Lanzarote property buyers guide

 

Lanzarote’s wonderful year round sunny weather provides a delightful place to live and can also offer an ideal location for a property investment. Popular holiday rentals are let out on average 30 weeks a year offering a good return on your purchase. Choosing the perfect property aboard can be fun but sometimes a little daunting, we at Real Estate Lanzarote can guide you through the buying process.

 

As a small family run company we offer a bespoke service. Having operated since 1989 we have a solid knowledge of Lanzarote’s property market and understand the needs of our clients. Being established for nearly 30 years we have contacts all over the island but specialise in the old town of Puerto del Carmen, please tell us what you are looking for even if you don´t see it on our website. We like to think we offer a kind guidance that will make the purchasing process clear and straight forward, we aim to go above and beyond the average estate agent service.

 

What you will need to purchase a property

In order to purchase any real estate as foreign non-residents in the Canary Islands, you will need to obtain a foreigner identification tax number, issued by the Spanish national police station (this is called a N.I.E. number). You will also need to open a local Spanish bank account in order to transfer your purchasing funds. This is worth doing on your first property visit to Lanzarote.

After you have selected a property that you are interested in buying and with our help the negotiation is completed, you will need to place a small reservation deposit prior to signing the actual sales contract. This will put the property under offer over a short time scale and stop other potential buyers taking the property. It will also give you time to select a lawyer to do all the required searches to make sure the vendors don’t have any encumbrances or unknown debts which can’t be resolved.

 

Once this has been checked the lawyer will raise a mutual sales contract for both parties to sign which includes personal information, property details, confirmation of prior reservation, purchase price and completion date. At this stage you will be asked to pay a 10% deposit, this is normally held by the lawyer representing you. The lawyer will also give approximate registration costs that normally equate to 10% of the total purchase price.

Regarding the changeover of the utility bills from the vendor to the purchaser, the lawyer will change the contracts into your name and set payments up on a direct debit. After the actual signing in the notary, the lawyers will process all the documentation through the local system to the correct office, so that the property is correctly registered into your name.


Example of buying costs(they are same for both Resident and non-Residents)

Example Purchase Price130,000.00€

Holding Deposit 1%1,300.00€

Deposit required on private purchase agreement 9%11,700.00€

Outstanding Balance on Completion (Bank Cheque required)117,000.00€

Approximate Registration Costs

1. Notary Fees550.00€

2. Land Registry Office Fees350.00€

3. Lawyers Legal Fees1,800.00€

4. Transmission Tax (Stamp Duty) 6.5% of declared value8,450.00€

5. Translation Fee60.00€

6. Bank Fees250.00€

Approximate Totals11,460.00€




A lot of property that is purchased in Lanzarote is rented out on the holiday market. This a great way get a return on your investment and also gives you the freedom to stay in the property when it suits you. Here are some generic figures of running costs to allow you to have an understanding of what income to expect on the property you intend to buy.

Average property running costs

1 Bedroom Apartment

1). Water15€ p.m

2). Electric30€ p.m

3). Property insurance15€ p.m

4). Local rates24€ p.m

5). Avg Community fees60€ p.m

Approximate total 144€ p.m x 12 =1.728€ p.a

Average rental prices:230-350€ p.w

Management costs occupied:70€ p.w

(For cleaning, laundry & client care)

Agency booking fees are normally 10% of the week rental price.

 

2- Bedroom Apartment

1). Water20€ p.m

2). Electric40€ p.m

3). Property insurance20€ p.m

4). Local rates32€ p.m

5). Avg Community fees60€ p.m

Approximate total 172€ p.m x 12 =2.064€ p.a

Average rental prices:350-470€p.w Management costs occupied:85€ p.w

(For cleaning, laundry & client care)

Agency booking fees are normally 10% of the week rental price.

2 Bedroom 2 Bathroom Bungalow

1). Water25€ p.m

2). Electric50€ p.m

3). Property insurance22€ p.m

4). Local rates40€ p.m

5). Avg Community fees60€ p.m

Approximate total 197€ p.m x 12 =2.364€ p.a

Average rental prices450-650€ p.w

Management costs occupied:120€ p.w

(For cleaning, laundry & client care)

Agency booking fees are normally 10% of the week rental price.


3+ Bedroom Villa with Swimming Pool

1). Water45€ p.m

2). Electric80€ p.m

3). Property insurance30€ p.m

4). Local rates50€ p.m

5). pool service125€ p.m

6). Garden care65€ p.m

Approximate total 395€ p.m x 12 =4.740€ p.a

Average rental prices:750-1.800€ p.w

Management costs occupied:170€ p.w

(For cleaning, laundry & client care)

Agency booking fees are normally 10% of the week rental price.

Please note:All of the above figures are given as a general and approximate guide only and no calculations are made for personal taxation liabilities from rental incomes, please seek professional advice from a fiscal accountant.

(p.w –Per Week,p.m –Per Month,p.a –Per Annum)





Our office also offers services to assist in all of your property needs as well as recommending professional services. We work with established professionals on the island that we consider to be the best and most helpful. We have included business cards or pamphlets of these services, we can also personally arrange appointments through the office.

Property Refurbishment

If you are interested in a property that you would like to refurbish Real Estate Lanzarote can take care of this for you. We work with trusted builders on the island and our in house interior designer will give the property an extra special touch. We can arrange a quote prior to purchase so you know your expenditure. This service takes the hassle out of the project especially if you are not island based.

Furniture Package

Would you like your new property to have the wow factor?Real Estate Lanzarotecan also put together furniture packages from basic to bespoke luxury. With the right tasteful pieces of furniture any space can be transformed.If you are intending to rent out a property and require it set up for this we will prepare the property with everything it may need.

Property Management

Villas Lanzarote has been working in the Lanzarote holiday market with over eighteen years of experience. They offer an array of professional services, which includes property rentals, self-catering accommodation, offering luxury villas or apartments for the best priced holidays in Lanzarote. They also cover long term rentals and commercial rentals. If you are just looking for a company to maintain your property, villa or apartment they can provide property maintenance and management.

Lawyers

We recommend ASG interconsulting, they have offices in Arrecife, Playa Blanca, Costa Teguise, Puerto del Carmen (next to our office) and Fuerteventura. They were established in 1988 and can answer any of your legal needs but they specialise in property conveyancing.

Exchange Company

If you need to bring money into Spain then it is best to use a foreign exchange company. We recommendForemost Currency Groupwho will match or beat any current exchange rate. This is also a trusted and reliable way to move money that doesn’t incur the extravagant exchange fees of a bank. James Spurway is our contact at Foremost and we find him to be very helpful and informative on the current exchange market.

 

Banks

As mentioned before you will need to open a Spanish bank account to purchase a property in Spain. You may need a mortgage to help purchase the property you are interested in, a non-resident can apply for a Spanish mortgage based on their overseas income. Generally you could look to obtaining 60% mortgage on the value of the property, the loan duration is normally about 15 years depending on age. We have a good working relationship with Sabdell Bank, they are based all over the Island. We can make an introduction and help you set up any needed accounts.

Fiscal Accountant

EBF consulting come highly recommended from many foreign clients, Natasha the owner is English and her team can help with your Spanish fiscal needs.

Insurance

After purchasing your property you will need to take out property insurance, we recommend FIA Insurance SL which are an English speaking company