Canary Islands (IC)
The Canary Islands are Spain's Atlantic autonomous community: Tenerife, Gran Canaria, Lanzarote, Fuerteventura, La Palma, La Gomera, El Hierro and La Graciosa.
Buying Property in Canary Islands
The full buying process, transaction costs, mortgage, and legal requirements.
Spain has one of the highest homeownership rates in Europe (~76%) — a cultural norm fuelled by decades of tax incentives and cheaper credit. Foreign nationals face no legal restrictions on buying property. The process is formal: mandatory notario (notary) for all property transactions, mandatory Registro de la Propiedad inscription, transfer tax (ITP for second-hand; IGIC + AJD for new build). Transaction costs typically 10–13% of purchase price. 2025 reforms: ITP increases in some CCAAs for non-residents; the 2023 Ley de Vivienda restricted rent price growth in stressed zones but didn't directly affect purchase. Golden Visa abolished 3 April 2025 (Ley Orgánica 1/2025) — real estate investment no longer grants residency.
Rent vs. Buy
Renting offers flexibility and avoids 10–13% transaction costs. Spain's rental market is increasingly tight (Madrid, Barcelona, Valencia, Palma, Málaga) with 30+ applicants per listing — buying is often the practical route for long-term stability if capital and credit allow. Rule of thumb: buying breaks even after 5–8 years in major cities. Price trend 2021–2024: +8–15% nominal rises in major cities; 2025–2026 stabilised with soft correction in premium zones. Mortgage rates 2026: ~3.2–3.8% fixed 20–25 years. EU Energy Performance Certificate (EPC / Certificado Energético) mandatory for every sale — low classes (E, F, G) increasingly discounted as EU Renovation Wave imposes efficiency floors by 2030.
Buying Process — Step by Step
Obtain NIE
2–8 weeksForeign buyers (EU or non-EU) must have a NIE (Número de Identidad de Extranjero) to complete any property transaction. Request at Policía Nacional - Extranjería or Spanish consulate abroad. Needed before opening bank account, signing escritura, registering title.
Define budget and financing
2–6 weeksMaximum price = available capital ÷ 0.20 for 20% deposit + 10–13% transaction cost buffer. Non-resident foreigners typically finance up to 60–70% LTV vs 80% for residents. Contact banks (Santander, BBVA, CaixaBank, Sabadell, Bankinter) or a broker (Idealista Hipotecas, iAhorro, TrioTeca) for a pre-aprobación de hipoteca. Bring proof of income + tax returns + bank statements.
Search properties
Ongoing; 1–6 months typicalIdealista (market leader), Fotocasa, Habitaclia (Catalonia), Pisos.com, Tecnocasa, Engel&Völkers. Direct contact with agents (inmobiliarias) common. Attend visitas (viewings). In hot markets (Madrid Chamberí, Barcelona Eixample, Valencia Ruzafa) move quickly or lose the property.
Make an offer and sign contrato de arras (reservation deposit)
1–2 weeksOnce verbal agreement, sign Contrato de Arras (usually arras penitenciales under Art. 1454 CC): you pay 5–10% deposit that secures the property. If buyer withdraws: loses deposit. If seller withdraws: must refund double the deposit. Alternative: Contrato de Señal or Reserva — simpler but weaker legal protection. ALWAYS get a lawyer (abogado) to review before paying anything.
Due diligence
1–3 weeksOrder Nota Simple from Registro de la Propiedad (€9) — shows ownership, encumbrances (cargas), mortgage, arrests. Request Certificado de Deudas from Comunidad de Vecinos (no outstanding comunidad debts). Check IBI receipts up to date. Verify Certificado Energético. For older buildings: request Inspección Técnica de Edificios (ITE) status. Structural survey (informe técnico) €300–800 for older property — NOT standard in Spain but recommended.
Mortgage formalisation
4–8 weeksFinalise mortgage with bank: bank sends FEIN (Ficha Europea de Información Normalizada) + FiAE (Advertencias Estandarizadas). Mandatory cooling-off: 10 days minimum between FEIN and signing at notario (Ley 5/2019 de Crédito Inmobiliario). Bank sends docs to notario. You visit notario for mortgage pre-signing certificate (acta de transparencia) BEFORE main escrituración — confirms you understood terms.
Notario appointment — Escritura Pública
Single day once scheduled (2–4 weeks to schedule)All parties (buyer, seller, mortgage bank if applicable) meet at notaría. Notario reads the Escritura de Compraventa aloud (legal requirement), verifies ID, drafts deed. Buyer transfers remaining purchase price to seller (typically via cheque bancario nominativo or direct transfer confirmed). Seller hands keys. Notario submits electronically to Registro de la Propiedad. Non-Spanish speakers: bring interprete jurado (sworn interpreter) or lawyer.
