Buying a New Build or Existing Home in Lanzarote: The Complete Guide

Lanzarote, one of Spain’s iconic Canary Islands, has become a coveted destination for people seeking sun, culture, and real estate investment. Whether you’re dreaming of a coastal villa, a peaceful inland retreat, or a rental-friendly apartment, the choice between buying a new build or an existing home in Lanzarote is central to your decision. This comprehensive guide explores every aspect of purchasing property on this enchanting volcanic island, helping you navigate the choices, processes, and opportunities of Lanzarote real estate.

Table of Contents

1. Why Buy Property in Lanzarote?
2. Lanzarote Real Estate Market Overview
3. New Build vs Existing Home: Understanding the Basics
4. Advantages of Buying a New Build Home in Lanzarote
5. Advantages of Buying an Existing Home in Lanzarote
6. Legal Considerations and Requirements for Foreign Buyers
7. The Property Purchase Process: Step-by-Step
8. Prime Locations for New Builds and Existing Homes in Lanzarote
9. Investment Potential and Rental Yields
10. Making Your Choice: Key Questions to Ask
11. Living in Lanzarote: Lifestyle, Climate, and Community
12. Conclusion

1. Why Buy Property in Lanzarote?

In recent years, Lanzarote has attracted international attention as a property hotspot, renowned for its stunning volcanic landscapes, year-round sunshine, and welcoming atmosphere. As part of Spain, it offers both European Union standards and a unique blend of Spanish and Canarian culture. Here’s why you should consider investing in Lanzarote:

• Year-round temperate climate with over 300 days of sunshine annually.
• World-class beaches, unique landmarks, and a slower pace of life ideal for relaxation or retirement.
• Strong tourism sector, enabling options for renting out properties for short or long-term income.
• Attractive pricing compared to mainland Spain and other European hotspots.
• Secure legal framework for property transactions, with clear rights for non-resident and foreign buyers.
• Accessibility: Well-connected to Europe by air, with direct flights from major cities.

For these reasons, Lanzarote is not just a vacation paradise, but also a sound option for second homes, permanent moves, or property investments.

2. Lanzarote Real Estate Market Overview

The Lanzarote property market offers diversity, stability, and growth. Understanding market trends will help you make a well-informed decision between buying a new build or an existing home.

Property Types Available

• New Builds: Modern villas, townhouses, or apartments, often found in new developments or urbanizations, built to the latest energy and safety standards.
• Resale/Existing Homes: Older properties, ranging from traditional Canarian houses to converted apartments or established beachfront villas.

Current Market Trends (2024)

• Steady price growth over the past five years, with a slight surge in demand for new builds due to modern amenities and turnkey convenience.
• Resale homes remain popular in prime locations, especially among buyers seeking authentic Lanzarote character or larger plots.
• Rental market remains buoyant, providing robust yields in popular areas.
• Developers are increasingly offering off-plan and customizable new build options.

Typical Price Ranges

• Apartments: €120,000 – €400,000, depending on location and age.
• Townhouses/Villas: €250,000 – €1,500,000+, with higher prices for luxury new builds in coastal areas.
• Rural Fincas: Vary widely, often offering more space for your money but requiring more renovation if older.

Prices vary across the island, with resorts like Playa Blanca, Costa Teguise, and Puerto del Carmen commanding premium prices, while inland villages offer better value for money.

3. New Build vs Existing Home: Understanding the Basics

The decision between a new build or an existing home in Lanzarote is foundational. Let’s clarify what each category means and their general characteristics:

What Is a New Build Property?

A new build is a home that:

• Is recently constructed or still under development.
• Has never been previously owned or occupied.
• Features contemporary design, materials, and compliance with current building codes.
• May be bought off-plan (before completion) or post-completion directly from the developer or builder.

What Is an Existing Home?

An existing home, also called a resale property, is a:

• Pre-owned home in any condition or age, from a few years old to a historic property.
• Property featuring established landscaping, mature neighborhoods, and sometimes requiring renovation.
• Home that may have unique features, character, and proven rental or resale history.

Each has distinct pros and cons regarding price, availability, lifestyle, appreciation, and maintenance.

