Buying a House

Whay you need to know

Buying A House – This article is intended as general guide to real estate in Lanzarote, but should not taken as a substitute proper legal advice.


There is a vast difference bt choosing the perfect spot in which to spend a holiday. and choosing the position of new home.


This is a serious purchase, you need all the help you get. Look for an Agent who is registered, either by having the initials API and a registration number, which shows they are member of Spain’s College of Estate Agents, or the letter GIPE, which shows they are member of the Association Property Promoters. ALWAYS deal with someone who is well enough established to have their own office.


Make sure that the person selling you the property entitled to do so. The should have carried out as basic search and will be able to show you that this is the case.

Your agent will be able to supply you with a list of suitable lawyers to act on your behalf. You can alway cross check these with the British organisation specifically set up to help people like yourselves. This is THE INSTITUTE OF FOREIGN PROPERTY OWNERS, whose head office is Apartado de Correos 418, 3590 Altea (Alicante) Spain.

Once this is all in order, you will need to sign a Contract of Purchase approved by a lawyer, and pay a deposit (usually 10% of the intended purchase price); this deposit is normally held by the lawyer appointed to arrange the signing of the Title Deed. The contract will state the terms and conditions of the sale and a specific time for completion of the transaction when you must produce the balance of the price. If for any reason you decide, up to this completion time that you cannot proceed with the purchase, you will forfeit the deposit paid, but if the seller changes his mind, he must return the deposit to you in full, plus a compensation payment for damages. Obviously if a lawyer is holding these funds then there is no problem in the purchasers deposit being refunded.

The transaction is completed by making the outstanding balance of payment and signing the title deed, (known in Spain as the Escritura); this must be done in the Notary’s Office. The Notary’s task is to ensure that all of the legal documentation is correct, he will also carry out a search in the Land Registry Office on the day of signing to check the current status of the property or land, and will require the last annual rates receipt from the council in which the property is situated, to ensure that this is up to date. The Notary, however, will not be interested in any other debts on the property, and it is essential to ensure that your lawyer has current receipts for all other payments such as water, electric and community charges, to ensure that these have also been paid. Debts, such as these in Spain are levied against the property and not the owner. When in the Notary’s Office, you will be asked to produce your passport as evidence of identification. You will also be required to have a NIF number, Numero Identificacion Fiscal.


If you are not a resident in Spain and are buying property or land from a resident it is advisable to bring your money from abroad to complete the purchase, it is simple to open a non resident account in a local bank. You can then transfer your funds from your own bank in the UK, to this new account. On the signing of the new Title Deed your cheques for payment will be shown to the Notary and included as part of the documentation of the deed. They must be inscripted with details of the property or land to be purchased, or have an investment certificate from the issuing bank attached. The Notary will also require you to sign a Spanish ministry form, declaring that the investment has been made. It is also possible when purchasing from- a non Spanish resident, to pay the completion funds abroad in any currency. In this case, the deed will state an equivalent amount in pesetas as this gives the value in which the transmission tax (stamp duty) is calculated.

You may have to produce more than one cheque as in many cases non resident vendors may be liable for capital gains tax. In this situation a sum of 5% calculated against the value declared in the title deed will need to be retained and paid to the Spanish Tax Authorities. This will be noted in the deed and the payment to the tax office will then be made by the lawyer acting for you. The cheque for this 5% retention, which is made out to the Tesoro Publico, should also be inscripted with the property details shown to the Notary, as it forms part of your overall investment in Spain. Non resident vendors who have owned a property for a period in excess of ten years before December 1997 will not be liable for capital gains tax, and the 5% retention will not be required at the point of sale. The Estate Agents fees are normally paid by the vendor. Beware of some unscrupulous illegal agents have been known to charge the purchaser as well as the vendor for their fees.


Signing the escritura in the Notary office does not yet mean that you officially own the property. For the transaction to be complete you must register the deeds in the Registro de la Propiedad (Property Registry). Your Lawyer will probably do this for you. When the deeds are taken to the Registro, the purchase tax of 6% of the value of the property must be paid. The Registro will later ask for a second payment to cover their charges.

In addition, you will be responsible for the payment of a tax to the Local Authority, known as “Plus Valia”. The calculation of this tax varies from area to area. At the same time, a form should be entered to the local authority, advising them of the change of ownership. If this is not presented they will continue to send the bills for the annual local authority taxes to the previous owner.


The costs for which you must budget in buying a property are of course more than just the price of the real estate. The Transmission Tax, the Plus Valia, the Notary’s bill, the fees from the Registro and the bill from your Lawyer, will probably come to about 10% of the purchase price. Your Lawyer will ask for these funds to be placed with him before the work is done. Do ask for a detailed estimate of the costs, and you will then be able to compare this with the actual costs as they arise.


When you buy a property you become liable for any outstanding bills for water, electricity, local rates and community fees. Both the Electricity Board (UNELCO) and the Water Company (INALSA) have forms which you and the seller must sign, to transfer the bills into your name. When you go to do this you should check that all payments are up to date.

Local rates are payable at the Town Hall each October. You or your representative needs to visit the “Oficina de Recaudacion” at the Town Hall to give them the form changing the rates into your name, and again, checking that all payments are up to date. As bills are not sent out for the rates, property owners often forget to pay them, and they can soon mount up.

Should you be buying a property on an “Urbanisation” you will find that there is a Community Association, of which you must become a member. Each property owner on the site owns a percentage of the communal areas, and is responsible for making a payment to the Association for their upkeep. You should check before you buy, how much the monthly payment is, and whether the payments are up to date. If they are not made the Association can seize your property, so be careful.

This information is intended for your guidance only, and is not a substitute for proper legal advice. However, it is the fruit of many years experience, and we hope by providing it we have encouraged you to take the plunge and join the many happy home owners in Lanzarote. Whether you intend to visit us regularly, supplement your income by renting your property to holidaymakers, take refuge from the winter chills or join the resident community in Lanzarote, may we wish you many years of happy ownership, soaking up the sun in this island paradise.

The information contained above is accurate at the time of uploading should ammendments need to take place, then this will be carried out on the next upload.

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