1. Why buy in Lanzarote?
Lanzarote, a Canary Island gem, has a lot to offer.
This volcanic island has a unique combination of natural beauty, economic opportunity and lifestyle advantages that make it an increasingly popular destination for property buyers. Lanzarote properties are known for their unique construction and often don’t need a structural survey as they are so simple.
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2. Benefits of Owning a Property in Lanzarote
Buying in Lanzarote can be financially rewarding due to the market’s resilience, growth and lower interest rates than other European destinations. The potential for rental income from year round tourism is a big draw, a steady income stream to offset costs or make a profit.
Beyond finances, owning in Lanzarote means immersion in the island’s unique culture and lifestyle. The architecture influenced by César Manrique blends seamlessly with the volcanic landscape, making property ownership a truly enriching experience.
- Lanzarote property buying is a good investment, lower interest rates and growing tourist market.
- Owning in Lanzarote can give you a long term income stream through rentals.
- The island’s unique architecture and natural beauty make it a great place to own.
I have been helping clients for many years in Lanzarote and I have seen the island become more and more popular with northern Europeans. Maybe it’s the year round good weather and the value of the property here. Whatever the reason, it’s clear that Lanzarote is now one of the best places to buy in Spain.
3. Lanzarote’s USP
Lanzarote’s year round mild climate and stunning landscapes, from volcanic terrain to golden beaches, are irresistible. The island’s growing tourist industry has created a thriving economy and hospitality sector. Lanzarote has also seen a big increase in its expat community.
These factors have created a robust and diverse property market. From modern apartments in busy resort areas to traditional fincas in peaceful rural settings, Lanzarote has something for everyone.
4. Lanzarote's Property Market
Lanzarote has a wide range of properties to suit all tastes and budgets. To make an informed decision you need to know the types of properties available and what to look for when choosing your property.
Types of Properties: New Builds and Resale Properties
Lanzarote has new developments, resale properties and vacant plots. New properties in planned developments have modern amenities and designs, from apartments to villas. Resale properties have character and established neighborhoods, from houses to apartments. Vacant plots allow for bespoke creations but require knowledge of local regulations.
The price range is vast, from modest to luxury. Options range from studios to villas, to suit all tastes and budgets. Additional costs and property taxes in the Canary Islands apply to both resale and new build properties, ITP Tax, notary fees, title deed tax, land registration fee, translation fee, legal fees and mortgage fees.
What to Look for when Choosing a Property
Location is key when choosing a property in Lanzarote. Popular areas like Puerto del Carmen, Playa Blanca and Costa Teguise have a lively atmosphere, amenities and beach proximity. These areas are ideal for those who want a busy environment or rental potential. Inland areas or smaller coastal towns can offer a more peaceful lifestyle and more space for your money.
The type of property you choose should match your lifestyle and intended use. Apartments are low maintenance and often come with shared facilities, perfect for holiday homes or rental investments. Villas offer more privacy and space but require more upkeep. Townhouses are a middle ground, more space than an apartment but less maintenance than a detached villa.
Budget considerations go beyond the purchase price. Factor in notary fees, property transfer tax and potential mortgage fees on top of the sales price. For ongoing expenses consider community fees for apartments or urbanizations, property taxes, utilities and maintenance costs. If you’re buying for rental purposes research potential rental income and occupancy rates in the area to ensure it matches your financial goals.
By considering these factors and working with local professionals you can navigate the Lanzarote property market with confidence and find a property that meets your immediate needs and is a long term investment.
5. Financing Your Purchase
Financing your purchase in Lanzarote can be a tax efficient way to buy in Lanzarote.
Mortgage Options and Fees in Lanzarote
When buying in Lanzarote various mortgage options are available to residents and non-residents. Local banks offer competitive rates making property investment in this beautiful Canary Island accessible to a wide range of buyers. A local mortgage involves the bank doing a valuation of the property which incurs a valuation fee.
Non-residents can borrow up to 60% to 70% of the purchase price or bank valuation whichever is lower. Residents can get mortgages up to 70% of the value of the property. These loan to value ratios are in line with general Spanish mortgage practices for foreigners.
Please note that the mortgage application process in Spain can be complex especially for non-residents. Banks will require proof of income, financial stability and a Spanish NIE number. Additional costs such as property appraisal fees, notary fees and mortgage stamp duty should be factored into your budget.
Fixed, variable and mixed rate mortgages are available so you can choose the one that suits your financial situation and risk tolerance. Working with a specialized mortgage broker can help you navigate the process and get the best terms.
6. What are the Costs of Buying in Lanzarote?
When buying in Lanzarote it’s essential to have a full understanding of all the costs involved. These can vary depending on the type of property and the personal circumstances of the vendor and buyer.
Tax for Residents and Non-Residents
Non-resident buyers need to factor in the non-resident tax in Spain. All buyers, regardless of residency, are subject to government property taxes in the Canary Islands, including a transmission tax which varies according to the property’s value. Buyers should also consider income tax returns and the tax declaration process for property owners in Spain.