4. Advantages of Buying a New Build Home in Lanzarote

Many buyers are attracted to Lanzarote’s growing inventory of new build homes. Let’s explore the key advantages of going new:

1. Modern Amenities and Design

New builds are typically constructed with contemporary European standards in mind, offering features such as:

• Energy-efficient heating and cooling systems
• Double-glazing and insulation for comfort
• Smart home wiring, integrated security systems, and connectivity
• Modern kitchens, open-plan layouts, and luxury bathrooms

This can mean lower running costs and easier living, particularly for buyers seeking move-in-ready convenience.

2. Customization and Personalization

When buying off-plan or during the construction phase, you may have a say in:

• Floorplans, fixtures, and finishes
• Appliance packages and color schemes
• Landscaping and outdoor space

This allows you to tailor your home to exact tastes and requirements, a rare luxury in established homes.

3. Lower Maintenance and Warranty Coverage

• All systems and materials are brand new, reducing the immediate risk of repairs.
• Developers typically provide a 10-year building guarantee (seguro decenal) covering structural defects, plus shorter warranties for fixtures and finishes.
• Peace of mind and cost predictability in early years of ownership.

4. Compliance with Latest Regulations

• New builds must adhere to the latest Spanish and EU building codes, including seismic safety, energy efficiency, and accessibility.
• More sustainable and easier to insure.

5. Attractive Finance and Payment Plans

• Developers often offer staged payment structures for off-plan properties.
• Sometimes incentives such as reduced closing costs, furnishing packages, or special interest rates are available.

6. Community Facilities and Infrastructure

• Many new developments include swimming pools, gyms, communal gardens, and security.
• Often centrally located near new amenities, transport, and shopping.

7. Strong Rental Appeal

• Travelers increasingly seek modern comforts and Instagram-worthy interiors.
• Easy compliance with tourist rental licensing (Vivienda Vacacional, or VV).

In summary, a new build is highly appealing if you want modernity, low upkeep, flexibility, and a warranty safety net.

5. Advantages of Buying an Existing Home in Lanzarote

While new builds offer flash and convenience, many buyers are drawn to the unique benefits of existing homes on this historic island.

1. Established Locations and Mature Neighborhoods

• Prime beachfront and village plots are often fully developed: only existing homes provide unrivaled access.
• Well-established communities with authentic Canarian culture.

2. Character, Charm, and History

• Lanzarote’s traditional architecture features thick volcanic stone walls, vibrant colors, handcrafted woodwork, and lush gardens.
• Older homes have mature landscaping, unique layouts, and stories to tell.

3. Competitive Pricing

• Existing homes can offer better price per square meter, especially if cosmetic updates are needed.
• Scope for negotiation with private sellers eager to move quickly.

4. Immediate Availability and Proven Track Record

• No waiting for construction: what you see is what you get, with established service connections (water, electric, internet) and clear title history.
• Properties may come furnished or with quality upgrades already completed.
• Can check rental record or neighbor reviews where applicable.

5. Flexible Modernization

• While some buyers see renovation as a drawback, others view it as a path to personalization, modernization, and value creation.
• Improving an older property can significantly boost resale and rental value.

6. Often Larger Plots and Unique Features

• Many older villas or fincas sit on more generous plots than modern developments allow.
• Unique features such as mature fruit trees, artisan tiling, wine cellars, or historical protection are common.

7. Established Rental Histories

• If you intend to let your property, a proven rental record simplifies income forecasting and regulatory compliance.

Ultimately, existing homes are perfect for those craving location, authenticity, and the freedom to create their own space.

6. Legal Considerations and Requirements for Foreign Buyers

Lanzarote, as part of Spain, provides a clear legal route for both EU and non-EU buyers to purchase property. However, it’s crucial to understand local law, taxes, and procedures to ensure your investment is protected.

Eligibility to Buy

• There are no restrictions on foreign ownership in the Canary Islands.
• You do not need residency; anyone can buy property as an individual, couple, or company.

Documents Required

• NIE (Número de Identificación de Extranjero): A tax identification number, mandatory for all property buyers. Easily obtained via Spanish consulates or in Lanzarote.
• Valid passport or EU photo ID.
• Proof of address and financial documentation when opening a Spanish bank account.

Role of Professionals

It is highly advisable to engage:

• An independent solicitor (abogado) to handle due diligence, contract review, and title checks.
• A notary (notario) for the signing and public registration of deeds.
• Optional: translator, mortgage broker, architect (especially for major renovations or new builds), and estate agent (inmobiliaria).

