MAKE AN OFFER
The buyer makes his offer via the real estate agent who contacts the seller immediately. Normally the buyer can expect an answer quite quickly. If the seller declines the offer, the agent must enter into negotiations in order to hopefully reach a price agreement.
The reservation amount will normally be 10% of the purchase price, depending on the length of the reservation period. This is a bargaining issue, but the owner ultimately decides how much he will accept to take the property off the market. The amount must normally be paid to a lawyer's client account or to a real estate account.
The property will be checked for all kinds of liens/encumbrances before the buyer transfers the reservation amount.
It is also possible to sign directly at the notary without a reservation contract. However, there is a risk that the owner might sell it to a third party without any notice.
We will help you in every step of the process. Make sure that you can spare us a couple of hours while you´re on the island to do the paperwork. If you decide to buy a property after you return to your home country, this can easily be done by signing a power of attorney over there. Accurate instructions for signatures and stamps will be given to you in advance to make sure that the document is valid in Spain.
You will need a NIE number (Spanish tax number) and a Spanish bank account. The NIE number is necessary for tax matters in Spain and the bank account is a must to pay the community fees, water, electric bills, property tax etc. Your representative on Gran Canaria will make sure that the fixed expenses regarding the property will be paid automatically from your Spanish bank account. You will get help with all these necessary steps to complete the purchase.
TRANSFER OF THE REMAINING AMOUNT
The rest amount and purchase costs must be available on your attorney's client account in Gran Canaria no later than the day before the signing of the deed, since a bank check must be prepared for the seller prior to the notary meeting. If the payment is to take place in a currency other than "euros" and therefore should be sent directly to the seller's account in his home country, an amount corresponding to the buyer's and seller's costs will have to be sent to the lawyer's client account prior to the notary meeting. The seller's settlement (minus the selling costs) must in such cases be transferred directly to the seller's account in his home country during the notary meeting. A receipt for the transfer must be presented to the notary before the title deed is approved.
The title deed will be signed by the buyer and the seller at the notary (or by their legal representatives). The seller will receive the money for the sale and the buyer will receive the keys. Legally the property now belongs to the buyer.
REGISTRATION OF THE DEED
Immediately after the signing of the public deed in the notary, the deed will be sent off to the property register for registration. This can take 4-6 weeks, depending on their workload.
YEARLY EXPENSES OF THE PROPERTY
- You must expect about 8-10% of the purchase price in additional costs (for first-hand property sales: about 10-12%). If you buy with a Spanish mortgage, the percentage can be slightly higher.
- 6,5% transfer tax to state.
- 800 - 2000 euros in notary fees (for low-priced properties you pay even less. You will get a receipt for the cost and the rest will be transferred to your Spanish bank account).
- 600 - 1500 euros in registration fees (same as above).
- Legal representative fees.
- Community expenses each month if such apply.
- Water and electricity if not included in the community fees.
- Property tax and garbage fees are invoiced twice a year. Garbage fee is apx 60 euros per year and the property tax depends on the cadastral value.
- Non-resident tax for own use - Mainly calculated in the following manner: Tax value multiplied by 2%. Then you multiply the result with 19%. Example: If the tax value is 50 000 euros, the yearly non-resident tax will be 190 euros. These percentages apply for residents of the EU, Iceland, Norway and for the time being Great Britain - The non-resident tax is to be paid when handing in the yearly tax declaration, starting from the year after the purchase. Fees to the tax representative will also apply.
- Rentals - If you are a resident in the previously mentioned countries and rent out your property in Gran Canaria, you must as a rule pay income tax of 19%. For short term rentals you normally also pay Spanish VAT (IGIC). However, there are exemptions if 1 person or a married couple who owns 1 property earns under 30.000 euros a year in rental income. Contact your tax advisor.
- Property insurance. The premium depends on the values you want to insure, the size of your property, the general conditions of the insurance policy and which insurance company you choose.
- Extraordinary community costs (Not a regular expense, but might be necessary in some cases for major repairs etc. Must be approved by the community and divided between the owners.)