Buying a Property in the Canary Islands: What You Need to Know in 2025

The Canary Islands—a group of sun-drenched Spanish islands off the coast of North Africa—have long beckoned foreign property buyers with their blend of dramatic volcanic scenery, vibrant local culture, and a respected legal framework rooted in the European Union. As we move into 2025, the allure of a tranquil Mediterranean lifestyle continues to attract international investors, retirees, digital nomads, and second-home seekers alike. However, behind the region’s appeal lies a property market with its own unique characteristics, regulations, opportunities, and challenges.

This expansive guide examines everything you need to know before buying real estate in the Canary Islands in 2025. Whether you’re pondering a sun-kissed beachfront villa in Tenerife, a city apartment in Las Palmas, or a rural retreat in La Palma, this article will provide clarity, detail, and actionable insights to make your Canarian property purchase a success.

Table of Contents

1. Overview of the Canary Islands Property Market
2. Why Buy Property in the Canary Islands?
3. 2025 Market Trends in Canary Islands Real Estate
4. Types of Properties Available
5. Where to Buy: Island and Location Guide
6. Legal Process of Buying Property as a Foreigner
7. Financing and Mortgages: What Are Your Options?
8. Taxation and Associated Costs
9. Property Ownership Rights and Responsibilities
10. Buy-to-Let and Short-Term Rental Laws in 2025
11. Common Pitfalls and How to Avoid Them
12. Making an Offer and Closing the Deal
13. Life as a Property Owner in the Canary Islands
14. Frequently Asked Questions

Overview of the Canary Islands Property Market

Located in the Atlantic Ocean and part of Spain, the Canary Islands comprise seven main islands—Tenerife, Gran Canaria, Lanzarote, Fuerteventura, La Palma, La Gomera, and El Hierro—plus several smaller isles. Their subtropical climate, stable governance, and robust tourism sector make them one of Europe’s most distinctive property hotspots.

The Canarian real estate market has weathered global economic turbulence better than many mainland destinations. Key factors underpinning this resilience include a steady influx of European buyers, a strong year-round tourist economy, and appealing lifestyle benefits. Properties span everything from modern beach apartments and luxury villas to traditional fincas and rural cottages.

Local law offers a transparent process for non-resident foreign buyers, as Spain (and therefore the Canary Islands) places few restrictions on international ownership. However, due diligence remains essential—especially when navigating regional regulations, tax law, and short-term letting rules that vary across the islands.

Why Buy Property in the Canary Islands?

Many factors drive demand for Canarian property among both Spaniards and internationals in 2025. Here are key reasons buyers are choosing the Canary Islands:

• Climate: The islands boast over 300 days of sunshine per year with mild winters and balmy summers—a major advantage for retirees, holidaymakers, and remote workers.
• Diverse Scenery: Each island is unique, with dramatic volcanic peaks (Teide on Tenerife), lush forests (La Palma), and world-class beaches (Fuerteventura, Gran Canaria).
• Accessibility: Well-connected airports link the islands to mainland Spain and much of Europe, making travel easy and relatively inexpensive.
• Healthcare and Infrastructure: As Spanish territory, the islands offer excellent public health care, EU-standard infrastructure, and the security of operating within the eurozone.
• Lifestyle: The pace of life is noticeably relaxed. Outdoor living dominates, with vibrant local markets, festivals, and a rich culinary tradition.
• Strong Rental Yields: With demand for holiday lets robust across much of the archipelago, especially in resort areas, property can generate significant returns.
• Tax Advantages for Residents: The Canary Islands have special fiscal rules; for example, the IGIC (local sales tax) is lower than mainland Spain’s VAT.
• Stable Legal Environment: Modern property rights, transparent administration, and minimal restrictions for EU and most non-EU buyers.
• Safe Investment: Steady demand and a limited supply of building land provide some stability even in volatile periods.

Each of these factors contributes to the unique mix that makes the Canary Islands a top European property investment destination in 2025.

2025 Market Trends in Canary Islands Real Estate

Understanding current trends can help buyers make informed investment decisions. As of 2025, several significant shifts and patterns are shaping the Canarian property landscape:

Continued Demand from European Buyers

With ongoing political and economic uncertainty in other regions, the Canary Islands continue attracting buyers from Germany, the UK, Scandinavia, France, and increasingly Eastern Europe. Lower-cost flights and attractive entry prices fuel this trend.

