Buying cooperative housing in Fuerteventura

Buying cooperative housing in Fuerteventura

Cooperative housing in Fuerteventura represents an attractive and economical option in the new construction market. Unlike traditional real estate developments, where a development company manages the entire process, in cooperatives it is the future owners themselves who take the reins.

This modality eliminates the figure of the developer, significantly reducing costs and offering a more democratic way of accessing housing.

Operation of cooperative housing

Incorporation and management process

A housing cooperative is a non-profit entity formed by people with a common need for access to housing. These members come together to acquire land, design and develop the housing project. The structure of the cooperative is based on democratic participation, where each member has a voice and a vote in key decisions.

Sign up for our real estate exchange

For a cooperative to operate legally, it must be registered in the Cooperative Registry of the autonomous community. In addition, it usually has a Governing Council that acts as a governing and representative body. This council is responsible for overseeing management and ensuring that the project progresses as planned.

Initial advantages and disadvantages

One of the main attractions of cooperative housing in Fuerteventura is the economic savings. By eliminating the role of the developer, costs are reduced, resulting in homes that are up to 20% cheaper than those managed by developers .

However, this model also presents challenges, especially in terms of initial financing. Partners must contribute significant capital at the outset, which can be a barrier for some buyers.

The initial capital is divided into several stages: the cooperative incorporation fee, periodic payments during construction and other expenses associated with the purchase and sale and formalization of the mortgage. This disbursement can represent up to 30% of the total cost of the house before applying for the mortgage.

Will the transaction be subject to IGIC?

In the Canary Islands, when you buy a house through a cooperative, instead of paying VAT, you will pay IGIC (Canary Islands General Indirect Tax).

This tax applies to payments you make in advance as a member of the cooperative. These payments are considered advances on the total price you will pay for the home when it is delivered to you.

Cooperative vs. second hand and developer housing

Buying a home always involves evaluating various financial options. Cooperative housing, although it requires a greater initial financial effort, can be more economical in the long term due to the savings in mortgage interest.

For example, for a 300,000 euro home, the savings in mortgage interest can be significant. If a 30-year mortgage of 210,000 euros with a fixed interest rate of 3.03% is chosen, the monthly payment would be approximately 888.77 euros, and the total interest over the term of the loan would be 109,957.14 euros. In comparison, a mortgage on a new-build home managed by a developer would amount to 282,000 euros, with a monthly payment of 1,193.49 euros and total interest of 147,656.73 euros. This represents a saving of almost 40,000 euros in interest for the buyer of a cooperative home.

Although cooperative housing in Fuerteventura requires a higher initial outlay, this effort is offset by lower long-term costs. Compared to the purchase of a second-hand home, where initial expenses include 20% of the purchase price and other taxes and administrative costs, the investment in a cooperative may be higher initially, but more beneficial in financial terms in the long term.

If you want to buy in cooperative, please contact us, we have interesting projects to tell you about.

Sign up for our real estate exchange