Pay taxes (ITP or IGIC + AJD)
Within 30 working days of escrituraSecond-hand property: ITP (Impuesto sobre Transmisiones Patrimoniales) 6–10% of purchase price (varies by CCAA: Madrid 6%, Cataluña 10%, Valencia 10%, Andalucía 7%). Pay via Modelo 600 within 30 working days of escritura. New-build property: IGIC 7% (standard Canary Islands rate for new residential property — compared to 10% IVA on mainland Spain; 3% super-reduced rate for primary residence up to €200,000 for buyers aged up to 40, per 2026 Budget update) + AJD 0.5–1% (Canary Islands rate). Failure to pay within 30 days accrues late interest + sanctions.
Registro de la Propiedad
15–60 daysNotario automatically sends telemática to Registro within 24h. Full inscription takes 15–30 days (fast-track in some provinces). Pay registro fees (~0.2–0.5% of purchase price). You receive Nota de Inscripción confirming ownership.
Post-purchase
2–4 weeksRegister change of titularidad: IBI (property tax), basura (waste), Comunidad de Vecinos. Transfer utilities: luz (Endesa, Iberdrola, Naturgy, EDP), gas (Naturgy, EDP), water (municipal), internet. Update empadronamiento to new address within 3 months. Contract Seguro de Hogar (mandatory if mortgaged). Register new owner for purchased vehicle taxes if applicable.
Transaction Costs
| Cost Item | Amount | Notes |
|---|---|---|
| ITP (Impuesto sobre Transmisiones Patrimoniales) — second-hand only | 6%–10% of declared purchase price (or valor de referencia Catastral, higher) | CCAA-specific: Madrid 6%, País Vasco 4%, Canarias 6.5%, Andalucía 7%, Galicia 8%, Aragón 8.5%, Cataluña 10%, Valencia 10%. Since 2022 Hacienda uses "valor de referencia catastral" as tax base if higher than declared price — can shock non-resident buyers. Some CCAAs apply extra 1–2 pts for non-residents or properties >€400k. |
| IVA (VAT) — new-build only | 10% of purchase price (residential); 21% (commercial/land/garaje separado) | Paid to developer as part of purchase price. Plus AJD 0.5–1.5% on top. |
| AJD (Actos Jurídicos Documentados) — new-build only | 0.5–1.5% of purchase price | CCAA-specific. Madrid 0.75%, Cataluña 1.5%, Andalucía 1.2%, Valencia 1.5%, País Vasco 0.5%. |
| Notario fees | ~0.5–1.0% of purchase price (scale-regulated) | Fixed by RD 1426/1989 Arancel notarial. For €300,000: ~€900–1,200. Mortgage notario fees separate (paid by bank since 2019 reform). |
| Registro de la Propiedad | ~0.2–0.5% of purchase price | For €300,000: ~€600–1,200. Also regulated by Arancel. |
| Gestoría | €300–800 flat | Manages tax payments, Registro filing, post-purchase administration. Optional but helpful. Often bundled by bank if mortgaged. |
| Abogado (Lawyer) | €1,000–3,000 or 1% of purchase price | Highly recommended for non-Spanish speakers or non-residents. Reviews contract, due diligence, represents you at notario. |
| Tasación (Mortgage valuation) | €300–600 | Paid by buyer; bank chooses licensed tasador (valuation firm). Valid 6 months. |
| Mortgage setup | Variable — apertura fee 0–1% of loan + AJD on mortgage paid by bank (since 2019) | Since Ley 5/2019, bank pays notario fees + Registro + AJD on the mortgage. Buyer pays only apertura + tasación. |
| Total transaction costs | 10–13% of purchase price (second-hand) | For new-build: 11.5–15%. Budget conservatively 12% for safety. |
The Notary — Mandatory for All Purchases
In Spain, ALL property transactions require a notario público (notary) — an official appointed by the Ministerio de Justicia. The notario: (a) drafts the escritura pública de compraventa; (b) verifies identity of parties; (c) confirms the property details from Nota Simple match; (d) reads the escritura aloud (legal requirement); (e) collects signatures; (f) submits electronically to Registro de la Propiedad and Hacienda. The notario represents neither buyer nor seller but is a neutral public official. You can choose your own notario — many use one near the property. Fees are regulated (Arancel). Verbal agreements to buy/sell property are NOT binding; only an escritura pública de compraventa at notario transfers ownership.
