Buying property in the Canary Islands: what expats need to know

Can foreigners even buy?

Yes. Foreigners — including those without an EU passport — may in principle buy property in the Canaries. You do not need a residence permit for it. What you do need is a NIE (foreigner tax number), a Spanish bank account and, if you do not live in Spain, a tax representative. Conversely, buying a property gives you no automatic right to reside — the Golden Visa shortcut via property investment was closed to new applicants in April 2025 (see Relocate #21).

In practice: EU citizens moving to the Canaries buy without special hurdles. For non-EU citizens — UK nationals since Brexit, Americans, Swiss — the same applies in principle, but they should know the debate around the 100% tax. More on that next.

The 100% tax: what really applies

In January 2025, Prime Minister Pedro Sánchez announced that non-EU citizens without Spanish residency should pay a tax of up to 100% of the purchase value when buying property — effectively doubling the price. The headline went around the world and rattled UK buyers in particular, since post-Brexit they are non-EU.

The position in June 2026: it never became law. The draft bill was submitted to parliament in May 2025 but then went no further. In March 2026 Reuters reported the measure had stalled in Congress — the minority government lacks the votes. By then the bill had not even been debated.

First step: NIE and bank account

Without a NIE (Número de Identidad de Extranjero) nothing moves. It is your lifelong Spanish tax number and a prerequisite for every step: purchase contract, notary, land registry, tax payment. You can apply for it at the Spanish consulate in your home country — advisable before you intend to close a purchase — or locally at the Oficina de Extranjería or Policía Nacional. In Gran Canaria and Tenerife, expect waits of several weeks for an appointment.

In parallel you need a Spanish bank account. Practically all payments — deposit, balance, taxes, later electricity/water/community fees — run through it. Many notaries insist on a bank-guaranteed cheque (cheque bancario) from a Spanish account at completion.

Taxes and costs, honestly counted

The key rule of thumb: budget 11 to 14 percent on top of the purchase price for taxes and costs. What exactly applies depends on whether you buy resale or new.

Resale property (second or later transfer): the ITP (Impuesto de Transmisiones Patrimoniales) applies. In the Canaries the general rate is 6.5% — one of the lowest in all of Spain. Reductions: 5.2% for under-35s buying a first main home, 5% for large families (each with value and income limits). The ITP is always paid by the buyer, within 30 working days of signing.

New build (first sale from the developer): instead of Spanish IVA, the Canaries levy IGIC (Canarian VAT), plus the AJD (stamp duty). Have the exact IGIC rate for residential property confirmed by the developer or a gestoría, as rates and exemptions vary.

Mind the valor de referencia: the tax is not necessarily calculated on the purchase price but on the higher of the purchase price and the cadastral reference value (valor de referencia). If the official reference value is above your negotiated price, the tax office can assess ITP on the higher value and bill the difference. Know this value before negotiating the price — it can be looked up online via the cadastre.

The purchase process step by step

The typical sequence in the Canaries — from reservation to keys:

1. Reservation (contrato de reserva). You take the property off the market with a small deposit (often €3,000–6,000) for a few weeks. Only sign once the lawyer has given the green light on the first checks.

2. Private pre-contract (contrato de arras). Here you usually pay 10%. Important: with the common "arras penitenciales" you lose the deposit if you pull out — and the seller must pay double if they do. Have the terms read carefully.

3. Completion at the notary (escritura pública). The notary formalises the deed, you pay the balance (usually by cheque bancario), you get the keys. The notary verifies identity and the registry position but is not your representative — that is the lawyer's job.

4. Pay taxes and register. Within 30 working days, pay the ITP (or IGIC + AJD for a new build), then register at the land registry (Registro de la Propiedad). Only registration makes you the legally secure owner against third parties.

Due diligence: what to protect yourself from

The most common expensive mistake by expats: buying without an independent check. The agent represents the seller, the notary is neutral — only your own lawyer (abogado) represents you. That one percent fee is the best insurance in the whole purchase.

What needs checking before signing:

Nota simple: the current land registry extract. Shows who owns the property and whether mortgages, charges or liens ("cargas") are registered. In Spain some debts attach to the property — you don't want to inherit any.

Building and habitability certificates: the first occupation licence (licencia de primera ocupación) or cédula de habitabilidad, and whether extensions or alterations are legalised. The Canaries have many properties with unregistered additions — a classic with older houses and fincas.

Community of owners (comunidad de propietarios): for flats, the certificate that there are no outstanding community debts, plus minutes of any agreed special levies (e.g. façade, lift).

IBI and refuse charge: proof that the annual property tax (IBI) and municipal charges are paid.

After the purchase: ongoing obligations

With the keys, the tax obligations only begin. The main ongoing items:

IBI (Impuesto sobre Bienes Inmuebles): the municipality's annual property tax, based on the cadastral value. Set up a direct debit, or face late-payment surcharges.

Refuse and municipal charges: also annual, depending on the municipality.

Non-resident tax (Modelo 210): anyone who owns the property but is not tax-resident in Spain pays the annual non-resident income tax — even if the flat is only used personally (deemed own-use) and all the more so when let. This is the point that surprises many. UK owners in particular should note: post-Brexit, non-resident landlords are taxed at 24% on gross rental income with no deduction of expenses, where EU/EEA residents are taxed at 19% on net — a real difference. Anyone who moves their tax residence to the Canaries instead falls under normal Spanish income tax (see Relocate #22).

Community fees (cuota de comunidad): for flats, monthly or quarterly to the owners' association.

Questions and answers

As of 02.06.2026. This article is general orientation and does not replace legal or tax advice. Tax rates, deadlines and draft legislation can change at short notice — the binding sources are the Agencia Tributaria Canaria, the land registry and an individual legal review.