Remote Work and Digital Nomads

COVID-era trends towards remote work have permanently extended the range of second-home buyers to include digital nomads, tech workers, and families seeking lifestyle-driven relocations. Stable internet and co-working infrastructure reinforce this shift.

Price Growth Varies by Island and Location

While prime areas in Tenerife (e.g., Costa Adeje) and Gran Canaria (Maspalomas, Las Palmas) have seen sustained price rises, more remote or rural spots have shown steadier, sometimes flat growth, offering value for those willing to renovate or live further off the beaten path.

Sustainability and Eco-Friendly Properties

Eco-conscious buyers are increasingly seeking energy-efficient homes, solar installations, and properties built with sustainable materials. New developments highlight environmental credentials, while traditional fincas are often retrofitted for “green” living.

Tighter Rules on Short-Term Letting

To manage overtourism and preserve neighborhood stability, some island governments have introduced stricter licensing requirements for holiday lets. Tenerife and Gran Canaria, in particular, are updating regulations as of 2025; buyers should understand these before purchasing with rental in mind.

Steady Construction of Modern Developments

In high-demand zones, new-build apartments and villas have been constructed, offering modern fixtures, communal pools, and often on-site amenities. However, availability is still limited compared with demand, supporting prices.

Examples: Current Prices by Area (2025)

• South Tenerife (Costa Adeje): €3,800–€5,300/m²
• Las Palmas de Gran Canaria: €2,600–€3,700/m²
• Lanzarote (Puerto del Carmen): €2,400–€3,600/m²
• Fuerteventura (Corralejo): €2,000–€2,900/m²
• La Palma (Santa Cruz): €1,400–€2,100/m²

Prices can be considerably lower in rural areas or on less-trafficked islands, but the above give a sense of 2025’s urban and resort market averages.

Types of Properties Available

The Canary Islands offer a diverse and distinctive array of property types, from cosmopolitan city apartments to rural cottages surrounded by banana plantations. Understanding these categories is crucial to narrowing your search:

1. Villas

Often found in upmarket resort areas, detached and semi-detached villas typically feature private gardens, pools, and sea views. Designed for families, retirees, or as lucrative vacation rentals, new-build villas comply with the latest energy efficiency standards.

2. Apartments and Condos

City centers and major resort zones (Playa de las Américas, Las Palmas de Gran Canaria, Puerto del Carmen) offer high-rise and low-rise apartment blocks with shared amenities like pools, gyms, and concierge services. Condos in gated complexes are favored by holiday home buyers for security and ease of maintenance.

3. Fincas (Rural Farmhouses)

These traditional properties are scattered across the islands’ lush interiors, with orchards, vineyards, or forest land included in larger parcels. While offering charm and a tranquil lifestyle, fincas often require renovation to meet modern standards.

4. Townhouses and Duplexes

Popular with locals in residential zones, these two- or three-story homes often feature roof patios, garages, and small gardens. They balance privacy with community access—ideal for families or long-term relocation.

5. New Developments and Off-Plan Properties

Planned communities and off-plan projects offer the latest in design and amenities, though buyers should exercise particular caution and use legal counsel to review contracts and developer credentials.

6. Commercial and Mixed-Use Properties

With tourism the islands’ economic engine, shops, cafes, small hotels, and mixed-use buildings offer passive income and business opportunities. Licensing and compliance are complex in this sector, so specialist advice is essential.

Decide on property type based on your intended use, budget, and risk tolerance, keeping in mind that island life brings unique considerations like logistics and maintenance.

Where to Buy: Island and Location Guide

Though often spoken of as a single destination, the Canaries are geographically and culturally distinct from one another. Here is a detailed look at the islands and their key property hotspots in 2025:

Tenerife

The largest and most populous island, Tenerife blends lively resort areas with volcanic backdrops, historic colonial towns, and lush northern landscapes. Its main real estate areas include:

• Costa Adeje/South Coast: Luxury resorts and newest villas/apartment developments; prime for short-term rentals.
• Santa Cruz: Cosmopolitan capital, favored by professionals with city amenities.
• Puerto de la Cruz/North: Green landscapes, more Canarian in character, less touristy but growing in popularity.

