Property Listings

Does the buyer have to pay commission when buying property in Spain?

No, the estate agent's commission in Spain is paid by the seller.

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How high is the property transfer tax in Gran Canaria?

The property transfer tax (ITP in Spanish) for the purchase of an existing property in Gran Canaria has been 6.5% of the purchase price for many years and must be paid within four weeks of the notary appointment.

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What are the costs for the notary?

The notary fees are between around €800 and €1,000, depending on the work involved, for example if notarised powers of attorney are required. The fees for entry in the local property register or land registry (Registro) are around €400.

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How high is the property tax?

The property tax is calculated on the basis of the cadastral value. For an average one-bedroom flat, for example in Playa del Inglés, it is between €200 and €250 per year. Payment is made every six months, in June and November. You can see the cadastral value of your property on the property tax payment receipt (I.B.I.).

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How much is the owner-occupancy tax?

The so-called ‘owner-occupier tax’ or ‘non-resident tax’ is paid by non-resident owners who declare in their annual tax return that they use their property themselves and do not rent it out. This tax amounts to 1.1 % of the cadastral value. This 1.1 % is subject to an annual tax of 19 %. A calculation example: With a cadastral value of €100,000, 1.1% is used as the basis for calculation, i.e. €1,100. You pay 19% tax on this, which results in €209 owner-occupancy tax. You can find the cadastral value (valor catastral) in your property tax document (I.B.I.).

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Payment for the property

Please never buy a property without notarisation and prior verification of the relevant documents. Payment is almost always made by registered and certified bank cheque (subject to a fee at the bank). It is also possible to make a direct online transfer during the notary appointment from a so-called ‘trust account / client account’, e.g. from your future tax office. The transfer receipt serves as proof of payment and is incorporated into the notarised deed of sale. Purchase option contracts (also known as preliminary contracts, reservation contracts or contrato de arras in Spanish) are also frequently concluded in which a binding notary appointment is agreed and the property in question is reserved with a down payment of 10% of the purchase price. In this contract, among other points, it is also ratified that the optionor (seller) sells the respective property free of debts/encumbrances and without any third party rights. In particular, it is important to ensure that the certificates of freedom from debt (certificado no deudor) from a possible community of owners and from the municipality are available. The certificado no deudor from the municipality confirms that the buyer has paid the property tax and rubbish collection.

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Purchase processing

How long does the purchase process take?  

If you decide to buy the property after the viewing, we need about one to two weeks to prepare the notarial sale and organise all the necessary documents. It is recommended (but no longer mandatory) to open a bank account in Gran Canaria. The NIE number should be applied for and you must be in possession of a valid identity document and have the full purchase sum including incidental purchase costs. 

 

If partial financing is required, the purchase process may be delayed by several weeks. Banks take different lengths of time to process a loan application - in our experience around three to six weeks. Spanish banks generally expect foreign, non-resident buyers to have at least 30-50% equity. However, the granting of a loan depends on many factors, including the estimated value of a valuer appointed by the bank. It may also be helpful to speak to your bank in Germany about financing a property in Gran Canaria.

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N.I.E. number

 

The N.I.E. number is a ‘foreigner identification number’ and is also known colloquially as a ‘tax number’. It is mandatory and must be presented when purchasing a property. The N.I.E number is applied for in person at the police station, whereby a valid identity card or passport and a completed form must be presented. 

Alternatively, you can also apply for the N.I.E. number in Germany at the Spanish consulate. However, it is recommended that you call them beforehand.  It is necessary to make an appointment with the police in advance, which can take some time depending on how busy it is.

Tax offices (Asesorías / Gestorías) often provide this service, which we are happy to arrange.