Buying Property in Lanzarote: All Taxes and Costs Explained (2026)

The Canary Islands Advantage: Lower Taxes Than Mainland Spain

Before diving into the numbers, it is worth understanding why Lanzarote stands out fiscally compared to buying in Madrid, the Costa del Sol, or the Costa Blanca.

The Canary Islands apply a 6.5% ITP (transfer tax on resale properties) and 7% IGIC for new builds — the lowest indirect taxes in Spain. Compare that to Valencia at 10% ITP, or Catalonia where the rates are equally high. On a €300,000 property, that difference alone is €10,500 less in purchase tax versus many mainland regions.

This fiscal advantage is part of the Canary Islands' Special Economic Regime (REF), the same framework that provides IGIC instead of mainland VAT and a range of other incentives for residents and investors.

Part 1: Taxes When Buying — Resale (Second-Hand) Property

The majority of properties sold in Lanzarote are resale — existing homes changing hands between private individuals or investors. When you buy resale, the main tax is:

ITP — Impuesto sobre Transmisiones Patrimoniales (Property Transfer Tax)

If you are buying a second-hand home in Lanzarote, the ITP rate is 6.5% of the purchase value.

This is applied to the higher of the declared purchase price or the official cadastral reference value (valor de referencia) set by the Dirección General del Catastro. Since 2022, the Spanish authorities have tightened this rule — if your agreed purchase price is lower than the reference value, tax will be calculated on the reference value, not what you paid. Attempting to under-declare the purchase price now carries a significant risk of a tax inspection.

ITP must be paid within 30 days of signing the title deed (escritura pública).

Example calculation — Resale property

Part 2: Taxes When Buying — New-Build Property

If you are buying a brand-new property directly from a developer, ITP does not apply. Instead you pay:

IGIC — Impuesto General Indirecto Canario

If you are buying a new property in Lanzarote, you will pay 7% IGIC plus 1% of the purchase price as stamp duty (AJD).

IGIC replaces mainland Spain's IVA (VAT) in the Canary Islands. The standard rate for residential new-builds is 7% — significantly lower than the 10% IVA applied on the Spanish mainland.

AJD — Actos Jurídicos Documentados (Stamp Duty)

On new builds, stamp duty (AJD) of 1% applies in addition to IGIC. This is charged on the notarised purchase deed.

Example calculation — New-build property

Note on garage spaces and storage units: If a garage or trastero (storage room) is sold with separate title deeds from the main property, it may be subject to a different IGIC rate. Always clarify this with the developer before signing.

Part 3: Professional Fees and Other Costs

Beyond the tax, several professional fees and administrative costs apply to every property purchase in Lanzarote.

Notary Fees

In Spain, the property purchase must be formalised before a Notario (Notary Public). Notary fees are regulated by the state — all notaries charge the same rates, based on the property price:

• Approximately 0.2%–0.5% of the purchase price
• For a €200,000 property: roughly €700–€900
• For a €400,000 property: roughly €1,000–€1,200

Land Registry Fees (Registro de la Propiedad)

After signing at the notary, the purchase deed must be registered at the Registro de la Propiedad (Land Registry). Fees are also regulated and typically amount to:

• Approximately 0.1%–0.25% of the purchase price
• Usually €400–€800 for most purchases

Legal / Solicitor Fees

While not legally required in Spain, hiring an independent English-speaking solicitor or lawyer (abogado) is strongly recommended for all foreign buyers. They will:

• Conduct due diligence on the property (check for debts, charges, planning issues)
• Verify the seller has clear title
• Review all contracts (arras/reservation contract and final escritura)
• Liaise with the notary and Land Registry
• Handle the tax filings on your behalf post-completion

Legal fees are typically 1%–1.5% of the purchase price, with a minimum of around €1,500 for smaller purchases.

Gestoría Fees

A gestoría is an administrative firm that handles paperwork filings — particularly the ITP or IGIC declaration to the regional tax authority and the Land Registry registration. If your lawyer does not cover this, a gestoría will charge approximately €300–€600. Many law firms include this in their service.

Mortgage Valuation (if applicable)

If you are financing your purchase with a Spanish mortgage, the bank will require an independent valuation (tasación) of the property before approving the loan. In 2026, valuation costs typically range from €300–€600, depending on the property size and the institution carrying it out. The valuation is valid for 6 months.

Total Buying Costs: Budget Summary

As a general rule, budget an additional 10%–12% of the purchase price on top of the agreed price to cover all taxes and fees. Here are two worked examples for Lanzarote:

Example A: Resale apartment, €250,000

Example B: New-build villa, €450,000

Part 4: Your NIE — The First Step Before Anything Else

Before you can sign any property deed in Lanzarote, every buyer needs a NIE (Número de Identidad de Extranjero). The notary will not proceed without it.