Gran Canaria

The archipelago’s second-largest, with a vibrant cultural scene and endless beaches. Top options:

• Las Palmas: Urban apartments, cultural venues, and dynamic expatriate life.
• Maspalomas/Playa del Inglés: Resort-driven villa and condo communities near famed dunes and beaches.
• Agaete and the North Coast: Authentic smaller towns, lower property prices, scenic surroundings.

Lanzarote

Famed for its unique volcanic landscape (a UNESCO Biosphere Reserve) and distinctive architecture, Lanzarote combines family-friendly resorts with rural tranquility.

• Puerto del Carmen/Playa Blanca: Main tourist centers, new developments, excellent letting potential.
• Costa Teguise: Growing residential and resort area.
• Haria and interior villages: Rural retreats, artist studios, lower entry prices.

Fuerteventura

Beloved by windsurfers and sun-seekers, this island is known for vast sandy beaches and a laid-back vibe.

• Corralejo: Main northern resort, surf culture, condos/villas, strong rental return.
• Caleta de Fuste: Central coastal area, slower pace, many new builds.
• Morro Jable/Southern resorts: Growing market, good value for larger homes.

La Palma, La Gomera, and Smaller Islands

These less-developed islands appeal to buyers seeking peace, nature, and a slower pace.

• La Palma: Striking scenery, astronomical observatories, and attractive rural properties.
• La Gomera: Deep ravines, hiking trails, and small towns with a strong community feel.
• El Hierro, La Graciosa: Off-the-beaten-track options with minimal tourism.

Choose your island and location based on lifestyle goals, budget, and proximity to services or attractions.

Legal Process of Buying Property as a Foreigner

The Spanish legal framework governing property purchases applies fully in the Canary Islands, providing security but also requiring careful compliance. Here is a step-by-step guide for foreign buyers in 2025:

1. Obtain a Foreigners’ Identification Number (NIE)

Before initiating any property transaction, foreign nationals must acquire a Número de Identidad de Extranjero (NIE), used in all financial and legal processes in Spain. Apply via the local police station, Spanish consulate, or a legal representative’s Power of Attorney.

2. Open a Spanish Bank Account

To facilitate transactions, pay deposits, and meet mortgage requirements, you’ll need a local bank account. Most banks offer English-language service for major foreign clients.

3. Engage Market Professionals

• Real Estate Agents: Work with reputable agents registered (API) in the Canary Islands, as they understand both market and legal nuances.
• Independent Lawyer: Retain a lawyer specializing in Spanish property law to review contracts, check property titles, and oversee due diligence. Always ensure the lawyer represents you, not the seller or agent exclusively.

4. Due Diligence/Preliminary Checks

Your lawyer should:

• Confirm the seller is the legal owner.
• Ensure there are no outstanding debts, charges, or embargos against the property.
• Verify compliance with zoning, planning, and licensing requirements.
• Check current standing of payments to community, tax authorities, and utilities.

5. Sign Reservation Contract (Contrato de Reserva)

Typically requires a small deposit (€3,000–€10,000) to take the property off the market while formal contracts are drafted.

6. Sign Private Purchase Contract (Contrato de Arras)

The main contract, requiring a down payment of 10% (standard) of total price. This locks both parties into the sale (with penalties for withdrawal).

7. Notary and Completion (Escritura Publica de Compraventa)

Completion takes place at a public notary’s office. Final payment is made, the deed is signed, and possession is handed over. The notary then files the deed with the local Property Registry.

8. Property Registration and Taxes

Following completion, the buyer pays all applicable taxes and fees, and registers the new ownership to secure legal title.

Each step should be carefully managed; never sign or pay significant funds without independent legal advice.

Financing and Mortgages: What Are Your Options?

