Getting a mortgage as a Gran Canaria resident is not a complex process but you do need to do a fair amount of paperwork and have a decent amount of cash to cover the deposit and fees. 

Article by Las Palmas estate agent Laura Leyshon.

Getting a Gran Canaria mortgage

To get a mortgage you must have a 10-20% cash deposit (plus the 10% in cash that it costs to buy a property in Gran Canaria) and prove to the bank that you can make the repayments. In general, they only lend if your liabilities (existing loans, mortgage payments) represent less than 35% of your monthly income.

For example, if you want to take out a mortgage which will be 350 euros a month, you must earn 1000 euros a month and not have any other loan payments. They will check your ability to pay by requesting the following documentation…

• Wage slips from the last 3 months
• Bank statements for the last 6 months
• If you are self-employed, copies of your last 3 years of accounts (with an auditor’s stamp) and copies of you last 12 month’s business bank statements and your last 6 months personal bank statements).

As always, you will need to feed the photocopier with your ID, residencia and the one piece of paper you didn’t bring with you.

Banks in Gran Canaria do NOT take future rental income into account when calculating the amount of money they will lend you to buy a property.

Spanish banks currently offer mortgages of 60-80% of what a property valuation firm says that it is worth (you pay about 300 euros for this valuation as part of the mortgage application process).

Most banks offer variable rate mortgages that last from between 12 and 40 years. Fixed rate mortgages have been at histrically low rates for several years but have risen in 2022. 

Gran Canaria mortgage interest rates

Interest rates in Spain vary, but are generally a little lower than in the UK. The rate is set using the EURIBOR interest rate published by the European Money Market Institute.

Your mortgage rate will be expressed as EURIBOR plus a percentage (eg. Euribor más 0.75%) and varies depending on whether the EURIBOR rises or falls. With the rate currently negative, mortgages in Spain are at rock bottom levels.

It is always worth applying to several banks (you only have to gather the paperwork once) as the rate, property valuation, and other conditions vary considerably between banks and you never quite know what headquarters in Madrid (all applications are sent to Madrid for approval) will say.

There is no harm in playing the banks off against each other.

Ask for a copy of one bank’s offer and then take it to a different bank to see if they can improve the offer – they often will. Then take the improved offer back to the original bank – you may get a pleasant surprise.

Gran Canaria mortgage costs

During the mortgage application process, you have to pay for a valuation by a professional valuation firm (200-300 euros) and you will also pay a gestoria (bureaucracy consultant/paperwork company) to handle all the paperwork (around 250 euros); your bank will assign one, you’ll pay for it.

Spanish banks have a habit of attaching other products to their mortgages to boost their profits. For example, you will have to pay for annual life insurance that covers the entire mortgage, and property insurance that covers its replacement value in the case of a fire, etc. Often you get the best interest rates if you agree to their add-ons.

Non-resident mortgages in Gran Canaria

Non-residents need a minimum deposit of 30% plus the 10% in fees and taxes that you need to buy a property. That’s a minimum of 40% of the value of a property befoe you can get a mortgage as a non-resident.

You may also be asked to provide an aval (guarantor). This will be somebody usually based in Spain who agrees to pay in the event of you being unable to.

Save money on transfers by using a currency broker like Currencies Direct if you are from a non-Euro country. They are far better value for money thank banks.

New build mortgages in Gran Canaria

As well as paying slightly more IPT tax (7% rather than 6.5%), buying a new build property has the disadvantage that the constructor (builder) or promotor (promoter) often has a mortgage deal agreed with a particular bank. The rates and conditions are fixed and you have to accept them.

Changing mortgages in Gran Canaria

With rates as low as they are at the moment, there is rarely much benefit to changing your mortgage provider as the process is long and expensive (fees are around €3000). However, if you are locked into a mortgage with high rates, it is worth looking into.

The Clausula Suelo

Spanish banks used to put a floor under the interest rate on their mortgages which basically locked in their profits if interest rates dropped. However, the EU has ruled this floor, known as the clausula suelo, illegal and told the banks to scrap it and TO RETURN ALL THE EXTRA, ILLEGAL INTEREST THEY COLLECTED.

If you have a mortgage in Spain with a clausula suelo, you are entitled to go to your bank and demand that they return all the excess interest you paid over the years.

These sums can be substantial so don’t expect your bank to hand it over without a scrap; They aren’t exactly falling all over each other to obey the courts.

Rather than give you the cash, the bank knocks what they owe you off the outstanding mortgage debt.

For the latest on this story, please read this article.

