A Practical Guide for Irish Buyers Investing in Canary Islands Property
Introduction
The Canary Islands have become one of Europe’s most attractive overseas property destinations. With year‑round sunshine, a low‑cost lifestyle and a clear legal framework, the archipelago appeals to Irish retirees, remote‑working families and savvy investors alike. This guide walks you through the essential information you need before signing a deed, from market snapshots and financing options to residency routes and common pitfalls. By the end you’ll have a solid roadmap for turning a dream of a Canarian home into a reality.
1. Overview of the Canary Islands Property Market in 2025
| Island | Main Hotspots | Approx. price (€/m²) |
|---|---|---|
| Tenerife (South – Costa Adeje) | Luxury villas, beachfront apartments | €3,800 – €5,300 |
| Gran Canaria (Las Palmas & Maspalomas) | City apartments, resort condos | €2,600 – €3,700 |
| Lanzarote (Puerto del Carmen) | Modern apartments, holiday villas | €2,400 – €3,600 |
| Fuerteventura (Corralejo) | New builds, family homes | €2,000 – €2,900 |
| La Palma (Santa Cruz) | Rural fincas, renovated townhouses | €1,400 – €2,100 |
Source: Estatefy market analysis, 2025.
The market remains resilient despite global economic swings, thanks to strong tourism, a limited supply of buildable land and continued interest from European buyers. Prices have risen modestly in the most sought‑after coastal zones, while inland or rural properties still offer good value for renovation projects.
2. Why Irish Buyers Choose the Canary Islands
- Climate: Over 300 sunny days a year and mild winters make the islands an ideal year‑round retreat.
- Healthcare: As part of Spain, the islands benefit from the EU’s public health system – a major plus for retirees.
- Tax Advantages: The regional sales tax (IGIC) is lower than mainland Spain’s VAT, and the islands enjoy a special tax regime for residents.
- Strong Rental Yields: Tourist demand translates into attractive short‑term let returns, especially in Tenerife and Gran Canaria.
- Ease of Ownership: Spanish law allows non‑EU nationals to purchase freehold property with no special restrictions.
- Golden Visa: Investing €500,000 in property qualifies for Spain’s residence‑by‑investment scheme, opening the door to the Schengen Area.
3. Types of Property You’ll Find
| Property type | Typical buyers | Key features |
|---|---|---|
| Beachfront Villa | High‑net‑worth investors, holiday‑home seekers | Private pool, sea views, often new build, higher purchase tax (IGIC 7%). |
| City Apartment | Remote workers, retirees | Proximity to services, community facilities, good for long‑term rentals. |
| Finca (Rural Farmhouse) | Lifestyle buyers, renovation enthusiasts | Land for agriculture or gardens, traditional Canarian architecture, may need extensive upgrades. |
| Townhouse/Duplex | Families, long‑term residents | Small garden, often within gated communities, lower maintenance than villas. |
| Commercial Unit | Entrepreneurs, investors | Shops, cafés, small hotels – subject to stricter licensing and tax rules. |
4. Choosing the Right Island – A Quick Location Guide
Tenerife
The largest island offers a blend of bustling city life (Santa Cruz, La Laguna) and luxury resort zones (Costa Adeje, Los Cristianos). Ideal for those who want both nightlife and easy beach access.
Gran Canaria
Known for its diverse micro‑climates, the capital Las Palmas is perfect for an urban lifestyle, while Maspalomas and Playa del Inglés cater to sun‑seekers and investors targeting holiday rentals.
Lanzarote
A UNESCO Biosphere Reserve, Lanzarote stands out for its volcanic scenery and low‑rise architecture. Popular among families and those who appreciate sustainable design.
Fuerteventura
Famed for wind‑surfing and endless dunes, the island offers more affordable beachfront apartments, especially around Corralejo and Caleta de Fuste.
La Palma, La Gomera, El Hierro
These quieter islands attract buyers looking for tranquillity, nature walks and lower price points. Expect fewer short‑term rental opportunities but a strong sense of community.
5. Legal Steps – Buying Property as a Foreigner
- Obtain an NIE (Número de Identidad de Extranjero). This tax identification number is mandatory for any contract, bank transaction or tax filing. Apply at a Spanish consulate or through a local lawyer’s power of attorney.
- Open a Spanish bank account. Required for deposits, mortgage payments and tax transfers.
- Hire a local solicitor. Choose a lawyer who specialises in Spanish real estate to verify title, check for debts, and review the Contrato de Arras (pre‑sale agreement).
- Conduct due‑diligence. Confirm the property is registered in the Registro de la Propiedad, that there are no outstanding community fees, and that zoning permits the intended use (especially important for holiday lets).
- Sign the reservation contract (usually a small €3‑10 k deposit) followed by the Contrato de Arras (typically 10 % of the price).
- Complete the transaction at a notary. The Escritura Pública de Compraventa is signed, the remaining balance is paid and the deed is entered into the Land Registry.
- Pay taxes and register the property. Transfer tax (IGIC) or VAT, notary fees, registration fees and stamp duty are due within 30 days of signing.
6. Financing – Mortgages for Irish Buyers
| Feature | Typical terms (2025) |
|---|---|
| Loan‑to‑Value (LTV) | Up to 80 % for Spanish tax residents, 60‑70 % for non‑residents |
| Maximum term | 30 years (often limited to the borrower’s age of 75) |
| Interest rates | Fixed 3.0‑4.2 % or variable Euribor + margin (≈1.5‑2 %) |
| Required documentation | NIE, proof of income (payslips or tax returns), bank statements, property appraisal, Contrato de Arras |
Spanish banks such as Banco Santander, BBVA and CaixaBank regularly grant mortgages to non‑resident Irish citizens, though they may request a higher down‑payment and a guarantor. Cash purchases remain popular because they speed up the process and provide stronger negotiating power.