Many foreign buyers choose to finance Canarian property purchases using a Spanish mortgage. Here is what you should keep in mind in 2025:

1. Spanish Mortgages for Foreigners

Most major Spanish banks lend to non-residents for Canary Islands property, subject to proof of income and ability to repay. Typical loan conditions are:

• LTV (Loan-to-Value): Up to 60–70% for non-residents, up to 80% for tax residents in Spain.
• Terms: Standard duration is 15–30 years, with repayment to end before borrower’s 75th birthday.
• Interest Rates: Variable and fixed rates available; as of 2025, fixed rates are ~3.0–4.2%, while variable rates are indexed to the Euribor plus margin.

2. Required Documentation

• Passport/NIE
• Proof of income/employment (payslips, tax returns, accountant’s letter for self-employed)
• Credit report and bank statements
• Details of existing debts
• Reservation or preliminary contract

3. Costs of Getting a Mortgage

• Valuation fee
• Bank arrangement fee (0.5–1.5% of loan)
• Notary and registration fees
• Property insurance (required)

These extra costs should be calculated into your overall buying budget.

4. Alternative Financing Options

Some buyers access finance in their home country if more favorable. Cash buyers typically have more negotiation power and a faster process.

Taxation and Associated Costs

Understanding the full cost breakdown is crucial when purchasing property in the Canary Islands. Here’s an in-depth look at what you’ll pay in 2025:

1. Purchase Taxes

• Resale (Used) Property: Transfer Tax (IGIC) at 6.5% of declared sale price.
• New Build Property: IGIC (Canary VAT) at 7% plus a 1% Stamp Duty (Actos Jurídicos Documentados).

2. Notary and Legal Fees

• Notary fees: approx. 0.5–1% of property value.
• Legal fees: 1–1.5% (typically a fixed sum agreed with your lawyer).
• Land/property registry: 0.2–0.5%.

3. Ongoing Taxes and Costs

• IBI (Impuesto sobre Bienes Inmuebles): Annual municipal property tax based on cadastral (official) value. Varies by location but typically 0.4–1.1%.
• Community Fees: For apartments and complexes, ranging from €50–300/month depending on amenities.
• Non-Resident Income Tax (IRNR): On imputed rental value for non-resident owners (about 19% for EU/EEA citizens).
• Garbage, local service taxes, and utilities.

4. Capital Gains and Inheritance Tax

Non-residents pay capital gains tax on the profit when selling property—about 19% (for EU/EEA citizens), with some reliefs. Inheritance tax is governed by both national and regional Canarian law, usually with generous allowances for close relatives.

5. Wealth Tax

The Canary Islands apply Spain’s state Wealth Tax on assets over a certain exemption (€700,000 personal allowance plus €300,000 for primary residence), so only high-value property owners are affected. Seek expert advice if your global assets approach this threshold.

6. Example: Total Purchase Costs

For a €300,000 resale apartment:

• Transfer Tax (IGIC): €19,500
• Notary/Registration: €2,500
• Legal Fees: €3,000

Total purchase costs: approx. €25,000, or around 8–10% on top of buying price.

A good lawyer or fiscal advisor is vital to ensure no financial surprises post-completion.

Property Ownership Rights and Responsibilities

Spanish law ensures robust ownership rights for property buyers, whether resident or non-resident. Here’s what you need to know as an owner:

1. Freehold vs. Leasehold

Almost all residential property in the Canary Islands is freehold (pleno dominio), granting you full rights to sell, modify, or inherit the property. Leasehold arrangements (mostly commercial) are rare but exist, so always confirm you are buying the freehold.

2. Community of Owners

Apartment blocks and complexes operate under a Comunidad de Propietarios, responsible for building upkeep, shared amenities, and setting annual community charges at regular meetings. Owners have voting rights proportional to their property size.

3. Owner’s Obligations

• Pay all property taxes, community fees, and local levies on time
• Maintain your property to prescribed community and municipal standards
• Comply with local planning and building codes for renovations/extensions
• Properly license and declare rental income

4. Inheritance Rights

Foreign owners can usually bequeath property under their home country’s law or Spanish law, but Spanish forced heirship rules (which prioritize spouse/children) can sometimes apply. Seek specialized cross-border legal advice.

Being a responsible owner ensures a smooth relationship with neighbors, authorities, and local service providers.

