Buying a property in Lanzarote

If you are considering purchasing property in Lanzarote, we think you should consider the following questions:

Playa Grande Puerto del Carmen

Why?
Is the property for you to use, is it purely an investment property to holiday or long term rent or are you buying it to live here?

Where?
If you are buying an investment property to rent you should consider the tourist areas, for maximum rental potential. If you are buying for your own use, do you want a holiday property or something more residential? Have you considered rural areas for example?

When?
Are you looking to purchase now, maybe buy something off plan, or looking for some time in the future?

How?
Do you have the funds available to buy outright or are you going to require a mortgage or are you waiting to sell another property? You will need a minimum deposit of 30-40% of the purchase price to cover the deposit and costs, a non resident mortgage is usually up to 70% of the sales price / valuation and a resident 80%.

Choosing the property
Once you have viewed a selection of properties and narrowed it down to a shortlist of 1 or 2 then you need to take a closer look at the area, community, noise level etc. It may be wise to revisit the property at a different time of day if you are unsure of the location. There are strict building regulations on the island and if you are planning to extend or add a swimming pool it would be advisable to check with the local Ayuntamiento that the necessary licences will be authorised.

Reserving a property
Unlike the UK it is normal to pay a deposit of 10% of the purchase price to reserve a property. Normally you will pay an initial deposit to reserve a property and the balance of the 10% within 14 days.

NIF
You cannot purchase a property without an NIE/F number. Once you have decided on a property to purchase and have reserved it, you will need to visit the police station in Arrecife for a NIE/F number. If you are moving to the island, you should apply for residencia as you will be offered up to 80% mortgage terms and capital gains tax advantages. If you are not sure about the residencia, please take financial advice in the UK as to your personal circumstances.

Bank Account & Mortgage
You will need a bank account to own a property in Lanzarote, they are easy to open and just require your passport and NIE/F number.

If you require a mortgage on the property you need to decide which bank is the right one for you, some of them are better at languages, or have more branches, better interest rates or no fees to pay off lump sums. A resident can have up to 80% of the sales price and a non-resident can have up to 70%. Most banks offer quotations and approval subject to valuation in around 24 hours unless more information is required. Once the bank has approved your mortgage, they will request a valuation report, which compares your property to similar ones in the surrounding area, this gives the bank an indication of the value and condition of the property. You pay for this as part of your purchase costs but will be given a copy for your information too.

Laywer
Although you can purchase a property without a lawyer, we strongly recommend that you do use one to check that the property has legal title and is free of debt. Normally within 2 weeks, your lawyer or agent will draw up a purchase contract for both parties to sign. This contract confirms the buyer and seller, the price agreed, the deposit paid, the property details, a completion date and provides protection to either side if one defaults. The standard term is that if the vendor defaults they have to refund double the amount of deposit paid and if the purchaser defaults they lose their deposit paid. Once this contact has been signed and exchanged, the 10% deposit is paid to the vendor pending the completion of the notary. This is a great system and although not 100% guaranteed, there are few sales that don't complete after this point.

Foreign Currency Transfers
If you are transferring a considerable amount of money from the UK for your purchase we would advise you to watch the exchange rates and transfer accordingly to reach an optimum price for your sterling. There are now many reputable international currency brokers that you can set an agreement with to transfer funds at a predetermined rate or alternatively your own bank in the UK can arrange an international money transfer.


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On average a sale is completed in 4-6 weeks unless otherwise specified. Normally the NIE/F number, bank account and lawyer will be completed whilst you are still in Lanzarote, you may need to send information from the UK for your mortgage application such as proof of income and a credit report/rating. Once the mortgage has been approved and the valuation report received, the notary can be booked to sign after 5 working days. At this point you should have transferred the balance funds so that they will have cleared on your local account in time for the signing.

Notary day
Whilst you may be nervous at the thought of attending a Notary, these can quite often be a long wait and a bit of an anti climax! It's normally an early start on the day and your estate agent may accompany you as well as your lawyer to the designated notary. You normally need to go to the bank first to sign the mortgage papers and authorise the payments for the notary. From the bank you head to the notary where you have to provide your identification which is your passport and NIE/F or residencia, the notary will then prepare your escritura for the property and mortgage if required. Once the paperwork is ready you will be taken by an official translator to have the escritura and mortgage details read to you in English - this is your opportunity to ask any questions. Once you have checked and agreed these documents you are normally waiting for the bank manager to arrive with the money! You can be waiting a few hours in the Notary, we would advise you to take a drink and food if you think you will need it and something to keep any accompanying children amused. The actual procedure in front of the Notary takes approximately 15 minutes where they read the escritura aloud in Spanish and both parties sign the documents including your translator. You will need to pay the translator at the Notary so make sure that you have extra cash towards your costs with you. Although the keys are normally exchanged on this day you don't actually own the property until the sale is registered and the taxes paid.

What happens next?
A week after the Notary your escritura will be available to collect from the Notary which your bank or your lawyer will do along with paying the purchase tax of 6.5% to the Registro de la Propiedad in Arrecife. Your laywer will contact the services and community to transfer the water, electric and community charges to your details.


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