If you are buying as a couple, each buyer needs their own individual NIE — they are personal and non-transferable.

Allow at least 2–4 weeks to obtain your NIE if applying in person in Spain, or longer through a consulate abroad. For buyers managing the purchase remotely, a power of attorney allows a representative to obtain the NIE (and sign the deed) on your behalf.

See our complete guide: How to Get Your NIE in Lanzarote: Step-by-Step Guide 2026

Part 5: Ongoing Taxes Once You Own Property in Lanzarote

The costs don't end at purchase. As a property owner in Lanzarote, you have annual obligations regardless of whether you rent the property or use it personally.

IBI — Impuesto sobre Bienes Inmuebles (Local Property Tax / Rates)

The IBI is Lanzarote's equivalent of council tax. It is levied annually by the local municipality (Arrecife, Tías, Yaiza, San Bartolomé, Haría, Teguise, depending on your property's location) and is calculated as a percentage of the cadastral value (valor catastral) of the property.

Typical rates in Lanzarote range from 0.4%–0.8% of the cadastral value, which is usually significantly lower than the market value. For most Lanzarote properties, annual IBI bills range from roughly €300–€1,500 depending on size, location and how recently the cadastral value was reviewed.

Basura (Waste Collection Tax)

A separate annual charge for local rubbish collection, typically €100–€300/year.

Non-Resident Income Tax — Even If You Don't Rent

If you are not a Spanish tax resident (i.e. you live outside Spain or spend fewer than 183 days a year here), you still owe Spanish tax on your property even if you never rent it out.

This is called imputed income tax (renta imputada) and is declared via Modelo 210 annually by 31 December of the following year. It is calculated as 1.1% or 2% of the cadastral value, then taxed at:

• 19% for EU/EEA residents
• 24% for non-EU residents (UK post-Brexit, USA, Canada, etc.)

For most Lanzarote properties, this results in a modest but real annual tax bill of €150–€600/year depending on the property's cadastral value and your residency status.

If you do rent the property, different rates apply — see our full guide: Holiday Rental Tax in Lanzarote: The Complete Guide for Property Owners (2026).

Part 6: Taxes When You Sell

When you decide to sell your Lanzarote property in the future, two taxes apply — one to you as seller, one municipal.

Capital Gains Tax (CGT)

As a non-resident seller, you pay 19% capital gains tax on the profit from the sale (sale price minus purchase price, adjusted for documented costs).

At the point of completion, the buyer's solicitor will withhold 3% of the sale price and pay it directly to the AEAT (Spanish Tax Agency) as an advance against your CGT. Your advisor then calculates the exact amount owed:

• If the 3% withholding exceeds your actual CGT liability → you claim a refund
• If it falls short → you pay the balance

Costs that can be deducted to reduce your capital gain include: original purchase price, ITP/IGIC paid at purchase, legal fees, estate agent fees at sale, and documented improvement costs (not maintenance).

Plusvalía Municipal (Local Land Value Tax)

The plusvalía municipal is a municipal tax charged by the local ayuntamiento on the increase in the land value (not the building) since you purchased. It is technically the seller's liability, though it is sometimes negotiated between buyer and seller.

The calculation takes into account your ownership period, the location, and the cadastral land value. For most standard Lanzarote properties held for several years, this amounts to €1,000–€5,000 depending on the municipality and land value.

Energy Certificate: When selling (or renting), Spanish law requires a valid energy efficiency certificate (certificado de eficiencia energética), issued by an accredited inspector. Cost: €100–€500 depending on property size.

Buying in Lanzarote: The Canary Islands vs. Mainland Spain

To put it all in context, here is how Lanzarote's purchase costs compare to popular mainland alternatives:

On a €350,000 resale property, buying in Lanzarote rather than Valencia saves you €12,250 in transfer tax alone.

How Accounting Spain Supports Property Buyers

Buying property in Lanzarote as a foreign national involves fiscal obligations that begin before completion and continue every year you own. We support buyers at every stage:

• NIE application assistance — getting your number in time for completion
• Tax calculation before you commit — so you know the full cost before signing
• ITP/IGIC filing — paid and filed correctly within the 30-day deadline
• Annual Modelo 210 filings — imputed income or rental income declarations
• IBI monitoring — ensuring annual rates are paid on time
• Capital gains calculation and filing — when you sell
• Rental income compliance — if you let your property to tourists

All services in English. 100% remote. No office visit needed.

Frequently Asked Questions

This article is for general informational purposes only and does not constitute personalised tax or legal advice. Tax rules change frequently. Always consult a qualified advisor for your specific situation.