Process of Buying a house in Lanzarote

The basic process of buying a house in Lanzarote, any Canary Island or Spain is very similar.

Each purchase can have its own peculiarities for which a lawyer is recommended, especially if you are buying with no mortgage. Mortgage purchases are often double checked by a member of the banks staff.

Purchase stage 1:Decide the use of the house.
Will it be just for your own use, for friends and family as well or to create an income via holiday rentals. The do the maths on income versus outgoings plus any unforeseen costs or damages.

Purchase stage 2: Setting your budget.
If you need a mortgage then first talk to your bank manager and get an idea of what they are willing to lend you. Often this can be linked to the valuation of the property you want. If you are a cash buyer remember the legal fees, taxes and other costs normally come to around ten per cent of the house price.

Purchase stage 3: Where in Lanzarote to buy.
To decide on where to buy you need to get to know the island and your reasons to buy. If you have a small budget and what to get a holiday rental return then one of the three main tourist resorts would be best. The main tourist destinations are Puerto del Carmen, Costa Teguise and Playa Blanca. These locations can also be good if you do not speak much Spanish or want everything within walking distance. For a more traditional Lanzarote feel there is plenty to chose from. Some standout locations could be Haria, Teguise, Asomada, Yaiza, but there are plenty more. If you want to be by the sea then there is Famara for water sport enthusiasts, Orzola, Arrieta, Charco de Palo (for naturists), La Santa, El Golfo and many more. Lanzarote is a diverse and beautiful island and there is no substitute to seeing it for yourself.

Purchase stage 4: Finding your house.
Decisions that need to be made first are location. size and amenities. You should know by now to what use it will be put and this will also influence where and what your new property in the Canary Islands will be.
Many people argue that location is the single most important criteria, you can change the property but not where it is.
Shortlist the areas you like, go back at different times of day and check for noise, neighbours etc. Look at local amenities and access.
The best place to start your search is the internet. You can get a feel for the market here, what the average prices are for a given property in your areas of interest.
Contact the estate agents of your favourite houses and arrange viewings. Keep notes and score each property. The agents want to help so ask lots of questions, what community charges are, local IBI costs etc.

Purchase stage 5: Making the purchase.
Once you have found the property you want to buy its time to complete the purchase. If you are a European resident you are entitled to live and work in Spain, and buy a property. Firstly you will need to become a resident. This is not too complex, there are a number of experts you can contact to help you through this.
The house buying system is different to the UK and is a notary based system. A notary is an appointed official paid to witness transactions of this type, check documents are in order and sign off on the completion and exchange of contracts. They assist but do not replace a solicitor. They do not make complex property searches, check for debt etc. Notaries check the papers presented to them.
Once the money is organised, certified checks created, contracts and property deeds organised both the purchaser and seller go to the notary. A member of the bank will go if a mortgage is necessary, your solicitor will go and a translator will be there if needed. You will all go in front of the notary, he/she will read through the papers check for accuracy and if all is well sign or notarise things. Cheques will be exchanged and the property purchase complete. You will then have around one month to pay taxes and other fees.

Purchase stage 6: Once you own your new house
There are a number of fees and taxes to pay. The biggest on resale property is ITP (Impuesto sovre Transmisiones Patrimoniales) in the Canaries this is 6.5%. For new property the tax is around 7% in the Canary Islands. Legal fees from your lawyer are normally around 1%, agree the fee beforehand. Notary fees range from .5% to 1%. Land registry fees around 1%.
Then you will need to get your amenities connected and in your name. For phones contact telefonica, for water Canal Gestion de Lanzarote and Electricity is Endesa.