Buying Property on the Canary Isles
The Canary Islands have been popular holiday destinations and property buying locations for Brits for many years now. With a good year round sub-tropical climate it is reckoned that investment properties can be filled for 80 per cent of the year if they are in the right position. There are different geographies and climates among the islands to give some diversity for visitors and there are plenty of real estate agents ready to sell you your own little part of paradise.
Information About the Canary Isles
Although a part of Spain, the Canary Isles are a lot further south of the mainland, just over a hundred kilometres out in the Atlantic, much closer to the coasts of Morocco and Western Sahara than Spain itself. The islands also have a degree of autonomy which allows them to set their own taxation regimes, making them an attractive bolt-hole for many ex-patriots from all over Europe.The islands in the group are mostly volcanic in origin and the climates vary according to their position and whether they have natural sources of fresh water. The Canary Isles are composed of seven major islands and a number of other smaller islands and islets. The two main destinations for UK holidaymakers and property buyers are Tenerife and Gran Canaria, which have fresh water and therefore relatively lush vegetation and high mountains, which attract a mild amount of rain.
The other two major destinations are Fuerteventura and Lanzarote which are more barren and windswept. As well as having few natural fresh water sources, because of their orientation with regard to the north-easterly trade winds keeps whatever vegetation that does grow down to a minimum size. This, however, makes them ideal for wind and water sports such as yachting, windsurfing, kite-surfing and many others, and Fuerteventura in particular has hosted many major water sport competitions.
Property Buying Process Information
The property buying process is fairly straightforward and a solicitor is not strictly necessary, although you would be well advised to get one if you are not a fluent Spanish speaker. If you are borrowing money from a bank in the islands to purchase a property then the bank will do a lot to make sure the purchase is all done properly.Once a price has been agreed a 'nota simple' can be obtained from the Property Registration office that will show any outstanding debt on the property. Then the identity of the seller should be checked against that of the owner show on the 'nota simple' as this prevents deception by fraudulent sellers. After this you will usually be asked for a small deposit as a mark of good faith.
Checks should then be made to ensure that all community taxes and charges have been paid. This includes those paid direct to the local council and any charges paid en mass, as is the case with an apartment in a block. A solicitor may well be useful in checking these details satisfactorily.
Once all the checks are made the notary's office will use the 'nota simple' as the basis of a formal contract of sale. The buyer of the property will agree with the seller at this point who is to pay all the various charges relating to the sale, which might differ according to customs on the different islands. As a general rule of thumb, these various charges will add up to between ten to fourteen per cent of the price of the property. A ten per cent deposit is payable at this point, the rest on completion about a month to six weeks later.
The Canary Islands are politically part of the EU but not economically, so you will be asked to pay IGIC (Capital Transfer Tax) rather than VAT at the point of completion, which is 5% for a new property and 6% for a resale property. You may be asked to under-declare the cost of a resale property to the Property Register in order to avoid taxes but there is a risk and it is born by the buyer, so this should be avoided at all costs.