The best Gran Canaria mortgage banks

Mortgage offers change all the time so we recommend that you shop around extensively and apply at several different types of bank…

The traditional Spanish banks such as BBVA and Santander
The local banks such as Bankia and / or a Spanish caja (equivalent to a building society and just as endangered).
A foreign bank such as Bankinter and Deutsche Bank
An alternative bank such as EVO.
Online banks such as ING Direct.

Specialist mortgage brokers that work with estate agents rather than retail banks. 

Help getting a Gran Canaria mortgage

If you speak fluent Spanish and know the local property market, feel free to ignore this advice and use a local mortgage broker or go direct to the banks.

Use a good local estate agent when you buy a Gran Canaria property: They will help you with the process of getting a Gran Canaria mortgage and make sure that you pay a fair price for your property.

Best of all, estate agency services are free for the buyer as the seller pays all their fees.

In Las Palmas and north Gran Canaria, talk to me at Las Palmas Property.

In south Gran Canaria, just go to Cárdenas Real Estate.

If you own a Gran Canaria property and want to rent it out, there are three ways to do it and each has its own advantages. 

 Short-term tourist rental in Gran Canaria 

This is perfectly legal if your property is on land classified as residential (everywhere except the tourist resorts). In resort areas, it is more complicated as you have to have a tourist license, rent it out via a central management company, or apply for a license via an association such as ASCAV. Las Palmas has made noises about tightening restrictions on holiday lets and it is not allowed in many new builds. 

You do not need the permission of the Comunidad to rent out a private apartment although a Comunidad can vote to ban all touristic rentals in a building or complex (with a majority vote).

You need to apply for a licence via the Gran Canaria tourist board (El Patronato de Turismo: Headquarters on Calle Mayor de Triana in Las Palmas). 

Rates vary depending on location and property specifications. Cleaning costs are often added as a one-off extra charge for tenants. If you need a management company to handle bookings, keys, cleaning, etc, expect to pay at least 20% of the rent. 

NOTE: Please speak to a quality estate agent before buying a rental investment property in Gran Canaria’s resorts. The law for resort properties is currently in flux and you need expert advice.

Long-term residential rentals in Gran Canaria

Renting out property in Gran Canaria is fairly easy. You can either do it privately by advertising in the local papers or on websites like Segundamano and FotoCasa, or by advertising it via an estate agent. Agencies traditionally charge the tenant one month’s rent, but some are now asking the property owner to pay this fee, or to split it with their new tenant.

Most owners ask for a month’s rent as a deposit and return it once the tenant has left, minus any costs for repairs (reasonable wear and tear cannot by law be deducted from the deposit).

One advantage of renting via an agent is that they handle the contract, but you can download example contracts.

If you are a non-resident, some agencies will manage your property (they arrange for plumbers if there’s a problem, etc) for a monthly fee of around €50.

Renting out Gran Canaria property the middle way

Many owners take a middle road between touristic rentals and residential lets by renting their property to people who spend several months a year living in Gran Canaria. They are often retired Brits and Scandinavians escaping the winter back home (known as snowbirds) but digital nomads are also flocking to Gran Canaria.

The benefits of renting to snowbirds are that you can charge more per month than for a residential let and don’t have to handle frequent keys and cleaning.

To advertise your property to snowbirds, post it on websites like AirBnB and specify a long minimum stay, or post on residential rental portals. 

Renting and taxes

Non-resident property owners pay 24% income tax on rental income of all types while residents have to pay income tax. Residents pay income tax.

Most non-residents use a local Gestoria to handle their tax and paperwork.

Buying a property in Gran Canaria costs about 10% of the price you pay once you factor in taxes and fees. Selling a property involves some costs but these only add up if you profit from the sale. The annual tax burden of owning a property in Gran Canaria is low.

Article by Gran Canaria estate agent Laura Leyshon from Las Palmas property.

Here is a summary of all the annual property taxes you have to pay in Gran Canaria.

IBI: An annual property tax set by the local Ayuntamiento that is between 0.5% and 1% of the official value of your property (much lower than the market value). The IBI rate in Las Palmas is currently 0.73% while other municipalities charge slightly different rates..

Other ongoing costs...

IBI is the only monthly tax cost that you have to pay in Gran Canaria (San Bartolomé de Tirajana charges an annual rubbish collection tax). However, if you live in a building or a complex you have to pay a monthly communidad fee which is your share of costs like communal electricity, lift and pool maintenance and insurance.

The amount varies depending on the building and the facilities and services it offers.

