The cost of our home in the Canary Islands is an important consideration when buying the home.
When choosing a new home, the transaction’s internal worth is followed by a signal of 10%, this is what we call the Arras Contract.In this way, both the seller and the buyer agree on the terms of the agreement. If one of them regret. After the deposit contract is signed, the process of collecting all of the sales documentation begins so that the whole process is concluded as swiftly as possible. Should a sale be bought via an FHA mortgage, it can take longer, particularly if the funds are coming directly from the bank or from a personal savings line of credit.
Let’s discuss all about foreigner buy property in the CANARY ISLANDS
REQUIREMENTS AND LEGAL ASPECTS
- Verifying its situation in the Registry.
Once you have selected the property you would like to purchase,To help you out, your property will need to be checked for liens at the Registry. With the exception of mortgages or other liens, some of them may be cleared during your property’s purchase.
- Earnest money contract.
After looking at the condition of the possible liens, you may move forward with signing the earnest money contract to reserve the property. The contract contains paying a small deposit, which makes it critical
You must confirm that you are obtaining the correct house, with no liens. Make sure that you receive the payment or the value of the return on the sales price.
- Contract with the real estate agent.
It is common to come across a seller who lets a realtor handle the sale of the property, which has generally ranged from 4 to 5 percent of the listing price. Thus, it is the duty of the real estate agent to give the necessary documentation to the buyer so that they are able to verify the property of the prospective buyer’s condition,In the Registry, including in Property Documentation, I’ll follow the Property Documents for the list any liens it may have.
- Off-plan properties.
If you are planning to buy an off-plan property, one which hasn’t been built yet, then the contract has to be signed with the building developer. In this case, you should bear in mind to:
The developer’s background company and economy should be correctly documented, and their financial solvency should be reviewed carefully. This should be ensured by registration in the Corporate Registry of the government. If the developer additionally outlines a cooperative, its name must additionally be registered in the corresponding Cooperative Registry of the community.
Check the urban development situation at the local city hall as well as check directly and with the builder. If not, check with your local city hall if the builder is permitted to build near you.
Moreover, you should gather all the features of the property planning process, a description of the common areas and services, and other details. You should also keep the advertisements and other promotional materials as they might be need to differentiate between your construction and developments.
Request for the quality report: This document will inform you regarding the exact materials which will probably be used, in addition to also the finishes and fittings of the spaces and the common areas that will be constructed. It’ll also show whether the envisioned construction follows the plan.
- Contract of sale and taxes.
The sales contract is a legally binding document for the sale. Both parties will be bound by the agreed-upon conditions unless there are clauses to the contrary that the law does not forbid.
It is important that the contract of sale not determine ownership by transfer itself in Spain, so a dedication to transfer the keys or to make a public instrument is necessary.
- Creating a public instrument.
Following the previous line, creating a public instrument in front of a Notary for the contract of sale will result in an array of advantages, including the registration of the property in the Property Registry. In turn, this registration guarantees greater security and legal certainty for those reasons,
- a) A civil deed of sale registered in the Property Registry is enforceable against third parties, meaning that it will prevent multiple sales from one instance, which is beneficial to the new owner.(seller) Moreover, it will allow to place a levy on a house when you seek a mortgage, for instance.
While lending gets processed, you do not require a levy under contract of sale to be gotten. Therefore, if you’re prepared to put a purchase up so that obtaining a mortgage can be achieved, you need to take care of the civil deed of sale first, in order to see it noted in the Property Registry.You can levy your property and apply for the loan through this property registration.
Furthermore, it is necessary to highlight that, which is a factor, civil court can act to enforce, so in the event of misbehavior in the stipulations of the agreement, it can be enforced directly with an order opposed to the contract for sale. It is important to remember that the judicial procedures should be appealed before this takes place. This results in a much slower process and more expenses.
- Foreign buyers:
The Hague Apostille and foreign buyers empowerment on had the power to confer a power of attorney. The possibility that a third party might have received a power to sell the property.
If you are an out-of-country or homeowner that can’t attend the signature, it’s unlikely that you will be present to sign the contract. In this COVID-19 time, a third-party individual will be granted a power of attorney to carry out the contract signing on your behalf. The purchase will happen before a Spanish notary.
In certain cases, given that two customers are out of the country and one is confined to the trip, power of attorney may be granted to the passenger missing from the trip as long as the Hague Apostille is noted.
The person who attends a meeting can leave his own name in the listing, present at the reception, as well as appear by either one of the aforementioned. A lawyer can also be requested in many situations.
- NIE – (Foreigner’s Identity Card).
Foreigners who buy property in Spain need a state identification number payment system (NIE) from the police. The ID number is valid for the entirety of their lives and must be requested both in Spain and abroad through the specific Spanish embassies or consulates.
Early on, your passport will be enough to sign the earnest money contract as well as the contract of sale, but after this you will need to obtain the NIE in order to pay the relevant taxes.
- Tax Payment.
New properties have been built in the Canary Islands, and this operation is taxed with the Canary Island General Indirect or IGIC, of 7, along with the Spanish Documented Legal Acts or AJD, varying for each case
Documentation is required if the previous owners already sold the commercial property or bought it. In this case, the Property Transfer Tax or ITP applies a progressive tax, based on the value of the property as well as its other requisites from the buyer..
Once the tax debt is settled, the purchase will be recorded, and the buyer will appear as the current owner. Pay careful attention to the fact that the buyer is responsible for notary and registration fees.
As a word of advice, when investing in a home, we recommend obtaining some legal assistance to accompany you during the process, ensuring you get accurate information at all times.
Do you want to buy real estate in the Canary Islands? Or do you already own a property and are you planning some minor renovations? Book a free consultation with our real estate specialist and tell us about your Canary Islands real estate dream. Our company Piso Barato Inmobiliaria is made up of people who are experts in the real estate sector, with extensive knowledge of our area and a wide portfolio of clients and contacts. We are professionals and work to offer the best services so that you can quickly find your home, farm or any property you want to buy or rent.