Lanzarote Relocation

Archive for the ‘Property in Lanzarote’ Category

We all like to be a bit canny with our funds… saving money in one area gives you more income to splash out in another. So how can you save money on your property in Lanzarote?

Here are our top tips to start the ball rolling.

1. Negotiate the price. Don’t accept the asking price straight away – particularly in the current climate, there are always deals to be made. This applies not only to properties for sale, but also for long term rental too

2. Transfer your funds over via a specialist currency transfer company. We use HIFX (banner on right of this page). Oh how we wish we’d known about services like this when we came over! We relied on the bank rates… and actually missed out on quite a bit of saving by doing it that way.

3. Pay property tax online. When it comes to paying property tax on your new house in Spain… there is a corker of a way to save money if you are paying from the UK. Have a look at www.taxesonline.eu as the standing charge is just €29 if you just need the paperwork raising. Or just €49 if you want them to pay it on your behalf. Needless to say, you calculated tax is in addition to this.

4. Shop around. Ask around. Don’t take the first price you are quoted for things. Ask people who already live here as no doubt they have found some real bargains. We were lucky and found some good people when we moved over, that were happy for us to just pick up the phone and ask. We still ask around now!

5. Dont be scared to use local businesses too! So many people stick to just using the British and Irish, because of nerves with the language. Don’t be scared… get to know the Spanish guys down your local garage, the lady in the butchers, the fella in the fruteria. You’ll save yourself a packet… get great quality goods… make new friends… and it always helps to have a friendly face that won’t laugh when you practise your new language skills.

Of course there are many ways to save money… but these are just for starters.

Yes, we’ve been at it again – this time to discuss the merits of rent with option to buy in Lanzarote.

The Sunday Express published an article with our experiences. Unfortunately they got one of the links at the end wrong… and also said that Lanzarote was the Southernmost Island in the Canaries, but the thought was there.

Click the image to see full size. Enjoy!

The correct links at the bottom of the article should have been:

www.gandy-draper.com

www.playablancaproperty.com

You can also view the article on the Express website by clicking HERE

Since this article was written… The Sunday Express and Daily Express amended the details on the web… we would like to publicly thank them for their prompt attention.

The information below is not intended as a comprehensive guide to purchasing. You are strongly advised to use the services of a Spanish lawyer based in Lanzarote who speaks your language. Good legal advice will ensure the safety of your investment.

First Steps

As there is a wide variety of property for sale in Lanzarote, it pays to give some thought to the type of property you are looking for. Whether you are looking for an apartment for sale in Puerto del Carmen or a luxury Lanzarote villa, do spend time getting to know the area(s) before you take the plunge. A good agent should listen to your requirements and advise you of your options when choosing your Lanzarote property. If you are planning a visit to the island, contact agents in advance. That way you can spend your precious time here on the island viewing properties that best match your requirements. When budgeting, remember to allow approximately 10% on top of the purchase price to cover stamp duty and all the legal costs involved in buying property.

Finance – the key to negotiating a better price

If you don’t need finance or you have a pre-arranged mortgage, congratulations! You will have a distinct negotiating advantage when it comes to settling a price. If you do require a mortgage, but have not yet arranged a loan, we recommend you do so before viewing property. Essentially you have two options: obtain the loan in your home country (if you are a non-resident) by remortgaging your existing house, or apply for a mortgage on the house you intend to buy with one of the Spanish banks here on the island (both residents and non-residents).

Spanish banks’ lending criteria:

• Recent bank statements
• Last three pay slips
• Your last tax return, or if you are a resident your Spanish Tax Declaration (IRPF) for the last financial year
• Letter of reference from your bank manager and/or employer.
• Passport / Residence permit / Spanish Identity Card of applicants.
• Proof of other income, if applicable.
• Declaration deed for new building from developer (new building)
• Property deeds of the current owner (second hand home)
• Private sale-purchase contract or letter containing offer.

In the case of self-employed or independent professionals:

• Proof of income tax payments made during the current financial year and declaration of assets and accounts for the last three years
• N.I.E. (Foreign Resident’s Number)

Terms vary, but as a guideline non-residents can borrow up to a maximum of 70% and residents up to 80% of the purchase price or bank’s valuation (whichever is lower).

Once you have agreed a selling price with the vendor, the next step begins the conveyance and at this stage we recommend you use a lawyer.

