Thinking about buying or selling a property in Gran Canaria Spain? About 17 million people go to the Canary Islands annually, with over 4.2 million choosing Gran Canaria as their vacation spot. They come for the agreeable temperatures all year long, the Atlantic Ocean with its stunning, endless sandy beaches, and the kind friendliness of the Canarios.
It is common for visitors to the Island of Eternal Spring to feel the holiday spirit and decide they want to stay longer than originally planned. This is how people from all across Europe find us when they need guidance on purchasing real estate.
Private residential property in an area of interest may be a lucrative investment for many people. Indeed, real estate prices have been on the rise for decades, and this trend is expected to continue in 2023. As with every industry, the real estate market is prone to swings, which is to be expected and seen as natural. Buying real estate is best seen as a long-term financial commitment. An investment of this nature requires a solid foundation, which is why I always recommend that my clients avoid taking on too much debt in order to purchase a second home or other vacation property. I’d like to offer a few things here on financing international real estate.
Do banks in Gran Canaria provide mortgages?
The short answer is “yes,” and the longer response elaborates
This is an option that some of our buyers want to take advantage of. The lengthy period of historically low-interest rates is, of course, an additional incentive on the path to your ideal home. We’d want to acknowledge the European Central Bank’s interest rate policy at this time.
The banks will only lend you around 60% of the projected value of the property if you do not claim Spain or Gran Canaria as your primary tax home. This implies that the financing bank will hire a valuation firm (like Tinsa) to determine how much the apartment, home, or land in question is worth. The majority of the time, the value falls far short of market pricing. Banks just want to give themselves some breathing room in case of an auction, so that they may make as much money as possible in the event of a speedy sale.
You want to buy a home in Playa del Inglés for €200,000; the bank uses an assessor to determine that the bungalow is worth €150,000; 60% of this amount, or €90,000, would be given to you. The seller is asking €200,000, therefore in this case you’ll need to put up €110,000 in equity.
Additional buying expenses, which I’ll get into shortly, can add up to a significant sum. For people that make Gran Canaria their permanent home, the local banks will often lend up to 80% of the property’s appraised worth. Your original ownership stake of €120,000 would be reduced to something closer to €80,000. In order to secure financing from a foreign bank, borrowers usually need to present additional security in the form of debt-free real estate, a guarantor, or something similar.
Before you come, feel free to contact your neighborhood financial institution. Most banking needs have been met well by Banco Santander, BBVA, and La Caixa in Gran Canaria. Considering the differences in interest rates and lending terms between banks might be beneficial.
Let’s pretend you already have the money you need or discover the perfect house without worrying about financing.
In order to acquire real estate in Gran Canaria, what paperwork must be completed in a notary’s office, and who is accountable for that?
A notarial deed of sale should always be present when making a purchase of any kind, it goes without saying. Private purchase agreements may be acceptable under the law, but they often lead to complications. In the event that your agent is accompanying you to the notary’s office, they will have prepared all paperwork in advance to facilitate a smooth acquisition. After all, you want to buy a house that is completely free of any liens or other restrictions. You’ll need a recent extract from the land registry, a certificate from the local government, and, if the apartment is part of a homeowners’ association, a certificate from the comunidad (Spanish for “community”).
The notary requires both the buyer and the seller to show photo identification. A few days after the purchase, the N.I.E. number must be sent to the notary’s office. You can get this N.I.E. number from the local authorities or the Spanish embassy in your home country.
Purchase option contracts/reservation contracts are commonly used to bridge the time gap between an agreement to purchase and the notary appointment. Deposits are typically 10% of the total price. This money is held in trust until closing, at which point it is transferred to the seller’s bank account, the notary’s office, the attorney’s office, the accountant’s office, or the real estate agency.
Your freedom of choice in selecting a notary public exists solely in your capacity as a purchaser. Here are three examples of notary public offices in Playa del Inglés: of Mr. Valentn Consejo Arranz, Mr. Jose Cháfer Rudilla, and Mrs. Blanca Fátima Varela Barja. Many clients have had great experiences with all of them throughout the years so we wholeheartedly endorse them.
Can you tell me about the hidden expenses associated with purchasing a home in Gran Canaria?
All other fees are one-time and amount to around 8.5% of the total price. The Spanish tax agency receives the bulk of it as a result of the 6.5% land transfer tax. Typically, one might expect to pay around €1,500 in notary and land register fees, and €1,000 in tax office expenditures.
If you are not a Spanish citizen and do not have a permanent Spanish residency, you will need to select a tax representative at the notary’s office. The topic of tax returns will be slightly more comprehensive and a different issue if you intend to rent out the home after the acquisition has been finalized.
To what details should you pay the most attention while looking for a home in Spain?
The island of Gran Canaria is a little continent with 14 microclimates, and it has a circumference of about 50 kilometres and an area of around 1,560 square kilometres.
So, our advice now is to learn as much as possible about the island’s many areas and communities before making a purchase.
In the winter, the north of the island, including Las Palmas, Galdár, Agaete, Santa Brigida, Tafira, or Telde, is noticeably colder and more humid than the south, including Maspalomas, Playa del Inglés, San Agustn, Meloneras, etc.
A lot of international customers love the constant sunshine and warm temperatures on the island, so it’s important to pick a good spot for the house. Check out the home you’re buying thoroughly, ideally with a specialist. Verify that the paperwork is in place and that the building is not a “black construction,” which is common for mountain fincas.
Don’t buy a home without consulting a notary first, count up all the closing fees, check over the property at different times of day, and pose any questions you have to the real estate agent. A positive emotional reaction is necessary for a successful home acquisition.
