Properties go quickly
Less stock on the market means shorter decision windows. Buying in Lanzarote rather than on one of the other Canary islands means planning for that time pressure from the start.
Region focus · Spain · Canaries · §34i
Buying an apartment in Lanzarote — financing in a tight market
Lanzarote has less supply than the rest of the Canaries because of its strict building rules. That changes neither the tax rate nor the loan-to-value frame — but it does show up in the bank's valuation.
In short
How high is transfer tax (ITP)?
6.5% on resale — the standard Canary rate, one of Spain's lowest. On a new build IGIC 7% instead of IVA 10%, plus AJD 0.75%.
How much will a Spanish bank lend?
Up to 70% of the lower of purchase price and tasación — the standard Canary frame, whether apartment, house or finca.
Why is supply tighter here?
The César Manrique building rules limit heights and new-build land more strictly. Fewer comparable sales make the tasación come in conservatively more often.
How do non-residents finance a property purchase on Lanzarote?
Lanzarote belongs to the Canary Islands, so the same regime applies as on Tenerife and Gran Canaria: banks typically lend up to 70% of the lower of purchase price or their own valuation (tasación), and the transfer tax (ITP) on resale properties is 6.5% — one of the lowest rates in Spain. The island's César Manrique-inspired building code limits new construction, which keeps supply tight and can make bank valuations more conservative than on larger islands. We recommend clarifying financing capacity before making an offer, since good properties move quickly on a limited market. The strict height and design rules apply island-wide and directly affect resale value and rentability — one reason experienced buyers on Lanzarote specifically look for properties with established, already-approved status.
Building rules as a location factorSupply Valuation Sequence
Why supply in Lanzarote is tighter
César Manrique shaped the island's building rules over decades: low building heights, limited land for new build, no high-rises on the coast. The result is an architecturally consistent island — and a noticeably tighter property market than Tenerife or Gran Canaria.
Fewer reference points
With fewer comparable sales the valuation firm has fewer reference points, so the tasación comes in conservatively more often than on a larger market.
Financing before reservation
Settle the financing before a property is reserved. In a tight market that is not caution — it is the only way to move at the speed the market demands.
Tax and loan-to-value
Buying a house or an apartment in Lanzarote — the Canary frame covers both
Apartment, house or finca: on resale, Lanzarote applies the standard Canary ITP rate of 6.5 % — one of the lowest in Spain. On a new build the Canary IGIC (7 %) takes the place of IVA (10 %), plus AJD of 0.75 %. Banks lend non-residents up to 70 % of the lower of purchase price and tasación — measured against their own valuation, not against the price you had in mind.
Notary, land registry, the valuation and — where a mortgage is taken — the cost of registering it come on top. Full overview: purchase costs in Spain. Tax rates change; these figures are as of July 2026 and are not tax advice.
Consequence of a tight market
When the valuation lands below the price
Because a smaller market offers the valuation firm fewer comparable properties, the tasación in Lanzarote deviates downwards from the actual purchase price more often than on larger islands. Anyone calculating tightly should plan that difference in as an additional equity item from the outset — not once the loan offer comes in lower than hoped.
The mortgage readiness check sets out the realistic frame in a few minutes — before a deposit is committed.
If the Spanish bank says no
The second route: mortgaging a German property
Self-employed applicants with fluctuating earnings, buyers close to the age limit, income earned outside the euro area or a property without a robust valuation regularly get a no from the Spanish bank. In that case an unencumbered property in Germany can be mortgaged instead and the capital used as equity here — often faster, and without a Spanish bank having to value your property at all. Details under German property as security.
FAQ
Frequently asked about Lanzarote
How high is transfer tax (ITP) in Lanzarote?
6.5 % on resale — the standard Canary rate and one of the lowest in Spain. On a new build the Canary IGIC of 7 % replaces the regular IVA of 10 %, plus AJD of 0.75 %.
How much will a Spanish bank lend for an apartment in Lanzarote?
Up to 70 % of the lower of purchase price and tasación — the standard Canary frame, whether the property is an apartment, a house or a finca.
Why is supply in Lanzarote tighter than on the other Canary islands?
The building rules shaped by César Manrique limit building heights and land for new build more strictly than on Tenerife or Gran Canaria. That keeps the island architecturally consistent, but it also restricts what is available — with consequences for the bank's valuation.
Does tight supply affect the financing?
Indirectly, yes: fewer comparable sales mean fewer reference points for the valuation firm, so the tasación comes in conservatively more often than on a larger market.
What if the Spanish bank says no?
Self-employed applicants with fluctuating earnings, buyers close to the age limit or income from outside the euro area sometimes get a no. Mortgaging an unencumbered German property then remains a route — often faster, and without a Spanish bank having to value your property.
Settle what is financeable — before you reserve
It costs nothing and it prevents the most expensive mistake in a foreign purchase: a committed deposit without secured financing.
Related
Read on
Structure
German property as security
Raising the equity in Germany when the Spanish bank stops short.