Legalities:

1. Title search:

Your lawyer will investigate the Escritura (Title Deed) for the property you wish to buy and will carry out the local Land Registry Search (Nota Simple). This is to make sure that everything is in order, for example that the sellers are indeed the lawful owners and that there are no charges, encumbrances or legal problems with the property. Mortgages in Spain differ from those in the U.K. and Ireland in that they are levied on the property, not on the person who owns the property. This means it is important to check that the property you buy is free of outstanding debts and mortgages before you sign for the property.

2. Exchange contracts:

As soon as your lawyer confirms that everything is legally in order, usually a deposit contract is drawn up between you and the vendor. This states the conditions of the transaction, identifies the property and the parties involved, as well as the deadline for completion. It will state if the property is being sold furnished or unfurnished. If the property is being sold furnished, it is advisable to include an inventory signed by both you and your vendor. Once the contract is drafted and both parties sign, normally you transfer 10% of the sales price to your vendor (or to your lawyer, who will then pass the money on) and you have entered into a contract which is regulated by the Spanish government. If you change your mind after this stage and decide not to buy, you will lose your deposit. If the seller fails to sell after this stage, they will be forced to repay your 10% deposit back to you, with the same amount again as compensation. The law on deposit contracts is regulated by the Spanish Civil Code, and is designed to prevent gazumping.

Completion:

Your new title deed will be signed by you (or your lawyer if you have granted power of attorney) in front of a Spanish notary and the outstanding amount will be paid over to the vendor. Before this happens, the notary will require the vendor to provide evidence that municipal rates are paid up to date. In addition to the purchase price, you will need to pay notary costs, Land Registry fees, Impuesto sobre Transferencias Patrimoniales – Transfer taxes (stamp duty), lawyer’s fees and legal costs, as well as several minor taxes including the Plus Valía, which is a land appreciation tax paid to the local municipality. There will be a minor cost for verbal translation of the deeds into your language before signing. Utilities bills will be transferred to your name and direct debits will be set up to pay future bills. The same applies for telephone (if relevant) and the community charge, if your property is on a complex with a community of owners.

After completion:

Your lawyer will finalize the paperwork by submitting the deed to the Land Registry. Your registered deed which is your proof of ownership and should be kept in a safe place. The entire process from signing in the notary’s office to receiving your registered deed takes up to 2 months, but you are entitled to receive a Copia Simple (preliminary copy of the deed before it is presented in the Land Registry) within 2 – 3 days of signing. All that is left is for you to enjoy your property and make the most of the Lanzarote lifestyle.

A very big thank you to Lanzarote Properties for this informative article. If you have an article that you would like us to consider for this website, then simply let us know via the contact page on this website.

Paying the annual taxes on your property in Spain is usually done by your asesoria or legal representative, and can cost a fair amount of money to process  – usually in excess of €100 each year. Read the rest of this entry »

Getting a mortgage in Lanzarote can be a tricky business at the moment,w ith the current economic climate. Our thanks go to Nicola from RH Lanz for this informative article.
Read the rest of this entry »

If you are looking to rent a property in Lanzarote, then you will be required to sign a rental agreement.

Following here are some standard terms of a rental agreement in Spain, kindly provided by Nicola from RH Lanz. Thanks Nic!

Read the rest of this entry »

Sadly, Lanzarote, and indeed the whole of the world is in the middle of a credit crunch at the moment. So unfortunately, some homes are being repossessed. So what happens if you find yourself in this position in Lanzarote?

Read the rest of this entry »

As a long and a short term option renting a property in Lanzarote has many plus points.

For the new resident to the island it is advisable. Many people arrive feeling confident that they know where they want to be and what they want in a property. This can change dramatically a few months or even weeks down the line, to commit to a hefty purchase during the very early stages of your Lanzarote life could prove to be a costly mistake. Read the rest of this entry »

Many people in Lanzarote have purchased a property that they will let on a long term basis to pay the mortgage… or simply to keep occupied. However, and age-old problem is when tenants stop paying the rent. An understandable first reaction is to physically evict said tenants by shutting of water and electric, changing the locks, or worse… but that can leave the landlord open to prosecution which can often result in a hefty court bill – and even compensation to the ar*eholes who weren’t paying their rent in the first place. So what can you do? Read the rest of this entry »

If you are looking to extend your property in Lanzarote, build a wall, convert your terrace etc… you may enlist the services of a Spanish Building Company. There are many terms which may leave you a little baffled – even if you are just nipping around to your local hardware store. Benjamin Ritter from Denia in Spain, has very kindly donated the following translations which may help you get through the language barrier. Thanks Benjamin! Read the rest of this entry »