Buying Costs for Property in Lanzarote

1) Once you have chosen a property to purchase you need to complete your Booking Form and return to us together with the Documentation requested in the accompanying Document Checklist. You will also have to provide us with a Booking Fee of €3000 which is utilised as follows:

Item	Name	Description	Cost
1	Booking Fee	Payable to the Broker/Developer. Refundable upon Completion	€1,000.00
2	Bank Account	Covers the costs relating to opening your Personal Bank Account	€250.00
3	Valuation	Standard Report & Valuation required on all properties	€500.00
4	Notary	All documentation must be Notarised by an Official Public Notary	€400.00
5	Translator	Covers the cost of a Government Appointment Translator	€350.00
6	Filing	All files have to be checked for errors prior to submission to Bank	€250.00
7	Admin	Covers the general administrative costs in relation to the purchase	€250.00
		Total Initial Cost	€3,000.00
		Additional Costs Relating to your Purchase
8	Tax	Currently charged at the Rate of 6.5% of the Purchase Price
9	Land Registry	0.75% of the Purchase Price
10	Incidentals	2.75% of the Purchase Price

 
2) Contract duration is generally 3-6 months but any time-frame may be mutually agreed between the parties and stipulated in the contract. Before the optional contract expires we will arrange for both parties and/or their legal representatives to attend before the Notary for signing of the legal documents and title deeds. Prior to this, funds must be made readily available for withdrawal from your non-resident account; sufficient to cover the full purchase price plus additional closing costs of approximately 8% (10% where a mortgage is involved). At that meeting the balance of the full purchase price is paid to the Vendor by way of Certified Cheque, Bank Draft or Bank Transfer, we will guide you through this process. Where the vendor is a Spanish Company, Spanish citizen or resident, a certificate of receipt of foreign exchange import/non-resident funds is required, and this is obtained from the paying bank following the completion of the transfer of funds).

3) The closing costs (excluding mortgage costs) are approximately as follows:
6 ½ % sales tax
0.75 % land registry - registration costs and notary charges
2.75% incidentals

4) In the case of a mortgage being raised, the bank will advise you of the total funds required for completion. Those funds would include loan arrangement fee, mortgage registration etc., thus bringing the costs closer to 10% of total purchase price. Should you require a mortgage we can help you locate a suitable bank.

5) We will carry out a basic property search at the Land registry and Town Hall, and Community Administration office, to verify that the property is free of debt including rates, and community fees where applicable.

6) If you are not resident in Spain, we will assist you in opening the required "Non-Resident" account at a bank of your choice, and application for mortgage if required.

7) Non-residents must have a foreigner's identification number (NIE), and should you proceed we will put you in contact with somebody who will process this requirement on your behalf (fee per NIE is approximately €120)

8) The title deeds and legal documents will be in Spanish and so it is obligatory for non-Spanish speakers to use the services of a sworn translator at the notary office - either we or your solicitor will arrange for this.

9) When the vendor is not a Fiscal (Tax) Resident 3% of the purchase price as per the title deeds will be retained (form 211) and within one month must be paid to the Spanish public tax authorities (Tesorería Publica). This retention applies only to properties that were entered into the land registry after 31.12.1986. It is considered a payment on account of capital gains (current rate is 18% on the gain for non-residents and for foreign residents alike). After completion of the sale a balancing tax return (form 212) can be submitted by an accountant / Gestor on your behalf.

10) In the months after completion, the PLUS VALÍA will become payable. This is a once off payment of a tax imposed on the land; the tax amount is based on the increase in the land's rateable value (valor catastral) since the last time it was sold In Lanzarote, it is often stipulated in the private contract that the purchaser will pay the Plus Valía even though Spanish Law obliges the Vendor to pay it - the title deeds will reflect any such private agreement, but will state that in such case that the purchaser does not pay, the tax office will see payment form the vendor - leaving the vendor to pursue the purchaser through the legal system. An estimate of the Plus Valía amount can be obtained once the completion date is known. However, in the event that a developer is selling the property, no such private agreement can be made - the developer must pay the plus valía.

11) While we at Belgravia Consultants provide a comprehensive service to the purchaser, our fee is usually agreed to and paid by the vendor. We recommend that anybody purchasing property should use the services of an independent solicitor to take care of conveyance on your behalf; this would include all the legally required paperwork involved in registering your new property at the LAND REGISTRY OFFICE. Some solicitors charge a percentage fee; others charge a flat rate fee at present circa €1,600. We can facilitate you with a list of names of reputable, experienced, English-speaking solicitors on the island (we do not accept fees or commissions from solicitors or other service providers and recommend them solely on the basis of their good reputation).

12) It is worth noting that purchasers in Lanzarote generally do not request a technical survey of property. However, if desired, a certified survey can be arranged by a registered quantity surveyor (aparejador). The valuation carried out on Bank instruction for the purposes of a mortgage, is not an engineers report.