Is Your Dream of Owning a Home in the Canary Islands About to Come True?
Before you take the next step, it’s important to look not only at the purchase price but also at the additional costs involved when buying property in Spain. These extra expenses can add up to several percent of the total amount and vary depending on the type of purchase.
This overview shows you all relevant costs so you can be fully prepared.
1. Taxes When Buying a Property
a) Transfer Tax (Impuesto sobre Transmisiones Patrimoniales – ITP)
When purchasing a resale property, the Transfer Tax (ITP) applies. In the Canary Islands, it amounts to 6.5% of the purchase price. The buyer must file and pay this tax at the tax office within 30 days after the notarial signing.
b) IGIC (VAT) and Stamp Duty (AJD)
When buying a newly built property directly from the developer, different taxes apply:
– IGIC (Canary Islands VAT): 7% of the purchase price
– Stamp Duty (AJD): 1%
Both taxes are paid by the buyer and are generally due at the notarial signing.
2. Notary and Land Registry Costs
The notarial deed of sale and the registration in the Land Registry are legally required. The cost varies depending on the purchase price.
- Notary fees: approx. €600 – €1,500 (paid by the buyer at the notary appointment)
- Land Registry fees: approx. €400 – €1,000 (paid by the buyer after the signing)
3. Lawyer’s Fees
A lawyer verifies the legal status of the property, such as any debts, charges, or risks. Costs typically amount to around 1% of the purchase price. An upfront deposit is often required, with the remaining amount paid upon completion.
4. Administrative Fees (Gestoría)
For administrative tasks such as filing taxes or managing the registration process, additional fees apply. These typically range from €300 to €800, depending on the service provider. Payment is usually made after the registration is completed.
5. Agent Commission
In Spain, the seller usually pays the agent’s commission.
However, if a buyer hires a Property Consultant / Personal Shopper, costs may range from 1% to 3% of the purchase price. Payment is typically due upon signing the agreement or after completion of the purchase.
6. Other Possible Costs
Mortgage-related expenses:
If financing is required, additional costs such as valuation fees (€250 – €600) and bank-related charges apply. These occur during the mortgage application process.
Insurance:
A home insurance policy is often mandatory. Costs vary depending on the provider, and the first premium is typically due at policy activation.
Utility connections:
If water, electricity, or gas need to be connected, additional fees will be charged. These are paid when signing the service contracts.
Who Pays What – and When?
| Cost Type | Amount | Who Pays | When Due |
|---|---|---|---|
| Transfer Tax (ITP) | 6.5% | Buyer | Within 30 days after notarial signing |
| IGIC (for new builds) | 7% | Buyer | At notarial signing |
| Stamp Duty (AJD) | 1% | Buyer | At notarial signing |
| Notary fees | €600 – €1,500 | Buyer | At notarial signing |
| Land Registry fees | €400 – €1,000 | Buyer | After registration |
| Legal fees | ~1% of purchase price | Buyer | Retainer upfront, remainder on completion |
| Administrative fees (Gestoría) | €300 – €800 | Buyer | After registration |
| Agent commission | Usually seller | Buyer (if using a Personal Shopper) | At contract signing or completion |
| Mortgage fees | varies | Buyer | Upon loan application |
| Insurance | varies | Buyer | Upon starting the policy |
| Utility connections | varies | Buyer | Upon signing service contracts |
Summary of Total Costs
Buyers should plan for additional purchase costs of around 8% to 10% of the property price.
A detailed financial plan can help avoid surprises and ensure a smooth purchasing process.
Conclusion
Buying a property in the Canary Islands comes with a series of additional costs that are often underestimated. Careful planning and professional guidance can help you navigate the process safely and prevent unnecessary delays or expenses.