Non-resident property owners must pay income tax on any rental income, plus IGIC (VAT) if they rent their property on a short -term basis. Even if a non-resident property owner doesn’t rent out their property, they still have to pay a small annual Sunshine tax.

Some municipios, such as Mogán charge an annual rubbish collection fee. 

Gran Canaria property taxes at purchase

ITP or re-sale purchase tax

Buyers of re-sale property (as opposed to a new build) are required to pay the Impuesto de Transferencia de Propiedad which is 6.5% of the price paid for the property.

New Properties purchase tax

This is currently 7% if the house is finished or is being built at the time of the purchase. It is paid by the buyer.

A property buyer only ever has to pay one of the above two taxes.

Other Gran Canaria property purchase fees

While not strictly taxes you also have to pay Notary fees (around 300 euros for most properties, more if you buy with a mortgage) and Property Registry fees (around 300 euros). Most buyers use a Gestoria to handle the paperwork associated with a purchase (they charge around 250 euros).

Along with the 10% taxes and fees, you’ll need a minimum deposit of 10-20% if you get a mortgage (30% for non-residents) and 300 euros to pay for a valuation of the property you want to buy. Spanish banks also insist that you take out life insurance and property insurance at the same time as the mortgage. Legally your mortgage provider cannot force you to take out their insurance. However, it makes the whole process smoother if you do. You can always change to a better deal after a year. 

Gran Canaria property taxes at sale

Plusvalía municipal

Paid by the seller to the Ayuntamiento where the property is located, this is also called the impuesto sobre el incremento de valor de los terrenos de naturaleza urbana (IIVTNU).

You pay plusvalia on the increase in value of the land that a property occupies during the period that you own it (capped at 20 years) and the amount varies depending on the period of ownership and the rates set by the Ayuntamiento.

Incremento patrimonial

Capital gains tax paid to the Spanish Treasury; Based on the difference between the sale price and the price paid by seller when he/she originally purchased the property (you can offset costs of improvements so keep your new kitchen and bathroom facturas).

As of 2016, the capital gains tax rate in Gran Canaria is 19% for the first 6.000 Euros, 21% from 6.000 to 50.000 Euros and 23% from that last amount upwards.

However, one advantage of the fall in Gran Canaria property prices over the last 10 years is that few sellers have to pay capital gains tax.

Tax exemption

Avoid paying capital gains tax by reinvesting the money from the sale of a main residence property into another main residence property within two years. EU nationals, even non-residents, can also avoid this tax if they buy a new main residence property anywhere in the EU within two years.

To claim the exemption you need to be able to prove that a property has been your main residence. A good reason to get a ‘certificado de empadronamiento’ certificate from your Ayuntamiento as soon as you buy your house.

Mortgage cancellation fees

If you cancel a mortgage when you sell a property, expect to pay 1% or more of the outstanding balance for the privilege, plus up to 1000 euros to register the cancellation at the Notary and Property Registry. You can sometimes pass the mortgage on to the buyer if the terms are acceptable. 

Buying property in Gran Canaria is a relatively straightforward process if done correctly. The island property registry is excellent, property rights in Gran Canaria are clear, and all contracts must be signed in front of an independent notary.

However, there are pitfalls and we advise all buyers to use a quality estate agent and / or a local lawyer to check their chosen property and contracts.

Laura Says: Estate agent services are free for property buyers as the commission is paid by the seller. Take advantage and find a good one to help you buy your Gran Canaria property

Estate agents in Gran Canaria

Estate agents in Gran Canaria vary from the average to the excellent with a couple of outlying dodgy outfits (targeting non-resident buyers in the resorts). Check reviews carefully before choosing an agent. 

Estate agency fees are 5% of the sale price of a property but are paid by the seller. This means that their services are free to buyers; All non-native Spanish speakers should use one when buying property in Gran Canaria.

The risks of going it alone are just too high to bother with as disputes takes a long time and oodles of cash to resolve.

To find a good estate agent in Gran Canaria, look for the following…

• An estate agency with an office you can visit and a good local reputation
• An agency that works within the local agency ssystem and shares commissions with other agents
• An agent that speaks your language and good Spanish
• Above all, choose an estate agent that cares about you, rather than about selling you a particular property

The benefit using a good estate agency include their ability to value a property accurately (many sellers list their property at the price they’d like to get rather than what it is currently worth), the help they provide with paperwork, and good relationships with reliable local banks.

In Las Palmas and the north of Gran Canaria, the Las Palmas Property website is packed with useful information.

In south Gran Canaria, just go to Cardenas Real Estate; One of Gran Canaria’s oldest and most trusted agencies. The Cárdenas blog is an excellent source of quality local information.

