Tuesday, 25 February 2014 00:00

Gran Canaria Property: The Costs Of Buying

Gran Canaria Property: The Costs Of Buying

Here's a simple breakdown taxes, fees and ongoing expenses associated with buying and owning a Gran Canaria property. 

Your estate agency should provide you with a full breakdown of all the costs associated with buying and owning a specific property in Gran Canaria prior to purchase.

Purchase costs

On top of the purchase price, you'll need around 10% in cash for taxes and fees.

Always set aside 10-12% of your total budget for buying costs in Gran Canaria. These include a purchase tax (from 5% to 6.5%), legal costs, property registry costs and notarial costs.

There is no way of reducing these costs as they are all fixed. The exact purchase tax percentage depends on the property type and zone.    

Estate Agency Fees  

Estate agency fees in Gran Canaria are paid by the seller. They are  5% of the purchase price but can be more for cheap properties (less than €100,000) and less for expensive ones. 5% may seem high but it is the standard all over Spain and a good agency will earn their fee by showing you a good range of property and handling all the paperwork associated with a purchase.

Pick a good agency and it's money well spent for financial security and a hassle-free purchase.  We've always recommended Cárdenas Real Estate. Their blog is packed with useful Gran Canaria property information. 

Ongoing Costs  

There’s no monthly council tax in Gran Canaria and the ongoing costs of owning a property here are low.    Property in Gran Canaria is taxed annually at 0.5% of the official government valuation of the land it is built on. This is almost always lower than the market price (unless you get a real bargain or a repossession).    If you buy a property on a tourist complex or in an apartment block, you pay a monthly fee for the communal costs (maintenance, swimming pool, gardening, services, etc). 

Be aware that if you buy an old property you’ll have to contribute to an overhaul of the building’s electricity wires and water pipes, lift or swimming pool at some point. Always check what has been paid for by the current owner and whether the building is planning a levy for future work (known as a deramma). 

Non-resident owners also have to pay a silly enjoyment tax that comes to a few hundred euros per year on big properties.

Tax filings

You can do all your paperwork yourself (annual tax filing, local municipality forms, etc) or get a good agency to handle if for you. This costs nothing compared to the time you'll waste trying to do it in person.

 

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  • Exchange Money In Gran Canaria Or At Home?
    Exchange Money In Gran Canaria Or At Home?

    Visitors to Gran Canaria often ask whether it is better to exchange their local currency for euros at home or in Gran Canaria. 

    The answer is that it is almost always better to buy your euros at home than it is to bring pounds to Gran Canaria and use local banks or currency exchanges. This rule of thumb applies all over the world. A currency is almost always cheaper the further away you are from the place you can spend it (because demand for it is lower). 

    Exchange rates are almost always better at home than in Gran Canaria

    You are very likely to get a better exchange rate using a British currency exchange specialist or local bank. Many of these companies will deliver your euros to your home.

    One of the best rates in the UK is often from the post office, especially if you do it well in advance.

    The only way you'll get a better rate in Gran Canaria than at home is if the exchange rate changes while you are travelling and this is rare. 

    You also have to bear in mind that currency exchanges in Gran Canaria are getting rarer and some local banks don't exchange money for non-clients. 

    To Transfer large amouynts of money to Gran Canaria, or to make regular transfers, always use a reputable currency broker such as Currencies Direct. This will save you money on exchange rates and bank charges and is highky secure. 

    The risk of bringing cash to Gran Canaria

    Another important factor to consider is the risk of bringing cash to Gran Canaria: If it is lost or stolen, there is no way of getting it back. 

    It is much safer to bring a debit or credit card and use local bank ATMs to take out money. These days, a good option is a pre-charged debit card. 

    Cards may be slightly more expensive that carrying cash, unless you seek out a bank card with low commissions, but it is much more secure. 

    Bank ATMs like Bankia, Santander and BBVA often charge lower rates than the ATMs in shopping centres and busy tourist areas.

    Alex Says: Always select the Euro option at ATMs in Gran Canaria because the exchange rate is much better than if you opt for the Local Currency option. The same applies when you pay by card in shops and restaurants.

    See our Gran Canaria Tips section for more nuggets of useful local information.

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