Buy-to-Let and Short-Term Rental Laws in 2025

The islands’ tourism economy makes short-term lets attractive, but regulation is increasingly strict to balance local interests, especially in popular tourist areas.

1. Obtaining a Short-Term Letting License

Local governments now require a Vivienda Vacacional (VV) license for any property marketed for short-term tourist use (Airbnb, Booking.com, etc.):

• Application process is island-specific; most require proof of compliance with safety, accessibility, and zoning standards.
• Not all properties are eligible: some zones or complexes are “touristic” (allowing rentals) while others are “residential” (prohibiting or limiting lets).
• Failure to comply can result in substantial fines.

2. Taxation of Rental Income

Non-resident EU/EEA landlords pay 19% tax on net rental income; other non-residents pay 24% on gross rental income. Full account-keeping and registration of all income is required.

3. Changing Landscape for Holiday Lets

• In 2025, both Tenerife and Gran Canaria are considering (and in some areas implementing) further tightening of registration, with caps on new licenses in some densely touristic zones.
• Growing pressure from local residents may lead to further restrictions on holiday lets; always check the latest local requirements before purchasing with buy-to-let in mind.
• Long-term rentals (over 3–6 months) are less restricted and remain in high demand, especially in city and residential areas.

4. Example: Short-Term Letting Process (Tenerife 2025)

1. Check property’s zone: is letting permitted?
2. Ensure all safety equipment, signage, and insurance is up to code.
3. Apply for VV license at Cabildo (island council); submit plans, proof of ownership, insurance.
4. Once approved, register rental activity for tax and regulatory purposes.

Before investing based on rental returns, ensure compliance is possible (and sustainable) in your chosen area.

Common Pitfalls and How to Avoid Them

While buying property in the Canary Islands is generally secure, several common traps can cost unsuspecting buyers dearly. Protect yourself by:

• Never signing or paying significant sums before thorough due diligence. Confirm that the seller is the legal owner, all local taxes are paid, and property matches registry records.
• Insist on independent legal representation. Do not rely solely on the seller’s or agent’s lawyer.
• Check the zone and license status if you plan to rent short-term. If the property isn’t legally rentable or it’s in a zone closed to new holiday lets, your investment return could be limited.
• Check for outstanding charges or debts. Community fees and property taxes “run with the property,” meaning the new owner is liable for unpaid bills.
• Budget sufficiently for all purchase costs, taxes, and fees. Some buyers underestimate the total by as much as 20%.
• Be realistic about ongoing costs: Maintenance, insurance, and local taxes can add up, especially in larger villas or rural homes.
• Understand language and culture. While many islanders speak English or German, knowledge of Spanish is essential for legal and administrative processes.
• Don’t skip a structural survey. Especially for older homes or rural fincas, always commission a survey to check for hidden defects or structural issues.

Diligence, patience, and expert advice are your best protections—and will help ensure a smooth Canarian property purchase.

Making an Offer and Closing the Deal

Once you’ve identified your target property and secured finance, negotiating and closing follow these steps:

1. Making an Offer

• Agents usually expect written offers; negotiation on price and inclusions is standard.
• Offers above 5–8% below listed price may be considered “low-ball” unless property is overpriced or struggling to sell.
• Agree on items or furniture to be included (“con/sin muebles”).
• Once accepted, a formal contract is prepared for signature.

2. Reservation and Arras Contracts

• Reservation deposit paid, taking property off the market.
• Arras contract sets out price, completion date, payment schedule, and significant terms.
• Failure to complete: buyer risks losing deposit; seller risks paying back double the deposit.

3. Due Diligence Period

• Lawyer checks the property registry, confirms absence of encumbrances, and ensures legal compliance.
• Secure mortgage final approval if using finance.

4. Completion at Notary

• All parties (or their representatives) attend.
• Final payment is transferred, deed is signed and notarized, and keys exchanged.
• Buyer’s lawyer registers new ownership with Land Registry.

5. Post-Sale Tasks

• Pay transfer or VAT, notary, and registry fees within statutory deadlines.
• Switch over utilities and community fees to your name.
• Inform local authorities for tax records and garbage collection.
• Consider professional property management if buying as a rental.

The entire process takes 4–12 weeks, but can be faster if the property is vacant and funded with cash.

