Canary Islands purchase taxes: ITP 6.5%, IGIC 7%

Why the new-home tax is IGIC and not VAT

Spain’s VAT does not apply in the Canary Islands. The first sale of a new home by a developer is taxed under IGIC, whose general rate is 7% (art. 32.1 of the IGIC consolidated text, Decreto Legislativo 1/2025, in force since 21 October 2025). Article 38 sets the home-specific rates:

“No other home” means the buyer must not own, or hold the bare ownership or usufruct of, another home at the date of the delivery; otherwise it must be sold by public deed within two years. For the 3% rate the buyer gives the developer a written declaration that the conditions are met, and it is added to the deed.

A separate guide covers this in depth: IGIC on new homes in the Canary Islands.

ITP on resale homes

The decree on ceded taxes (art. 31.1.a) fixes, for transfers of real estate, 6.5% as the general rate. The consolidated text updated on 29 December 2025 and in force from 1 January 2026 shows the amendment by Ley 9/2025 as having effect from 1 January 2025; the rate itself in force today is 6.5%.

The rate becomes 5% if all of these apply:

1. the property will be the buyer’s main residence (if there are several buyers, they must all be individuals and the home must be the main residence of each);
2. the taxable base, garages and annexes in the same building included, is €200,000 or less (for several buyers, the sum of their shares);
3. at the date of the transaction the buyer owns no other home, or sells it by public deed within two years.

Judicial, administrative and notarial auctions pay 7%, unless these same conditions turn it into 5%. Other reduced rates:

• 1% (art. 32) for large families, with a household income base of up to €46,455 plus €18,200 for each child above the legal minimum, and no other home;
• 1% (art. 33) for a buyer with a disability of 65% or more, or where a person the buyer claims for in family allowances has it;
• 0% (art. 34) for the transfer of a protected home, public or private, that will be the buyer’s first main residence;
• a 20% bonus on the tax at the 5% rate (art. 35) for a first main residence where the buyer has never owned another property, plus either age 40 or under with income up to €46,455 (plus €6,825 per dependant giving a family allowance) or being a woman victim of gender violence. On €200,000 that brings €10,000 down to €8,000.

Buyers who claim a reduced rate or bonus on a main residence must present a certificate showing they meet the requirements (art. 38).

AJD on the deed

Article 36 sets AJD at 0.75%, but “cuando se trate de documentos relativos a operaciones sujetas al IGIC o al IVA, el tipo se fija en el 1 por 100”. A new home is subject to IGIC, so the deed pays 1%. Article 37 reduces the rate to 0.40% on first copies of deeds of a main residence meeting the conditions of the reduced rates and bonuses of arts. 32, 33, 33 bis, 34, 35 and 35 bis.

Worked example (calculation, not a quote)

These figures apply the published rates to round prices.

• €300,000 resale, general case: 6.5% × €300,000 = €19,500.
• €200,000 resale, main residence, no other home: 5% × €200,000 = €10,000. At €200,001 the 5% rate is lost and 6.5% would apply to the whole price: about €13,000.
• €300,000 new home, general case: IGIC 7% = €21,000; AJD at 1% = €3,000 on a base of €300,000.
• €200,000 new home, buyer aged 38, main residence, income within the limit: IGIC at 3% = €6,000; AJD 1% = €2,000 (0.40% = €800 if the deed meets the art. 37 conditions).

The base comes from the national rule: the higher of the price, the declared value and the Catastro reference value at the date of the transfer (art. 10 of the 1993 text).

What non-resident and foreign buyers should know

Neither the ITP articles nor the IGIC article read here treat non-residents differently. What decides the rate is whether the home is a vivienda habitual (IRPF definition) and whether the buyer owns another home. A buyer who owns a home elsewhere, in Spain or abroad, should ask a professional how the “no other home” test is read: the text speaks of ownership of “otra vivienda” without limiting it to Spain.

The buyer is the taxpayer of ITP under national law whatever the contract says (art. 8.a), and the lender is the taxpayer of AJD on the mortgage deed (art. 29). A foreigner will need a Spanish tax number before signing: see the NIE guide.

Filing

ITP and AJD are self-assessed. The Canarian tax authority is the Agencia Tributaria Canaria; its forms and deadlines were not read for this guide, so confirm them with the agency or the professional who files. The IGIC on a new home is charged by the developer on the invoice and is not filed by the buyer, except that a buyer who ceases to meet the main-residence or no-other-home conditions must file an occasional declaration for the month of the breach (art. 38.Tres).

Areas popular with foreign buyers

Payotte’s zone data for the Canary Islands covers Adeje and Arona in the south of Tenerife, San Cristóbal de La Laguna and Santa Cruz de Tenerife, Las Palmas de Gran Canaria, and San Bartolomé de Tirajana in the south of Gran Canaria. The tax system above applies in all the islands.

Which professional to consult

A lawyer registered with a Spanish bar association (colegio de abogados) can read the “other home” condition against your situation; see property lawyers. The purchase costs calculator shows the general rates.