Property Taxes and Ongoing Costs

• Transfer tax (ITP): 6.5% (on resale properties).
• VAT/IVA: 7% on new builds (plus 1% AJD – Documented Legal Act tax).
• Notary, registration, and legal fees: ~2-3% combined.
• Ongoing costs: Community/condominium fees (for apartments), annual property tax (IBI), rubbish collection (basura), and utility bills.

Licenses and Regulations

• For new builds, ensure the licencia de primera ocupación (certificate of first occupancy) and proper planning permissions exist.
• For tourist rental, verify the property can obtain a VV license.

Financing Options

• Spanish banks lend up to 70% of value to non-residents, more for residents.
• Prepare documentation in advance and compare rates.

A professional, step-by-step approach will insulate you from risk and ensure compliance at every stage.

7. The Property Purchase Process: Step-by-Step

Whether you favor a new build or resale, the buying process in Lanzarote follows a structured path. Here’s what to expect, and how the process differs between new and existing homes.

Step 1: Research and Shortlisting

• Identify your budget, property needs, and preferred locations.
• Connect with trusted local estate agents and property portals.
• Visit properties in person whenever possible, or arrange video tours.

Step 2: Make an Offer

• Negotiate with the seller (for resale) or developer (for new build).
• Submit a reservation deposit (typically €3,000 – €6,000) to hold the property during due diligence.

Step 3: Legal Checks and Due Diligence

• Your solicitor checks ownership, debts/encumbrances, urban planning compliance, and rental eligibility.
• For new builds, verify licenses, construction insurance, and bank guarantees.

Step 4: Private Purchase Contract (Contrato de Arras)

• Sign a binding contract specifying the price, payment terms, completion date, and what is included.
• A further deposit is paid (typically 10% for resales, staged payments for new builds).

Step 5: Completion and Handover

• The sale is finalized at a notary’s office.
• Remaining funds, taxes, and fees are paid; title is transferred.
• For new builds, ensure snag lists (defects) are addressed before final payment.
• Take possession and register the property in the Land Registry.

Typical Timelines

• Resale properties: 6–12 weeks, depending on complexity and funding.
• New builds off-plan: Several months to 1–2 years, depending on construction progress.

At every stage, regular communication and independent legal support are vital for smooth completion.

8. Prime Locations for New Builds and Existing Homes in Lanzarote

Lanzarote’s regions offer something for everyone. The balance of new builds vs. existing homes varies by location—here are the most popular spots:

1. Playa Blanca

• New Build: Luxury houses, villas, and apartments in gated developments with sea views.
• Existing Homes: Resale villas close to the marina or town center, often with mature gardens.
• Very popular with British, Irish, and German buyers.

2. Puerto del Carmen

• Existing Homes: Many established apartments and villas, with proven rental history.
• New Build: Limited due to mature development, but some modernizations and smaller urbanizations appear.
• Close to the airport and buzzing nightlife.

3. Costa Teguise

• New Build: Some new apartment complexes; great amenities for families.
• Existing Homes: Townhouses and villas on tranquil streets.
• Famous for windsurfing beaches and international schools.

4. Arrecife (The Capital)

• New and Existing: Best value for city apartments and penthouses, walking distance to local life.
• Lively markets, shopping, and cultural attractions.

5. Rural Villages (Yaiza, Tias, Haría, Teguise)

• Existing Homes: Authentic fincas (farmhouses), Canarian townhouses, larger plots with mountain/sea views.
• New Build: Niche opportunities for custom-built homes in private settings.

6. Orzola, Caleta de Famara, La Santa

• Pacific northern and western coasts favored by surfers, artists, and those seeking tranquility.
• Existing homes dominate, but new boutique projects are appearing.

It’s crucial to match your location choice to your lifestyle—seafront for easy tourism rentals, or inland for more privacy and authentic life.

9. Investment Potential and Rental Yields

Whether seeking a holiday home or pure investment, Lanzarote presents appealing financial prospects. Understanding the specifics of each property type will help you maximize returns.

Rental Opportunities

• Short-term holiday lets: High demand year-round, especially in coastal resorts and modern/new build homes. Yields 5-8% per annum are possible in peak locations.
• Long-term leases: Growing demand from expat professionals, digital nomads, and locals. Relatively stable income, slightly lower yields (3-5%) but less volatility.