Laura Says: Do not buy a rental investment property in south Gran Canaria without getting expert advice from a good estate agent or lawyer. Holiday let rules are complex.

The cost of buying property in Gran Canaria

The total cost of buying a property in Gran Canaria is roughly 10% on top of the price you pay.

This sum includes:

• Fixed property purchase tax (the exact percentage varies depending on property type and Municipality)
• Notary costs (a fixed percentage of the value of the property)roperty registry costs.
• Property registry costs.

The 10% figure is approximate. It can be up to 12% if you buy a cheapie under €100,000 and lower if you buy something substantial.

Laura Says: Seek expert advice if a seller wants you to pay a percentage of the purchase price in cash under the table. This is illegal and has tax implications as the government knows what property is worth and asks for extra taxes on properties that are bought too cheap. You could end up with a huge tax bill up to four years after you buy a property.

Ongoing costs include:

• Monthly Communidad fees (if you buy in a building or complex)
• A small annual tax on the value of the land your property sits on (known as the IBI)
• Utility bills
• There are no council tax bills in Gran Canaria but some municipios, such as Mogán, charge for rubbish collection

What you need to buy a property in Gran Canaria

All buyers must have:

A Spanish NIE number; This fiscal identification number, which you will soon learn by heart, is the same number that goes on your green Residencia paper. Getting a NIE is a faff unless you have a job contract or a pre-contract to buy a property (or are a non-EU citizen investing 500,000 euros in Spanish property; Hello Golden Visa).

A local bank account; Opening a non-resident bank account can be a faf. It's best to wait until you have your NIE and then you'll have no problem.

British and other non-EU/ EEA buyers may need a military authorisation if buying a rural property. This is a formality but can take time so start the application early. 

Getting a mortgage in Gran Canaria

Spanish banks learned their lesson rather too well during the crisis and are now cautious about lending money to home buyers. Residents need between 10% and 20% of the sale price as a deposit and a work contract to even be considered (or a long track record of earnings as an Autonomo or self-employed person).

New arrivals often have to wait a year to get a mortgage, even with a permanent work contract. This might seem infuriating, but it’s no bad thing if you consider the number of people who go home after a year in Gran Canaria; not everyone can handle the sunshine and the rum.

Spanish banks currently won’t lend you more than you can pay back with a third of your total income.

Non-residents need a larger deposit (typically 30%) and proof of earnings in their home country going back six months. Spanish banks are unwilling to lend to older non-residents who are due to retire before their mortgage term is up.

Mortgage applications are long-winded (up to three months at some banks) and hampered by top-down management at Spanish banks. Your application is submitted in Gran Canaria but goes to headquarters (always in Madrid) for approval. Any missing documents cause delays that nobody is accountable for. Be vigilant and don’t be afraid to push as silence is often a sign that something needs to be done.

The best advice we can give you is to apply to several different banks; They all require the same paperwork so all you have to do is spend a few hours at each one and feed them with photocopies.

Apply to at least one big local bank such as Santander, BBVA or Bankia, a modern bank such as ING Direct, and a specialist mortgage provider such as UCI (which works exclusively with estate agency clients).

Article written with information from Laura Leyshon of Las Palmas Property.

We've asked Laura Leyshon, our favourite Las Palmas estate agent, to put together this set of useful tips about buying a property in Las Palmas.  

Written by Laura Leyshon, resident estate agent and Las Palmas property expert. 

Get a current nota simple before you buy a Las Palmas property

The Gran Canaria property registry is excellent and keeps detailed information about every registered property on the island. You can access this information by going to the registry and asking for a nota informative or nota simple for any property on the island. All you need is the exact address.

A nota informativa contains a detailed description of the property as it was registered, information about the legal owners, any mortgage on the property and any unpaid taxes or fines. 

It is vital that you see an up-to-date nota informativa and compare the information it contains with the property you're considering. Any discrepancies must be explained fully by the owner.

The best time to ask for a nota informative is just before you put down a deposit and sign a pre-contract (known as an arras contract) because then you know that you have seen the most up-to-date version.

You need to see an updated one before you pay for your Las Palmas property.

See the area at different times

As with all urban areas, the zone around your Las Palmas property is important and I advise you to visit it several times ar different times of the day and night to make sure that you know what to expect. For example, some streets are quiet during the day but lively at night, while others don't get much sunshine due to taller buildings around them. 

If you can't visit the area more than once, ask on forums, or just ask your Las Palmas estate agent for an honest opinion.

