Taxes on property canary islands

1. Property Sales Tax Rates
in the Canary Islands
(Source AEAT)

2. This presentation has been updated and is valid for 2015.*
*myAdvocate Europe Ltd does not accept responsibility for losses of any type consequent upon reliance
on the information contained in this presentation. Please consult a lawyer before acting.
Property Sales Tax Payable in Spain
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3. Property Sales Tax Payable in Spain
All new properties in Spain are subject to IVA (equivalent to
VAT in the UK & Ireland) or IGIC, as it is known in the Canary
Islands.
Secondhand properties are subject to ITP (Impuesto de
Transmisiones Patrimoniales).
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4. Property Sales Tax Payable in Spain
● Both IGIC and ITP is set by the Canary Islands regional
government.
● The rate of IGIC tax payable on new build properties is 7%.
● The rate of ITP tax payable on second-hand properties is
6.5% 4

5. A tax known as ‘Actos Jurídicos Documentados’
(Documented Legal Operations Tax) is also payable when
buying a property.
AJD Tax
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6. In the Canary Islands this amounts to 0.75%, payable on the
price of the property as indicated on the property deeds plus
the amount of any mortgage to finance the purchase.
The rate increases to 1% on new build properties
AJD Tax
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7. Property Sales Tax Payable in Spain
Returning to the ITP tax, payable on second-hand properties,
there are a number of exceptions to the standard rate of 6.5%
tax:
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8. Repossessed Properties
If the property was repossessed, and then purchased at public
auction, the rate of ITP tax payable is 7%
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9. Where the property being purchased is subsidised by the
government then it is subject to a tax rate of 4% if the
property is going to constitute the main home of the
purchaser.
Protected or Social Housing
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10. The purchase of a property is subject to a tax rate of 4% if
the property is going to constitute the main home of the
purchaser if:
● the purchaser is under 35 years of age
First Home Purchase
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11. ● the total taxable income of the purchasers does not
exceed €25,000
● it is the first home purchase and the purchaser has never
owned any property before
First Home Purchase
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12. Legislative Decree 1/2009 further provides that a property
acquired by a legally defined 'large' family for the purpose of
being their main home is subject to a special tax rate of 4%
where:
● the property is purchased within 2 years of the family
achieving the status of being 'large'
Initiatives for Large Families
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13. ● the property formerly used as a family home must be sold
within the same period of time
● the total taxable income of the family unit may not exceed
€30,000 with the limit increasing €12,000 for each child in
excess of the number required for 'large' family
qualification
Initiatives for Large Families
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14. The acquisition of a property as a main home by a person
suffering a disability of > 65% or by any person who may avail
of income tax reductions to care for that person, shall attract a
rate of tax of 4%, where:
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Purchase of Housing by the Disabled

15. - the total taxable income of the purchasers does not exceed
€40,000 with an additional €6,000 for each person for whom
the care allowance deduction can be applied
- that any property that previously was the main family home
be sold within two years of the purchase of the new home
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Purchase of Housing by the Disabled

16. ITP tax of 1% of the value of the property is payable on formal
options to purchase
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Tax on Options to Purchase Property

17. For more information or assistance with legal or tax
matters from our network of local English-speaking
property lawyers in the Canary Islands, go to:
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Property Lawyers in the Canary Islands