House in Canary Islands: how to make a consistent income

by André Piti On 01/28/2022

Ever heard of that guy who owns a house in Canary Islands and gets an amazing monthly income?

Well, he’s probably not joking.

Tenerife, Lanzarote, Fuerteventura, and the Capital Gran Canaria: the Canary Islands are known for being a high rated touristic destination. Yet, buying a house is definitely affordable, if not cheap.

Because of this, renting out here is a synonym of high profits, and that’s why a lot of investors would prefer these heavenly islands to the Spanish mainland.

If you want to have a look at some properties in Canary Islands, check our dedicated portal.

Owning a house in Canary Islands

Holiday rentals are very common and pay off a lot: consider that in 2020, a year affected by Covid pandemic regulations, Canary Islands still received around 3.79 millions visitors.

Any foreigners can buy a house in Canary Islands without having to apply for residency. However, you will need a license from the townhall to rent it.

To purchase a property, you must have an account in a Spanish bank and a NIE (Numero de Identidad de Extranjeros), which is basically the tax code for a foreigner.

[Note: NIE is not a Visa and will not grant the right to reside in Spain, islands included]

Real Estate in Canary Islands: Hints & Tips on taxes

If you’re excited and ready to go for a safe investment like this one, keep in mind some of the basics:

Landlords usually ask for a month deposit in the Islands
You can advertise your property by yourself or rely on an agency (this is highly recommended if you’re not a citizen, as agencies usually offer maintenance services for when you’re not there).
You can charge far more for shorter stays, especially for other non-residents.
One good target audience where you should direct your advertising is the snowbirds group. We are talking about retired people from Northern Europe who like to spend a lot of time in the Canary Islands.

Main tax regulations you should be aware of:

Purchasing Real Estate in Canary Islands will be subject to IGIC (equivalent of VAT) for a 6.5% of the value.
The income tax for non-residents is 24%.
The municipal property tax is 0.7% of the cadastral value.

If you want to check available properties in the Canary Islands and enjoy a solid return on investment, click here.

André Pitì