Buying Property in the Canary Islands as an American: Taxes, Rules & What's Different

Are there restrictions on foreign ownership of property in the Canary Islands?

No restriction applies specifically to foreign or American buyers — the requirements are the same as anywhere in Spain (NIE, bank account, legal due diligence). The restriction that does apply, equally to Spanish nationals, is Spain's coastal law (Ley de Costas) — especially relevant on an island territory where a meaningful share of property sits near the shoreline.

Two zones matter. The dominio público marítimo-terrestre itself — the beach, the shoreline, and the sea — cannot be privately owned by anyone. The servidumbre de protección is a strip of otherwise-private land running 100 meters inland from the shoreline (reduced to 20 meters in areas already classified as urban, or with an approved partial development plan, before January 1, 1988). Property inside this strip can be privately owned and bought, but is restricted: no new construction, and no increase in the volume, height, or footprint of existing buildings — only like-for-like repairs and maintenance are permitted.

In the Canary Islands specifically, permits for construction or activity within the servidumbre zone are processed through the regional government (Decreto 171/2006), under the same national rules above.

This does not block a purchase near the coast — most coastal properties across Spain, including the Canary Islands, sit outside this restricted strip or were built under an already-approved plan. It does mean that due diligence on a coastal or near-coastal property should specifically confirm which zone it falls in before you sign — which is exactly what we check as part of the legal due diligence step.

Source: Ley 22/1988 de Costas (as amended by Ley 2/2013), Reglamento General de Costas (Real Decreto 876/2014); Decreto 171/2006 (Canary Islands procedural implementation). Discussed as planning information, not legal advice on a specific property.

What is the REF canario, and does it affect my purchase?

The REF canario (Régimen Económico y Fiscal de Canarias) is the special economic and fiscal framework — recognized in the Spanish Constitution and EU treaties — that governs how the Canary Islands are taxed differently from mainland Spain. IGIC itself (see above) was created under this framework by Ley 20/1991.

For a straightforward home purchase, the REF canario's most direct effect is the IGIC/ITP treatment above. The REF canario also includes business and investment incentives — such as the RIC (Reserva para Inversiones en Canarias, Ley 19/1994, art. 27) and the ZEC (Zona Especial Canaria, Ley 8/2018) — which may be relevant if you are structuring a business, rental operation, or larger investment through the islands rather than a straightforward home purchase. Whether any of these apply to you is assessed case by case, not as a blanket rule.

Source: Ley 20/1991 (IGIC), Decreto Legislativo 1/2009 (ITP/AJD), Ley 19/1994 art. 27 (RIC), Ley 8/2018 (ZEC). Discussed as planning information, not tax advice.