Checklist: Sell your real estate on Gran Canaria

You want to sell your property in Gran Canaria, then you will find the most important information, tips and explanations about the intended sale of your property here.

The interest in buying and the desire for a domicile in Spain are still huge and unbroken, the prices are going up and the Canary Islands are booming. Some owners are selling due to the increased purchase prices, others want to expand or downsize and the next one wants to part with the respective property for reasons of age. These are all understandable motives from which a future property buyer can benefit, because a new owner naturally gets the opportunity to enjoy the wonderful year-round temperatures of Gran Canaria and the beauty of the island, as well as the newly acquired property.

How many properties are sold per year in the Canary Islands?

In 2021, around 24,500 properties were sold in the Canary Islands. Almost 30 % more than in 2020. The reasons for this are not least the dramatically increased inflation of currently between 8-10 %, negative interest rates on savings, dissatisfaction with political decisions in the countries of origin, the war in Ukraine and the desire for a change. Sun, light, mountains, beach and sea as well as the cosmopolitan, friendly and liberal culture attract people to Gran Canaria.

Forecasts and development of the real estate market 2022 in Gran Canaria.

In all likelihood, due to the reasons summarised above, the boom in real estate in the Canary Islands will continue. These are the majority opinions of leading estate agents, local politicians and the media. Internationally, property prices in Gran Canaria are still moderate when compared to places of interest in other countries.

How do I find out the correct and market selling price?

There are many ways to find the right price: Either you ask your neighbour, you use a random generator or you look how much space is left in your account. Joking aside, use the expertise of a reputable real estate agency with many years of experience in the real estate market in the region where your property is located. Sun World Real Estate is mainly active in the south of Gran Canaria, so we are particularly familiar with the areas around Maspalomas, Playa del Inglés, San Agustín, Meloneras, San Fernando, Pasito Blanco, Playa del Águila, Bahía Feliz, El Tablero, Salobre Golf and the Sun Land. Internationally, valuation methods such as the asset value method, the capitalised earnings value method and the comparative value method are recognised. In Gran Canaria, the asset value and comparative value methods are generally used.

Where can I find a reputable and reliable estate agent in Gran Canaria?

Of course, I would love to write: "Feel free to contact us using our numerous contact options", but I don't want to go that far with the self-praise. Nevertheless, we are of course happy about every customer contact, a little self-promotion should be allowed at this point. Every now and then, one or the other seller will think, "What should I do with an estate agent, I can save this money", but many underestimate the experience, the tasks, the assessment, the support and the broad network to be able to realise a successful and satisfactory property sale. The estate agent is almost indispensable for the valuation, because he knows the market and the achieved sales proceeds, he often has an existing portfolio of interested parties to which the requirement profile is tailored.

Rarely do doubts arise regarding the legality of a property, which the estate agent clarifies in part with the help of architects and/or specialist lawyers. Furthermore, the real estate agency supports the seller with tips on sales-promoting decoration, design or even crucial repairs. The tasks include sounding out prospective buyers, organising and carrying out viewings, creating attractive photos/videos, exposés, conducting negotiations, obtaining the necessary documents, preparing an option contract with an inventory list and the subsequent preparations up to the notary appointment and beyond.

The broker's commission is usually paid by the seller in Spain, and the invoice (factura) can be deducted from the profit tax return if there is a difference between the purchase price at the time and the sales price achieved today. However, due to the permanent price increases in recent decades, this is almost always the case.

What documents are required when selling property in Gran Canaria?

