When we take the step to buy a home in the Canary Islands, we have to take into account not only how much the home will cost us but also the expenses associated with the sale.

When choosing the home, after the visits, the valuation, a signal of 10% is delivered, this is what we know as the Arras Contract.

In this way, the seller and the buyer agree to carry out the agreement. If one of them regrets, they must compensate the other: the buyer would lose the signal delivered and if it is the seller who backs down, they must return 10% to the buyer along with the same amount as compensation.

When the deposit contract is signed, all the documentation begins to be processed so that the sale is signed in the shortest possible time. In the case of buying through a mortgage, the time can be a little longer than if it is done with money that we already have in our account or a home / personal loan.

What expenses must be paid when buying a property in Gran Canaria?

Canary Islands General Indirect Tax (IGIC)

It is only paid if the purchase is of a new home, it corresponds to 7% of the sale value

Property Transfer Tax (ITP)

In the case of a used home, 6.5% of the value of the sale.

Documented Legal Acts Tax

Between 0.5 and 1% of the value of the home.

Property Registry

Here it is calculated depending on the price of the property:

• Property value less than € 6,010.12: € 24.04.
• Property value between € 6,010.13 and € 30,050.61: € 1.75 additional for every 1,000 more cost.
• Between € 30,050.62 and € 60,101.21: € 1.25 additional for every € 1,000.
• Between € 60,101.22 and € 150,253.03 : Additional € 0.75 per 1,000.
• Between € 150,253.04 and € 601,012.10: Additional € 0.30 for each 1,000.
• More than € 601,012.10: Additional € 0.20 per 1,000.
• The law establishes a minimum of 20'04€ and a maximum of € 2,181'67.
• To this amount must be added the registration of the deed, 0.2% of the value of the home.

Notary fees

Between 0.5 and 0.75% of the value of the property, if it is purchased with a mortgage loan, these expenses will be higher due to having to formalize the mortgage before a notary public.

What expenses are there when buying with a mortgage?

In the last year, thanks to low interest rates on mortgages, we are finding that more buyers prefer to buy by asking for a mortgage loan from the bank. With interest rates around 2%, they prefer to borrow that money and get a better return on their savings by other means.

Expenses associated with the mortgage

In addition to the aforementioned expenses, in the case of applying for a mortgage, the opening commission costs are between 1.5% and 2% of the value of the mortgage. Although the appraisal in this case would be paid by the bank.

And when the whole process is finished, we recommend requesting a simple note of the property in the Registry since for less than € 10 we will make sure that everything has been registered correctly.

If you are thinking of buying a house in the Canary Islands, at La Boutique · Canary Real Estate we help you calculate the associated expenses so that you know at all times how much it will cost you to have your new home. Call us and our buyer agents will design a tailor-made plan for you.