Canary Islands property investment delivers some of the highest gross rental yields in Spain — 7–10% in prime tourist zones, supported by a 365-day tourism cycle that doesn't slow in winter. Holiday-rental occupancy reaches 90%+ in peak winter months and averages roughly 65–75% across the year. Tenerife is the largest market, with Costa Adeje, Los Cristianos, and the Golf del Sur corridor driving foreign-buyer demand; Gran Canaria, Lanzarote, and Fuerteventura each have distinct niches. The Canaries are part of the EU but operate under the IGIC tax regime (7%) instead of mainland IVA, with a separate ZEC corporate-tax framework some investors use. Note: the new Ley 6/2025 (in force December 2025) caps tourist-use housing at 10% of dwellings per zone — we screen every property for tourist-licence eligibility before you buy.
Why Buy Here
- Only Spanish region with 365-day tourist season
- IGIC tax (Canary Island VAT equivalent) at 7% vs 10% mainland ITP
- ZEC special economic zone — reduced 4% corporate tax for qualifying businesses
- Direct flights from all major European cities
- Lower cost of living than mainland Spain
- Growing remote worker community
Lifestyle
Tenerife's south (Los Cristianos, Playa de las Américas) is resort-heavy and rental-focused. The north (Puerto de la Cruz, La Orotava) is greener, more cultural. Lanzarote's volcanic black-sand landscapes attract a design-conscious buyer.
Investment Outlook
Among the highest gross rental yields in Spain: 7–10% in high-demand zones. Holiday-rental occupancy reaches 90%+ in peak winter months, averaging roughly 65–75% across the year. Capital appreciation: 9–13% in Tenerife South (2022–2024).
Frequently Asked Questions
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IGIC (the Canarian equivalent of IVA) is 7% vs. 10% ITP on mainland resale properties. The Canaries also offer the ZEC special economic zone, with a reduced 4% corporate tax for qualifying businesses registered there.
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Tourist licences (VV) are available for qualifying properties, but the new Ley 6/2025 (in force December 2025) caps tourist-use housing at 10% of dwellings per zone (20% on the smaller western islands) and bars new builds from tourist use for their first ten years. We screen every property for licence eligibility before you buy and manage the application as part of our post-purchase services.
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