Canary Islands: IGIC on a new home and ITP on resale

Why the Canary Islands are different

Spain’s VAT does not apply in the archipelago; the islands apply IGIC under their own consolidated text, Decreto Legislativo 1/2025 of 13 October 2025, which brings together the IGIC and AIEM rules. The transfer and stamp taxes (ITP and AJD) remain the national taxes, but the Canary Islands set their rates. If you buy a new home from a developer, expect an invoice with IGIC. If you buy a resale home from a private individual, the tax to look at is ITP. For how ITP works elsewhere in Spain, see the ITP guide.

IGIC on a new home

Article 32.1 sets the general rate at 7%: it applies to supplies of goods and services not subject to another rate. Article 38 lists the rates specific to housing. A new home that fits none of the reduced cases pays the general rate of 7% (article 38, paragraph Cinco).

The conditions for 3% and 5%

For the 3% rate, all of these must be met:

1. The home will be the buyer’s main home.
2. The buyer is 40 or under on the date the tax falls due, or belongs to a large family, or has a recognised disability of 65% or more, or is a woman victim of gender violence with a protection order or final judgment, or belongs to a single-parent family as defined in the regional text.
3. The household income in the previous calendar year does not exceed €46,455, increased by €15,315 if tax is filed jointly.
4. The taxable amount does not exceed €200,000, or €300,000 for a large family of the general category, €400,000 for the special category.
5. At the date of the supply the buyer does not own, or hold a bare ownership or usufruct of, another home, or sells it by public deed within two years.
6. Before or at the supply, the buyer gives the seller a declaration that the conditions are met and undertakes to report any later breach.

For the 5% rate, the home is the buyer’s main home, the taxable amount is within the same €200,000 / €300,000 / €400,000 limits, and the buyer holds no other home (or sells it within two years). No age or income test is stated.

These two rates were amended by Ley 9/2025 of 23 December 2025, in force from 1 January 2026. A buyer who later fails the main-home or other-home condition must file an occasional return and pay the difference with interest. The law lets the Canary tax office require sellers to report reduced-rate deliveries.

Stamp duty on the deed

Article 36 of Decreto Legislativo 1/2009 sets the general AJD rate on notarial deeds at 0.75% but fixes 1% where the document relates to operations subject to IGIC or VAT, so 1% for a new home. Article 37 gives a reduced 0.40% on first copies of deeds for a main home that meets the conditions for the reduced ITP rate or bonuses listed there.

Resale: ITP at 6.5% or 5%

Under article 31.1.a, the general ITP rate on a home is 6.5%. The rate is 5% if three conditions hold: the home will be the buyer’s main home (every buyer must be an individual), the taxable base, including garages and annexes, is €200,000 or less, and the buyer owns no other home at the date of the transfer (or sells it within two years). Article 35 adds a 20% reduction of the tax computed at 5% for a first main home if the buyer is 40 or under and the income cap is met. Calculation: on a €180,000 resale home that meets the 5% conditions, ITP is €9,000; at the general rate on €250,000 it is €16,250.

Which professional to consult

A lawyer registered with a Spanish bar association (colegio de abogados), see property lawyer, can check whether your declaration to the developer matches the conditions. The notary records the declaration in the deed.