Tenerife, Gran Canaria, Lanzarote, Fuerteventura — in demand year-round, ITP 6.5% on resale — one of Spain's lowest transfer-tax rates.
A special economic zone, but not tax-free: resale ITP 6.5%, new-build IGIC 7% instead of IVA 10% (plus AJD 0.75%). Overall 0.5–3.5% less than the mainland on resale, ~3% on new builds.
Tenerife (south): largest tourism market. Gran Canaria: city and beach. Lanzarote: architecturally appealing, less touristy. Fuerteventura: cheapest, water sports.
For non-residents as on the mainland: up to 70% LTV, term up to 25 years — several major Spanish banks with branch networks on all four main islands.
On resale purchases in the Canary Islands — Tenerife, Gran Canaria, Lanzarote, Fuerteventura, La Palma — ITP applies at a flat 6.5 %, calculated on the higher of purchase price and cadastral reference. That is one of Spain's lowest transfer-tax rates. An important distinction: only on new builds does the Canary IGIC (7 %) plus AJD 0.75 % replace Spanish IVA; on resale properties ITP applies, not IGIC. Some buyer groups qualify for reduced rates; for the foreign second home the standard rate applies. The islands offer a year-round mild climate and good access via several airports. Important for financing: the bank finances the purchase price, not the 6.5 % ITP and the other incidental costs — you must cover those from equity. As of 07/2026; the rules in force at the time of purchase govern.
Tenerife — the largest island; the south (Costa Adeje, Los Cristianos) premium tourism, the north cheaper. Gran Canaria — Maspalomas, Meloneras, Las Palmas (university, year-round). Lanzarote — shaped by art (César Manrique). Fuerteventura — a surfers' mecca, the longest beaches.
The Canaries = a special economic zone. On resale, ITP applies at the standard rate of 6.5% — one of Spain's lowest, but not zero. On new builds the Canarian IGIC (7%) replaces IVA (10%), plus AJD at 0.75%. Overall 0.5–3.5% less than on the mainland on resale (ITP 6.5% instead of 7–10%), and roughly 3% less on new builds (IGIC 7% instead of 10% IVA).
Spanish banks finance in the Canaries as on the mainland: up to 70% loan-to-value for non-residents. Several major Spanish banks have good branch networks on all four main islands.
The Canaries have Europe's most stable climate corridor. Even in January rarely below 18 °C in the coastal areas. Year-round lettability or personal use.
Tourist letting with a Vivienda Vacacional (VV) licence. Rules differ by island and municipality. Southern Tenerife and southern Gran Canaria are classic tourism zones. Residential areas partly with restrictions.
TFS/TFN (Tenerife South/North), LPA (Gran Canaria), ACE (Lanzarote), FUE (Fuerteventura). Year-round direct flights from all major German cities. 4–5 hours' flight time.
Tenerife and Gran Canaria have their own markets, tax details and locations — a dedicated page for each.
North–south split, two airports, the largest holiday market in the Canaries.
Las Palmas as a real year-round city plus the tourism south around Maspalomas.
Concrete sample calculations for typical foreign buyers — as a guide for your own plan.
| Item | Amount |
|---|---|
| Equity | €90,000 (31%) |
| Mortgage | €200,000 (69%) |
| Purchase costs (~9%) | ~€26,000 (ITP 6.5%) |
| Loan-to-value | 69% LTV |
| Example payment (20 yrs, 3.1%) | ~€1,115/month |
| Bank type | Major Spanish bank · Tenerife |
Model calculations without guarantee. Not binding offers. Terms vary depending on credit profile, property and bank. No tax or legal advice.
| Item | Amount |
|---|---|
| Equity | €125,000 (33%) |
| Mortgage | €255,000 (67%) |
| Purchase costs (~10%) | ~€38,000 (IGIC 7% + AJD 0.75%) |
| Loan-to-value | 67% LTV |
| Example payment (20 yrs, 3.1%) | ~€1,420/month |
| Bank type | Major Spanish bank · Gran Canaria |
Model calculations without guarantee. Not binding offers. Terms vary depending on credit profile, property and bank. No tax or legal advice.
Pre-filled with typical values for this region — adjust and calculate.
Guide value without guarantee. Spain: max. 70%, Portugal: max. 80% loan-to-value for non-residents. Purchase costs = ITP/IMT + notary + land registry + lawyer + NIE/NIF. Total outlay = equity + purchase costs + all payments over the term. For a binding offer, contact us.
Model calculations without guarantee. Not binding offers. Terms vary depending on credit profile, property and bank. No tax or legal advice.
The complete breakdown with your exact figures — loan, equity required, total interest — straight to your inbox.
The same rules of the Comunidad Autónoma de Canarias apply across every Canary island — from Lanzarote to La Palma without distinction. A paid-off property in the Canary Islands does not have to be sold to free up capital — it can be mortgaged instead.
For inheritance, the rules of the autonomous community holding the highest value of the Spanish estate apply. With a single Spanish property that is simply its region. The relief must be claimed within the filing deadline — miss it and it becomes contentious.
How far a Spanish bank will go on an unencumbered property, what changes with the owner's age, and what the released money may be used for is set out in full under releasing capital from a Spanish property.
A gift of the released money to a child is taxed in Germany, not in Spain — see inheritance and gift tax in Spain. This is not tax advice; Inheritance tax, groups I and II (parents, children, spouses). Autonomous tax law changes; review quarterly.
Planning a purchase in the Canary Islands? A free initial consultation in English — also German, French, Dutch, Spanish, Russian. I review your situation and find the right bank in Spain.
Monthly instalment, total cost and equity requirement for your exact figures.
Anonymised examples of how buyers financed their property in the Canary Islands.