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How to Buy Property in Lanzarote

You don't have to be resident on the island in order to invest in the Lanzarote property market. Non-residents can borrow up to 70% of the purchase price from local banks - so you will need a deposit if you want to buy here. Banks here, like elsewhere, have tightened their lending criteria since the credit crunch, so you may also need to supply additional supporting paperwork with your mortgage application, especially if you are self employed.

Select an Estate Agent

There are numerous estate agents in Lanzarote to select from and it's important to make the right choice - as here they tend to offer a lot more help and advice than in the UK, often assisting with opening local bank accounts and advising on lawyers.

We only work with reputable, established estate agents - so you can contact any of the companies within our estate agents directory with confidence. In Lanzarote estate agents take their fee - usually between 3% and 5% of the purchase price - from the vendor.

Additional Taxes and Charges

Much like most other property markets you need to allow for an extra 10% on top of your purchase price in order to cover additional taxes and charges. These include:

  • Stamp Duty — 6% (5.5% on new builds)
  • Registry Fee
  • Notary Fee
  • Plus Valia Tax

It is important to note that any earnings generated from renting your property are subject to income tax in Spain and you will also obviously be liable for capital gains tax on any profit accrued as and when you come to sell your property in Lanzarote - just as you would be in the UK or Eire.

Banks, Mortgages and Transfers

You will need to open a non-resident's bank account here on the island in order to complete your property purchase. Local banks are used to this procedure and most staff speak English, so this is a fairly straightforward process. Your selected estate agent can also help you with this should the need arise.

Non-residents can only borrow up to 70% of the purchase price. Just as in the UK your chosen bank will carry out an evaluation and will make their lending decision based on that valuation, not on the price displayed in an estate agents window.

Many buyers find that it is beneficial to use the services of one of the many forward currency exchange houses that have sprung up in recent years, as they will often give better rates than your own bank when it comes to transferring cash abroad. When large sums of money are involved this can add up to a considerable saving.

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