New Build vs Existing Home Investment

• New Builds:
  • Attract premium rental rates due to modern features, energy efficiency, and instant appeal.
  • Lower upfront maintenance and snag list costs.
  • Greater initial investment, but higher resale potential if in sought-after areas.
• Existing Homes:
  • Potential for value-add through renovation and modernization.
  • Lower entry price, but may require larger immediate investment in upgrades.
  • Proven rental histories make income projections easier.

Factors Influencing Value Appreciation

• Scarcity of available land, especially close to the coast and resorts.
• Ongoing infrastructure projects—e.g., improved transport, tourist attractions.
• Limited supply of high-quality homes maintaining price stability.
• Strict building codes and protected landscapes limit overdevelopment.

Rental Licensing and Regulation

• Tourist rental (VV) licenses subject to local council rules; usually straightforward in purpose-built areas.
• Some new builds are “tourist only”—ensure your use matches permission.
• Professional management companies offer turnkey solutions for investors abroad.

Resale Prospects

• New builds: Strongest resale appeal within first 10 years, especially if still under warranty.
• Resale/older homes: Refurbishment and upgrades can unlock new buyer segments.

The best investment strategy depends on your personal risk profile, time horizon, and commitment to active management versus passive income.

10. Making Your Choice: Key Questions to Ask

Before committing to a purchase, use this checklist to clarify your needs and priorities:

• What is your primary goal? (Personal use, retirement, holiday home, pure investment)
• How important is location? Are you drawn to established, lively areas or quieter, less developed spots?
• What is your preferred style? Do you favor modernity and low maintenance, or traditional character and potential for upgrades?
• Are you willing to oversee renovation or do you want turnkey convenience?
• Do you require rental income, and if so, how soon?
• Are there personal considerations, such as proximity to beaches, schools, hospitals, or golf courses?
• What is your budget, including taxes, fees, and projected upgrades?
• How comfortable are you managing property remotely? Will you use a management company?
• How patient can you be? New builds often involve longer wait times, while existing homes can be occupied almost immediately.

Discuss your answers with a trusted estate agent, solicitor, and (if applicable) architect. Take the time to visit possible areas and properties—your dream home or investment is out there, but a strategic approach will make finding it easier.

11. Living in Lanzarote: Lifestyle, Climate, and Community

Deciding between a new build or an existing home is just the start. Understanding day-to-day life in Lanzarote will reassure you that your choice leads to the lifestyle you seek.

Climate: The Island of Eternal Spring

• Lanzarote enjoys a year-round subtropical climate: average daily highs 21-29°C, with gentle breezes and low rainfall.
• No need for heavy heating bills; modern homes use passive cooling and solar power for energy efficiency.

Culture and Heritage

• Rich Canarian traditions mingle with Spanish and global influences.
• Iconic museums, art galleries (especially those of César Manrique), lively Fiestas, and a vibrant sense of community.

Outdoor Life

• Spectacular beaches, volcanic hiking trails, world-class surfing, golf, and sailing are all at your doorstep.
• Fertile volcanic soil means homegrown fruit, vegetables, and wine are abundant.

Healthcare and Services

• Well-equipped public and private hospitals and clinics.
• Professional services available in English, German, and other languages.

International Community

• Large resident populations from the UK, Germany, Ireland, Scandinavia, and beyond.
• International schools, clubs, and social groups foster integration and support.

Whether you choose a new build in a gated resort or an old finca in the hills, life in Lanzarote is relaxed, safe, and offers a true sense of belonging.

12. Conclusion

The decision to buy a new build or an existing home in Lanzarote hinges on understanding your personal tastes, financial goals, and lifestyle aspirations. New builds represent cutting-edge luxury, low maintenance, and modern conveniences, while existing homes offer tradition, prime locations, and character. Both options are supported by a secure legal framework and promise strong investment potential in one of Europe’s most enduringly popular island destinations.

Armed with the insights from this guide, take the following steps:

1. Define your goals and must-haves.
2. Research locations and compare both new builds and resale properties.
3. Engage qualified local professionals—solicitors, estate agents, inspectors—to protect your interests.
4. Consider both the immediate benefits and long-term prospects of your chosen property type.
5. Explore Lanzarote first-hand to experience its magic before making your final commitment.

With careful planning and the right information, your Lanzarote home—be it sparkling new or charmingly established—will deliver sun-soaked days, a welcoming community, and a path to investment success.

Ready to start your Lanzarote property journey? Prioritize your preferences, seek guidance from trusted local experts, and soon you could be living the dream on this incredible island. Happy house hunting!