When purchasing a new-build property, you pay 10% VAT (IVA) or 7% IGIC in the Canary Islands on the purchase price, in addition to other expenses such as notary fees, Land Registry fees and administrative costs.
Therefore, you should consider additional costs of approximately 12% to 14% on top of the purchase price.
NEW BUILD
When we talk about new-build properties, in most cases we refer to a property that is not yet built and has a future delivery date. This date may be sooner or later, but it is fixed and stated in the purchase contract.
The advantages of new-build properties are numerous:
• You will be the first owner; the property is brand new.
• There are no special assessments or imminent repair costs due to wear and tear.
• You can plan payments and organise your finances to meet the full budget.
• You buy off-plan, and many developers allow certain customisations or changes.
There are also risks.
The main risk relates to the developer and construction company. You must ensure they are reputable and financially stable companies to avoid unpleasant surprises, such as potential bankruptcy.
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What costs will we have to pay?
For new-build properties, you pay 10% VAT (IVA) or 7% IGIC in the Canary Islands, plus notary, Land Registry and administrative fees.
In total, you should calculate additional costs between 12% and 14% of the purchase price.
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Property reservation
The reservation stage is important because it helps you structure your investment.
The first step is to pay a reservation deposit of between €3,000 and €12,000 to secure the property.
In the following months, staged payments are made, usually covering around 30% of the property value.
The remaining balance is paid at the notary’s office upon completion and handover of the keys.
This is particularly attractive if you are an investor.
If you have done your research properly, the property may already have increased in value by the time of completion, becoming a solid investment. However, as mentioned earlier, careful analysis is essential.
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At this stage, we are here to help. Gracia Real Estate, experts in the area, with deep knowledge of developments and locations, can recommend options tailored to your profile.