What is a sales agreement?

A private document signed between the buyer and seller. It must state the following points: • Details of the buyer and seller. • A legal description of the property • The purchase price • The form of payment and currency to be used in the transaction (banker’s draft, cash, etc.) • The completion dates and penalty clauses if these dates are not met usually, if seller withdraws after signing the contract he is liable to pay double the amount of the deposit and the buyer should he pull out, will forfeit his deposit.

What if there's still a mortgage on the property?

If there is a mortgage on the property it can be cancelled on the same day that you sign at the Notary.

Before the signing date at the notary, we will inform the holding bank to prepare the cancellation costs, and the amount that the seller still owes.

On the day of the signing a banker's draft will be made out for this outstanding figure including the costs and paid to the bank. This figure will then be deducted from the purchase price when paying the seller. The bank will then register the cancellation of the mortgage

Is it easy for a foreigner to obtain a mortgage?

Yes. So long as you can submit basic financial information getting a mortgage in Lanzarote is much easier than in most other European countries. Often builders will offer you a mortgage if you purchase a new property. But don’t worry, we at Volcano Estates will handle the whole process for you.

What does a foreigner need in order to buy property in Tenerife?

The first thing is to apply for an N.I.E. (Number of Identification for Foreigners), which is basically an ID card anybody with a financial interest in Spain or the Canary Islands is required to have.

You'll also need to set up a non-resident bank account, which is a simple process, but again, we will handle all these administrative procedures for you.

Will we have to pay tax when selling a property?

Yes, as a non-resident you'll have to pay 5% of the new declared value as a retention to the Spanish Tax Office, but provided your accounts are in order you should get most of this back within five or six months.

You will also have to pay 35% of the capital gains as Income Tax, i.e. 35% of the difference between the price you paid for the property and the price you’re selling it for.

Talk to us today

If you would like to find out more about buying property abroad through Volcano Estates, simply contact us today on (0034) 928-51.87.52, or by e-mail, for an immediate response.