Mortgage
Spanish mortgages (hipotecas) offered by traditional banks (Santander, BBVA, CaixaBank, Sabadell, Bankinter), online banks (MyInvestor, Openbank, ING) and mortgage-only lenders. Three types: Fija (fixed, 70% of new mortgages 2026), Variable (Euribor + spread, common before 2022), Mixta (fixed 3–10 years then variable). 2026 rates: Fija 20y around 3.0–3.5%, Fija 25y 3.3–3.8%. Plazo (term) max 30 years (40 for young buyers some banks). Always have a 10-day cooling-off period after FEIN before signing.
Residents (Spanish or foreign with NIE + tax domicile Spain): 20% deposit + 10–13% costs = 30–33% upfront. Non-resident foreigners: 30–40% deposit + costs = 40–53% upfront. Banks lend against lower of purchase price or tasación. Some banks offer 100% financing only for bank-owned property (activos inmobiliarios adjudicados).
EU citizens: treated almost like Spanish residents if tax-domiciled in Spain (resident tax declaration). Non-EU: 30–40% deposit standard. Need: NIE, passport, last 2 years tax returns, last 3 payslips, last 6 months bank statements, certificate of income from employer, visa status. Some banks (Sabadell, BBVA Non-Residents, Santander Select) specialise in non-resident mortgages. Brokers (iAhorro, TrioTeca, Mortgage Direct for English speakers, Fluent Finance Abroad) can significantly improve rates and approval chances. Non-resident mortgages typically 0.25–0.5 pp higher than resident rates.
Land Registry
The Registro de la Propiedad is public, held by the Ministerio de Justicia in each provincial district. Every property has a Registro entry (finca registral) showing: titularidad (ownership), cargas (encumbrances — mortgage, embargo, servidumbres), descripción física, superficie, historial de transmisiones. Order a Nota Simple (€9) online at registradores.org — essential before any offer. The notario submits telematically after escritura; full inscription 15–60 days. After inscription you receive inscripción de dominio confirming ownership. Always keep the Nota de Inscripción — key document alongside the escritura.
Taxes
Annual: IBI (Impuesto sobre Bienes Inmuebles) — municipal property tax, 0.4–1.1% of valor catastral (usually 30–60% below market), so typically €200–2,000/year for residential. Basura (waste tax) €80–200/year. Comunidad de Vecinos monthly fees €30–200/month. For non-residents renting out: IRNR (Impuesto sobre la Renta de No Residentes) at 19% (EU/EEA) or 24% (others) on rental income or imputed income of 1.1–2% of valor catastral if not rented. Modelo 210 quarterly/annually. Selling: Ganancias Patrimoniales (capital gains) 19–28% progressive on profit; resident exemption if reinvesting in primary home or over 65 selling habitual residence. Plusvalía Municipal (IIVTNU) paid by seller to Ayuntamiento on land-value increase — reformed 2021 so real-loss cases no longer pay.
New Build vs. Existing Property
New-build (obra nueva): 10-year estructural warranty (Ley de Ordenación de la Edificación 38/1999) against structural defects, 3-year warranty for habitability, 1-year for finish defects. Higher transaction tax (IGIC + AJD vs ITP 6–10%) but newer installations, energy efficiency A–B. Avoid unfinished developments if developer balance sheet weak — demand aval bancario (bank guarantee) on amounts paid during construction per Ley 38/1999 art. 1. Existing (segunda mano): cheaper taxes, established neighbourhood data, possible reforms needed. Check for ITE (Inspección Técnica de Edificios) status for buildings 45+ years old. Barcelona, Madrid, Valencia have started enforcing ITE rigorously. Energy-efficient reforms (aerotermia, aislamiento, ventanas) increasingly subsidised via Next Generation EU funds — check Plan de Recuperación y Resiliencia and CCAA aid programmes.
Selling Property
Seller's obligations: provide Certificado Energético (EPC), deliver property free of cargas and comunidad debts, pay Plusvalía Municipal to Ayuntamiento, declare Ganancia Patrimonial in annual IRPF. If non-resident seller: buyer must retener (withhold) 3% of purchase price and pay to Hacienda via Modelo 211 — this is prepayment against seller's capital gains. Seller pays agent commission (typically 3–5% + IVA, negotiable) if agent engaged by seller. Expect 2–4 months from listing to notario in balanced markets; 2–6 weeks in hot markets.
Useful Links
Property Buying
Unlock the complete Property Buying guide for Canary Islands — including every detail, document, tip and link you need.
Become a SupporterSupport the guide on Ko-fi · Unlocks every premium section, everywhere