Buying Guide Details

Buying Property on La Palma

Overview

Property on La Palma is cheap, relative to the other islands: for property buyers who don’t mind the comparative lack of infrastructure, this lovely, historic island would make a secluded, picturesque home.

Along with La Gomera and El Hierro, La Palma is among the least visited of the Canaries. It is, however, known as the ‘Green Pearl of the Atlantic’ and ‘La Isla Bonita’ (‘The Beautiful Island’) due to its lush woodlands and pretty mountain scenery. The island is dominated by the spectacular Caldera de Taburiente, one of the world’s largest volcanic craters.

Santa Cruz de la Palma on the eastern seaboard is the capital, once a major port but now a quiet and well-preserved colonial town with some modern buildings as well as the traditional whitewashed properties. Along the west coast, Los Llanos is the island’s second largest town and well positioned for the Valley of Aridane, a lush and popular second-home location – popular, that is, by La Palma standards, as there are actually relatively few property buyers at present.

The Process of Buying Property on La Palma

Anyone wishing to buy (or sell) a property on La Palma 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 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 buyer
If a property on La Palma is purchased 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 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 on La Palma
Taxes payable depend on whether the property on La Palma being purchased is new-build or resale. Currently, transfer tax of around 7% is applied on resales, which includes stamp duty. For new-build property on La Palma, 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 buyer is purchasing land or commercial property on La Palma rather than residential property on LaPalma, 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

Getting there

There are only charter flights direct to La Palma from the UK. Scheduled flights will require stopping off elsewhere in Spain.