838 7142 or email info@homesoverseaspropertyclub.com

Fees & Taxes

Taxes and fees usually amount to around 10% of the total purchase price of the property in the Canary Islands
Taxes payable depend on whether the property in the Canary Islands being purchased is new-build or resale. Currently, transfer tax of around 7% is applied on resales, which includes stamp duty. For new-build properties, VAT (IVA) of 7% is payable in addition to 1% stamp duty
On top of this there is also plusvalia (capital gains tax), which is set by the local authorities and depends on the area concerned and the amount of profit being made on the sale. This is usually paid by the seller
If the property buyer is purchasing land or commercial property in the Canary Islands rather than residential, VAT is 16% as opposed to 7%. Stamp duty remains the same
Most Spanish lawyers charge around 1% of the final purchase price, and notary fees are around 0.5%
Agents’ fees can vary anywhere between 2% and 15% – so be careful not to be ripped off

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