Buying a new home in a paradise like Fuerteventura is an exciting decision. However, for the investment to be successful, it’s essential to have a clear and comprehensive view of the total costs involved. The purchase goes beyond the property price: there are several taxes and expenses associated with it that have their own particularities in the Canary Islands.
At Casilla de Costa, we want to offer total transparency and help you plan your budget with precision. Below, we break down all the expenses and taxes you need to consider when purchasing one of our villas.
I. Direct Taxes: The Tax System in the Canary Islands
The most significant tax when buying a new home is the Canary Islands General Indirect Tax (IGIC), which replaces the Value Added Tax (VAT) applied on the mainland.
Canary Islands General Indirect Tax (IGIC)
In mainland Spain, the VAT for new homes is 10%. In the Canary Islands, the IGIC is applied, and the tax rate for new home purchases is 7%.
- Application: It is applied to the notarized sale price of the property.
- Importance: This 3.5% difference compared to the mainland makes buying in Fuerteventura more attractive from a tax perspective.
Documented Legal Acts (AJD)
This tax applies to notarial and registry documents. In the Canary Islands, the AJD is paid together with the IGIC.
- Tax Rate: The general rate in the Canary Islands is 1% of the sale price of the property.
- Total Taxes: Adding the IGIC and the AJD, the buyer should expect a total of 8% of the property price in mandatory taxes (7% IGIC + 1.5% AJD in most cases, although the rate can vary slightly depending on the taxable base and municipality).
⭐ Key Fact from Casilla de Costa: In most new home purchases in the Canary Islands, the total percentage of direct taxes (IGIC + AJD) is around 8%.
II. Formalization Costs: Notary, Registration, and Administration
In addition to taxes, there are several fixed costs required to formalize the transaction and register the property in your name.
Notary Fees
These are the fees charged by the notary for the signing of the sales deed (the original). These fees are regulated by law and vary depending on the property price.
- Estimation: They usually range between 0.2% and 0.5% of the notarized price. The higher the price, the lower the percentage applied.
Property Registration Costs
These are the costs associated with registering the property in your name at the Property Registry. Like notary fees, these are regulated by law.
- Estimation: Similar to notary fees, they usually range from 0.1% to 0.25% of the property price.
Administration Fees
If you choose to hire an administration service (which is most common) to handle tax settlements, registry registration, and mortgage management (if applicable), you will need to pay their fees.
- Estimation: This cost varies depending on the company, but it typically ranges from €300 to €600. We highly recommend using an administration service specialized in transactions in the Canary Islands to ensure proper IGIC settlement.
III. Costs Related to Financing (Mortgage)
If the purchase is made with a mortgage, there are additional costs to consider.
Property Valuation
The bank will require an official property valuation to determine the maximum amount they are willing to finance.
- Cost: This varies depending on the valuer and the characteristics of the property, but it generally ranges between €300 and €500.
Mortgage Fees
Since the 2019 Mortgage Credit Law, the majority of the mortgage-related formalization costs are covered by the bank:
- The bank pays: Notary, Registration, Administration, and AJD fees related to the mortgage loan.
- The buyer pays: Only the property valuation and the copies of the deed they request.
Important: This law removes the burden of mortgage loan fees from the buyer. However, the notary, registration, and AJD costs related to the actual property sale (the transfer of the property, not the loan) remain the responsibility of the buyer.
IV. Breakdown and Total Estimated Budget
For proper financial planning, the buyer should expect that total costs for buying a new home in Fuerteventura will range between 9% and 11% of the purchase price.
| Concept | Tax Rate / Estimation | Who Pays? |
| Home Purchase Tax (IGIC) | 7% | Buyer |
| Home Purchase Tax (AJD) | 1% to 1.5% | Buyer |
| Notary Fees (Deed of Sale) | 0.2% to 0.5% | Buyer |
| Property Registration Fees | 0.1% to 0.25% | Buyer |
| Administration Fees (Purchase Process) | Fixed (€300 – €600 | Buyer |
| Property Valuation (if mortgage) | Fixed (€300 – €500) | Buyer |
| Notary, Registration, and AJD (Mortgage Loan) | Covered by Bank | Bank |
| Total Additional Costs | 9% to 11% (not including mortgage) |
Practical Example (fictional figures):
| Concept | Calculation (for a €400,000 property) | Cost (€) |
| Sale Price | 400.000 € | |
| IGIC (7%) | 400.000€ x 7% | 28.000 € |
| AJD (1.5%) | 400.000€ x 1.5% | 6.000 € |
| Notary and Registration (Est. 0.6%) | 400.000€ x 0.6% | 2.400 € |
| Administration and Valuation (Est.) | 800 € | |
| Total Additional Costs | (Approximately 8.8%) | 37.200 € |
| Total Investment | 437.200 € |
Conclusion: Plan with Transparency
Understanding the fiscal and administrative reality of Fuerteventura is essential to make a purchase without surprises. The advantage of the IGIC at 7% compared to the mainland VAT makes buying a new home in the Canary Islands a fiscally smart option.
At Casilla de Costa, we work with specialized administrations that can offer you a detailed quote and close the transaction with total security, whether you are a resident or coming from abroad. Ensuring peace of mind in your investment is our commitment.
Need an exact calculation for one of our villas? Contact our team to get a personalized cost breakdown and resolve any questions you may have about the purchase process.