Life as a Property Owner in the Canary Islands

You’ve found your Canarian home—what does daily life as an owner look like in 2025? Here’s what to expect:

1. Integration and Community

Islanders are friendly and international residents numerous. Participate in local fiestas, markets, hiking clubs, and language exchanges to build lasting connections. Many towns have English, German, and Scandinavian associations.

2. Maintenance and Services

• Hire reputable local tradespeople—ask neighbors or your agent for recommendations.
• Community properties are cleaned and maintained by the Comunidad, individual homes require your oversight.
• Consider property management for periodic checks during absences.

3. Language and Daily Administration

While tourism zones have English/German service, dealings with utilities, authorities, or healthcare may require Spanish (or a translator).

4. Healthcare and Residency

Non-residents can access private medical services and urgent public care; full public healthcare access is available for Spanish and EU/EEA residents. Many buyers eventually register residency (empadronamiento) for tax and healthcare benefits.

5. Travel and Connectivity

• Each island has a modern airport, with regular flights to mainland Spain and Europe.
• Inter-island ferries and flights provide easy links for exploring the archipelago.

6. Security and Emergency Services

The Canary Islands have a low crime rate. Local police, Guardia Civil, and medical services are well-equipped for expatriate and tourist needs.

7. Shopping, Dining, and Leisure

• Cuisine is a highlight: taste local specialties like papas arrugadas, mojo, and fresh seafood.
• Modern supermarkets and local producers offer excellent shopping options.
• Outdoor sports abound: surfing, hiking, golfing, and sailing are available year-round.

8. Cultural Events and Festivities

Carnivals, religious processions, and music festivals take place throughout the year, providing endless opportunities for cultural engagement.

Owning property in the Canary Islands means both privilege and responsibility—enjoy your home while respecting local customs and environment.

Frequently Asked Questions

Q: Can non-EU citizens buy property in the Canary Islands?

A: Yes—Spain places no restrictions on buyers by nationality. However, non-EU citizens may face additional paperwork for long-term residency and may be ineligible for certain mortgage products. Some choose to apply for Spain’s Golden Visa (see below).

Q: What is the “Golden Visa”?

A: Under Spain’s Golden Visa scheme, non-EU investors acquiring property worth €500,000 or more (per person) can obtain a residence permit for themselves and dependents. This provides freedom to reside, work, and study within Spain/the EU periodically. As of 2025, the scheme remains active for Canary Islands property purchases.

Q: Can I buy property remotely without visiting the islands?

A: Yes, as long as you have a Power of Attorney in place, but physical viewing is highly recommended to avoid disappointment or missing essential details. Your lawyer can sign most documents on your behalf if necessary.

Q: What are the average annual running costs?

A: For a two-bedroom apartment: IBI €250–400/year; community fees €600–1,800/year; utilities €600–1,000/year. Larger villas or properties with pools/gardens may incur €3,000–5,000+ per year in total.

Q: How easy is it to sell property in the Canary Islands?

A: There is a liquid resale market, especially for homes in popular tourist or expat zones. However, rural or niche properties may take longer to sell.

Q: Are there restrictions on foreign currency transfers?

A: Spain allows the free movement of capital for property purchases, but larger transfers (€10,000+) must be declared for anti-money laundering purposes. Work with experienced banks/brokers for favorable exchange rates.

Q: Will my title be secure?

A: Yes—provided the title is registered correctly by the notary and your lawyer has confirmed its legal status, Spanish property law protects overseas buyers fully.

Conclusion

Buying property in the Canary Islands in 2025 promises a rewarding lifestyle and strong investment opportunities. As with any purchase abroad, success depends on diligent planning, working with trusted professionals, and understanding your rights and obligations under Spanish and Canarian law.

Whether you dream of a beachfront apartment, a rural finca, or a modern villa with sea views, the keys to happiness and security are careful research, expert guidance, and a willingness to embrace local customs. With the insights in this comprehensive guide, you are well-equipped to navigate the Canarian real estate market and make your property dream a reality.

For tailored advice specific to your situation, always consult with a Canary Islands property lawyer, a tax advisor, and a local real estate professional before signing any documents or sending funds.