1. In any case, it is important to have an up-to-date extract from the land register (nota simple or nota informativa), which you can get at the responsible land registry office, the Registro de la Propiedad. In our municipality of San Bartolomé de Tirajana we have a total of two land registry offices. We have direct online access, so we can get an up-to-date extract within 24 hours.
2. A valid Energy certificate (certificado de eficiencia energética), this is mandatory, we are happy to assist you in obtaining it, the architect's fees are usually between € 90 - € 150.
3. Certificates of freedom from debt from the municipality (certificado no deudor) and the Certificate of freedom from debt from the residential community (comunidad), insofar as one exists, which is usually not the case with detached villas, fincas or houses.
4. Documents of the owners association: Such as the house rules / statutes, the last minutes of the owners' meeting.
5. The last utility bills, which are needed not least for the re-registration of water and electricity.
6. Identity documents / NIE number:Make sure that your identity card or passport have not expired.
7. Certificate of habitability (cedula de la habitabilidad):A document that is talked about from time to time, but is very rarely asked for in practice on Gran Canaria.

What taxes must be paid when selling property in Gran Canaria?

There is a lot of half-knowledge circulating on this point and there is always potential for confusion. Very often, the profit tax is confused with the value added tax. Both taxes are counted as vendor taxes.

The profit tax, often also referred to as capital gains tax or speculation tax, is payable on the difference between the purchase price at that time and the sales price today. Assuming you bought a house or flat for 200,000 € 12 years ago and are now selling it for 300,000 €, you have to pay tax on the difference of 100,000 € at the following tax rates. Of course, you can still deduct various costs from the "profit", for example the estate agent's bill, the ancillary purchase costs at the time (land transfer tax, notary, land registry, tax office) or also some (not all) official bills of alterations, which are possible exactly, the tax office checks. It is important that all data as well as your NIE number are visible on the official invoices. If you as the seller are not a tax resident in Gran Canaria, 3% of the purchase price must be withheld as a kind of advance tax payment (A-Conto payment). This 3% must be paid by the buyer to the tax authorities. When you file your tax return after the sale, these 3 % will be offset. If you have not made a profit, you will be refunded this 3%. If the profit is higher, you will receive a friendly request for additional payment.

Tax rates profit tax on the sale of real estate in Gran Canaria (here with main residence):

19 % with a net profit of up to 6.000 €

21 % between 6.000-50.000 € net profit

23 % between 50.000-200.000 € net profit

26 % over 200.000 € net profit

I would like to say a few words about the value added tax (plusvalía), a controversial tax that has been paid by the seller for years. This tax benefits the municipality in which the property is located. The reasoning is that since the municipality has made improvements to the infrastructure such as roads, squares, promenades, parks, etc. with tax money over the years, the respective seller also benefits from these public investments with an increase in value. For the exact calculation we have a contact in the municipality (Ayuntamiento), so we are happy to arrange the corresponding calculation within 2 working days. The calculation is based on the cadastral value of the property and the length of ownership.

If you wish, we can recommend a dedicated, competent tax office based in one of the office towers of the "Edificio Mercurio", in Playa del Inglés.

Payment and cancellation of a mortgage from the land register when selling the property.

If the respective property is encumbered with a mortgage, this is basically not a problem, we just need to know and will find out at the latest when applying for a current extract from the land register. In the case of a notarial sale, a certificate from the beneficiary bank about the exact amount of the remaining debt to be paid must be available on the day of the notary's appointment. This certificate is called: Certificado de saldo de préstamo/crédito hipotecario. So the seller will be paid the balance, minus the possible retentions / costs / or still open financing.

I hope I have helped you with these tips for selling your property. Sun World Real Estate has been active in Gran Canaria for 13 years now. With all the tasks and customer contacts, the most beautiful moment from my point of view is and remains looking into the satisfied and happy faces of buyers and sellers in the notary's office. And how could it be otherwise, we are also happy about a completed transaction and the associated receipt of money in the account. At this point, I would like to say a big thank you for the trust of many customers in the past years, I know that some of them read my blog entries from time to time. Life is truly not a one-way street, which is why I always live by the motto: "Live and let live", and if you know someone who would like to sell or buy a property, there is always a financial bonus as a thank you for a successful mediation.

Sunny greetings from our common favourite island Gran Canaria,

Kai Derichs