Which taxes you pay when buying in the Canary Islands
Resale: Property Transfer Tax (ITP). The general rate in the Canary Islands is 6.5%, on the price or on the Land Registry reference value if that is higher. There are reduced rates for the main home of certain groups; their requirements change with each budget law, so the calculator lets you choose the rate. Details in the ITP calculator.
New build bought from the developer: there is no VAT in the Canary Islands. You pay IGIC, 7% on open-market housing, plus stamp duty (AJD) on the deed, which the calculator sets at 1%. Subsidised housing may have lower rates.
The other costs
- Notary: regulated scale that grows with the price. We estimate around 0.25%, between €600 and €1,500.
- Land Registry: also on a regulated scale, around 0.15%, between €400 and €1,000.
- Agency (gestoría): about €350. It is not compulsory, but banks usually require one if there is a mortgage.
- Valuation: about €350, only if you take out a mortgage.
- 7% IGIC on those fees. On the mainland it would be 21% VAT.
Costs of buying a house: how much you need to have saved
If you take out a mortgage, the bank usually lends 80% of the price. You pay the remaining 20% and all the costs. That is why, for a resale purchase in the Canary Islands, you should have around 28% of the price saved. Without a mortgage, the full price plus the costs. To see the maximum price your savings reach, use how much house can I afford.
Frequently asked questions
How much are the buying costs for a home in the Canary Islands?
For a resale home, with the general 6.5% ITP, about 7.5% of the price: around €15,000 for a €200,000 property. For a new build, with 7% IGIC and AJD, a little over 9%.
Are the costs paid with the mortgage?
Usually not. The bank lends a percentage of the price, and you pay the costs from your savings on the day of signing or in the following days.
Who pays the notary, the buyer or the seller?
By law the seller pays for the original deed and the buyer for the copies, but in practice it is almost always agreed that the buyer pays the notary for the sale. The seller pays the municipal capital gains tax (plusvalía).
Can the ITP be paid later?
It is filed and paid with the Canary Islands Tax Agency within a short period after signing the deed. Without the receipt, the Land Registry will not register the property in your name.