Hidden Costs and Pre-Purchase Reports
It’s highly recommended to get a full report of all costs before finalizing your purchase. This report should include:
- Tax costs (including transmission tax)
- Notary and land registry fees
- Legal fees
- Community fees (for properties in shared complexes)
- Utility bills
- Security system costs
- Valuation fees
Having this information upfront will help you avoid any surprises and budget better.
The Critical Step of Paying a Holding Deposit
Paying a holding deposit is a crucial part of the buying process and unfortunately it’s an area where fraud can occur. To protect yourself:
- Be certain about your decision to purchase before paying any deposit.
- Ensure you're dealing with a reputable real estate agency.
- Verify that the vendor has the legal right to sell the property.
- Thoroughly understand the terms of the holding deposit contract.
There have been cases where buyers have lost their deposit due to unclear contract terms and ended up in court. In some cases unscrupulous agents have disappeared with the deposit. Always have a lawyer review the deposit contract before signing.
7. Property Restrictions
When buying an apartment or villa in a community of owners in Lanzarote you need to be aware of any existing restrictions. These can include:
- Restrictions on renting the property to tourists
- Pet ownership restrictions
- Rules about property modifications or decorations
Also be aware of the possibility of squatter issues which can be difficult to resolve due to the current Spanish regulations on evictions.
8. The Final Step: Signing at the Public Notary
The day you sign the purchase agreement at the public notary is critical. Never attend this appointment alone even if you’re fluent in Spanish. Many issues and questions can arise during this process and you need someone to advocate for you and translate accurately. The notary must witness any large value sales and ensure all parties understand the transaction.
Key points to consider:
- A same-day certificate from the land registry must be checked to avoid last-minute surprises.
- Important clauses and documents such as certificates and tax payment receipts must be attached to the deed.
- An independent lawyer can ensure everything is done properly. The notary’s role includes overseeing the signing of mortgage deeds and property and mortgage deeds, ensuring all terms and conditions are understood.
Buying a property in Lanzarote can be an exciting and rewarding experience but you need to approach the process with caution and seek independent legal advice. This will ensure a smooth transaction and protect your interests throughout the buying process.
9. The Lanzarote Property Buying Adventure: From Offer to Keys
Buying a property in Lanzarote is a 4-6 week journey. This sun-kissed Canary Island offers a unique blend of volcanic landscapes and Mediterranean charm, it’s a popular destination for property buyers. Let’s go through the process so you’re well prepared for your Lanzarote property adventure.
The Offer: Making Your Proposal
Before making an offer research the local market. Look at comparable properties, recent sales and current trends. Armed with this information you can make a competitive yet reasonable offer. Pro tip: Consider including a clause that allows for a refund if any title issues arise - it’s your safety net in this foreign market.
Negotiation: The Lanzarote Way
Negotiation is part of the property buying process in Lanzarote. Start with a slightly lower offer and leave room for friendly bargaining. Remember it’s not just about the price - clarify what’s included in the sale. That charming antique armoire or the state-of-the-art outdoor grill could make or break the deal!
Your Legal Ally: The Indispensable Lawyer
Navigating the legal side of property purchase in Lanzarote can be as tricky as traversing the volcanic terrain!
This is where your lawyer becomes your most valuable asset. They’ll be your guide, interpreter and protector throughout the process, ensuring every ‘i’ is dotted and every ‘t’ is crossed in both the private contract and the all important Escritura (title deeds).
If you don’t speak fluent Spanish it’s essential to have a translator present to ensure you fully understand the process and documentation.
The Paperwork Dance: From Contract to Escritura
The private contract sets the scene, outlining the terms of sale, purchase price and completion date. Think of it as the dress rehearsal. The Escritura is the grand performance - signed by both parties, it’s the official transfer of ownership. It’s a big moment so enjoy it!
Budget Wisely: The Hidden Costs
While you’re dreaming of sunsets on your new terrace don’t forget to budget for the less glamorous bits. Set aside about 10% of the purchase price for various fees and taxes. These include transfer tax, notary fees and potentially mortgage fees. It’s the price of making your Lanzarote dream a reality.
The Final Act: Notarisation and Registration
The notary plays a big role in the final stages, ensuring both parties fully understand the terms of the sale. Once the documents are signed your property will be registered in the land registry. It’s the official stamp that says, "This slice of Lanzarote paradise is yours!"
Keys in Hand: Welcome Home!
The moment you’ve been waiting for - receiving the keys to your new Lanzarote home. It’s not just a transaction; it’s the beginning of your new life chapter on this beautiful island.
Post-Purchase Steps
Your journey doesn’t end with the purchase. Register with local authorities - it’s essential for legal and tax purposes. Consider hiring a property management company to handle maintenance and potential rentals, especially if you’re not a full-time resident.
By understanding each step of this process you’re not just buying a property; you’re investing in a lifestyle. Welcome to Lanzarote - your new home awaits!