7. Taxation – What You’ll Pay Now and Ongoing
7.1 Purchase‑related taxes
| Transaction type | Tax | Rate |
|---|---|---|
| New build | IGIC (Canary VAT) | 7 % |
| Second‑hand | Transfer Tax (IGIC) | 6.5 % |
| Stamp Duty (Actos Jurídicos Documentados) | 1 % on the deed value (applies to both new and resale) |
7.2 Ongoing taxes and fees
- IBI (Impuesto sobre Bienes Inmuebles) – annual municipal property tax, typically 0.4‑1.1 % of the cadastral value.
- Community fees – for apartments or gated estates, €50‑€300 per month depending on amenities.
- Non‑resident income tax – 19 % on gross rental income for EU/EEA owners; 24 % for other non‑residents.
- Wealth tax – applies only if worldwide assets exceed €700 000 (plus a €300 000 primary‑residence allowance).
- Capital gains tax on resale – 19 % for EU/EEA sellers (subject to exemptions for primary residence).
7.3 Golden Visa tax benefits
Investors who obtain the Golden Visa by purchasing property worth €500 000 or more can later apply for Spanish tax residency, which may open the door to favourable double‑taxation treaties between Spain and Ireland.
8. Renting Your Canarian Property – Short‑Term Let Licence
Since 2021 the islands require a Vivienda Vacacional (VV) licence for any property marketed on platforms such as Airbnb or Booking.com. The process varies by island:
- Submit proof of compliance with safety, fire‑extinguishing equipment and accessibility standards.
- Obtain clearance that the property’s zoning permits tourist rentals (some residential complexes are “non‑tourist” and cannot be licensed).
- Pay a modest municipal fee (≈ €200‑€500) and renew the licence every two years.
Failure to secure the licence can result in fines of up to €30 000 per breach, so verify eligibility before buying with a rental‑income strategy.
9. Common Pitfalls and How to Avoid Them
| Pitfall | Preventive action |
|---|---|
| Skipping a professional survey – hidden structural defects in older fincas. | Commission a qualified architect or building surveyor before signing the Contrato de Arras. |
| Assuming any property can be let short‑term – many zones are residential‑only. | Check the property’s uso (use) classification and confirm the VV licence can be obtained. |
| Under‑budgeting for taxes and fees – total purchase costs can reach 10 % of price. | Build a 12‑month cash reserve covering transfer tax, notary, registration, and first‑year community fees. |
| Relying on the seller’s lawyer – conflict of interest. | Appoint an independent solicitor who represents you exclusively. |
| Ignoring currency‑exchange costs – large euro transfers can attract poor rates. | Use a specialist FX broker or a bank offering competitive spot rates and forward contracts. |
10. Making an Offer and Closing the Deal – A Step‑by‑Step Checklist
- View the property in person (or via a trusted agent’s video tour).
- Agree on price and inclusions (furniture, appliances, parking).
- Sign the Contrato de Arras and pay the deposit (usually 10 %).
- Secure financing (mortgage approval) or confirm cash availability.
- Complete due‑diligence – title search, debt check, zoning verification.
- Schedule the notary appointment – typically 4‑8 weeks after the Arras.
- Pay the remaining balance, sign the public deed, and receive the keys.
- Register the deed at the Land Registry and pay the applicable taxes within 30 days.
- Register with the local town hall (empadronamiento) – required for utilities and health‑care access.
- Set up utilities, internet, and insurance; consider a property‑management service if you’ll be abroad for extended periods.
The whole process usually takes 4‑12 weeks, depending on mortgage processing times and the availability of the notary.
11. Life as a Canarian Property Owner
- Community life: Most islands have active expatriate groups (Irish, British, German) that organise socials, language exchanges and cultural events.
- Healthcare: Residents enjoy the public Spanish health system (SNS) – free or low‑cost GP visits, specialist care, and hospital treatment.
- Cost of living: Groceries and dining are generally cheaper than in Dublin; a family of four can live comfortably on €1 800‑€2 200 per month, excluding mortgage repayments.
- Travel: Two‑hour flights connect the islands to major European hubs, while inter‑island ferries make weekend trips easy.
- Safety: Crime rates are low; the islands have a strong police presence and reliable emergency services.
12. Frequently Asked Questions
Q: Can I buy a property without ever visiting the islands?
A: Yes, via a Power of Attorney, but a personal visit is strongly advised to avoid surprises.
Q: Do I need a Spanish bank account to pay the deposit?
A: A local account is required for the final transfer and any mortgage payments; some sellers accept escrow services that can hold funds temporarily.
Q: What is the minimum investment for a Golden Visa?
A: €500 000 in a single property (or €500 000 across multiple properties) qualifies, provided the assets are fully paid‑up.
Q: How long does it take to obtain a residency permit after buying?
A: The Golden Visa is issued within 2‑3 months after the purchase is registered; standard residency for EU citizens is immediate upon registration and empadronamiento.
Q: Are there any restrictions on buying coastal land?
A: The Ley de Costas limits construction within 100 m of the shoreline and requires special permits for any development.
Conclusion
The Canary Islands combine a sun‑kissed lifestyle with a transparent, buyer‑friendly legal system, making them an excellent choice for Irish investors and expats. By understanding the market dynamics, navigating the legal steps, budgeting for taxes and fees, and respecting local regulations, you can secure a property that serves as a holiday haven, a rental income generator, or a long‑term home base.
Take the next step: engage a reputable Canarian solicitor, obtain your NIE, and start exploring listings that match your budget and lifestyle. With the right preparation, your Canarian property dream can become a solid, rewarding investment for years to come.