Which way is it facing?

Everyone who buys a property in Las Palmas wants lots of natural light and sunshine, but you can have too much of a good thing. For example, south-facing properties with large windows can heat up during the summer and you may need to factor in the extra cost of air conditioning. Conversely, shaded or north-facing buildings can be cold in the winter (Las Palmas properties don't have cavity insulation). This may seem like a minor point, but it's worth knowing exactly what to expect before you buy. 

Check urban plans for the zone

If your Las Palmas property has a view, or you think there may be plans for the local area, you can check this in the ayuntamiento (Town Hall). The urban planning department is open to the public on Tuesdays and you need to speak Spanish to find out anything useful. A chat with planning will tell you if any plots in the area have building projects approved and whether there are any serious projects that may cause noise. 

Bilingual representative

Unless you speak (and read) fluent Spanish, it is vital that you have a bilingual representative before you buy a Las Palmas property. If you don't, you could easily miss something in the contract or misunderstand the owner. Also, Spanish notaries have an obligation to make sure that all parties fully understand a contract before they sign. If you don't speak Spanish, then the notary could refuse to let you sign the contract.

Your representative can be a bilingual estate agent, a gestor (a mix between an accountant and an advisor), or a lawyer (you need one familiar with Spanish property law and Canarian tax regulations); Just make sure that whoever you choose is completely transparent with you at all times.

Identity numbers and bank accounts

To buy a property in Gran Canaria, you need to have a local bank account and a NIE (Spanish ID number for foreigners). You can apply for a NIE from your nearest Spanish consulate at home, but it is much quicker to get one in Gran Canaria once you have a pre-contract to buy a property.  

All you need to open a non-resident bank account is a passport.

Communidad and derramas

Most apartments buildings in Las Palmas have a community of owners (all residential properties must have one by law if they contain more than 3 separate properties). Each owner pays a monthly fee (called the communidad) for building maintenance and services at a rate determined by the proportion of the building that they own. Community fees vary considerably and can range from €30 to €200 per month.

When the community fee isn't enough top pay for building repairs of maintenance, the community organises a derrama to raise the money. All members of the communidad are obliged to pay their share, although payments are normally staggered over a period of at least a year.

It is always worth asking about the communidad and any derramas before you buy in Las Palmas and especially if you plan to buy an older property; Owners have been known to sell up rather than pay a large derrama. If you have any doubts, ask for the contact details of the president of the community of owners (they are elected by the communidad).

Study home and local mortgage options and apply to several local banks

Non-resident mortgages are available in Las Palmas but can take a while to arrange and you need a larger deposit and higher earnings than a resident buying the same property. I'd advise all buyers who need a mortgage to look into both local and home mortgages, and to apply to several local banks at the same time.

This avoids having all your eggs in one basket and means that you have a better chance of success. 

Relax: Some things take time

As a British estate agent in Las Palmas, I strive to get everything done as efficiently and quickly as possible. However, experience has taught me that while everything gets done in the end, some procedures in Las Palmas just take time. For example, mortgage applications, property valuations and even legal paperwork are sometimes delayed, especially around the summer and Christmas holidays.

Because local owners and buyers are used to delays, purchase option contracts often last for three months to make sure that both parties have time to get everything in order. While most purchases happen faster, there is no way of rushing a Spanish bank or a property valuer. Sometimes, as infuriating as it is, you just have to wait. 

Use an agency: It's free

It is perfectly possible to buy a property in Las Palmas without using an estate agency provided that you speak Spanish and have detailed knowledge of all the relevant laws. However, because agency commissions are paid by the seller,  I advise all buyers to use the services of an estate agent. 

Having a local agent in your corner to arrange viewings, advise you on current market prices and make sure that the whole buying process goes without a hitch is invaluable. 

Laura Leyshon is Las Palmas' leading British estate agent and works for one the city's oldest and most trusted agencies. She knows the Las Palmas property market inside out and is always happy to answer any questions you have. 

If you've visited Gran Canaria's capital city and decided that it's the place to buy a holiday property or even to live, here's some really useful info that you need to know about the Las Palmas property market.

For serious Gran Canaria shopping, a trip to the capital Las Palmas is always a good day trip. As one of Spain's ten biggest cities it's got the island's biggest malls, one of the country's top outdoor shopping areas and so many authentic cafes and restaurants that you'll struggle to stay focused on the task at hand.

Las Palmas is full of supermarkets, but which chain is best, and where do you go for the fresh stuff and the exotic stuff? Here's how to do your food shopping like a local in Las Palmas de Gran Canaria.