What does a foreigner need in order to buy property in the Canaries?
The first thing is to apply for an N.I.E. (Number of Identification for Foreigners), which is basically an ID card anybody with a financial interest in Spain or the Canary Islands is required to have. You’ll also need to set up a non-resident bank account, which is a simple process, but again, we will handle all these administrative procedures for you.

Will we have to pay tax when selling a property?
Yes, as a non-resident you’ll have to pay 5% of the new declared value as a retention to the Spanish Tax Office but provided your accounts are in order, you should get most of this back within five or six months. You will also have to pay 35% of the capital gains as Income Tax, i.e. 35% of the difference between the price you paid for the property and the price you’re selling it for.

Special incentives for companies investing in the Canaries
As more and more people each year are discovering the appeal of the Canary Islands, the tourism economy is shooting up at an unprecedented rate – great news for the financial stability of the region and good news for the visitor as more money is consequently put back into improving the region’s infrastructure and facilities.

However, as if the prospect of a booming population wasn’t enough enticement to encourage new business to the archipelago, the Special Canary Islands Zone (ZEC) was established in the year 2000 to promote even further development by offering unique tax advantages to new companies establishing themselves within this zone.

There are certain criteria to be met before registering for ZEC status (ask us for more details) but ZEC companies will enjoy the following tax advantages:

• Rather than the 30 to 35 percent corporation tax levied on companies in Spain, those sheltered under the ZEC regime will only be charged between one and five percent on profits derived from ZEC activities.
• Exemption from IGIC on delivery of goods and provision of service from one ZEC company to another, and also on the importation of goods.
• Exemption from Capital Transfer Tax and Stamp Duty in business activities and company operations within the geographical area of the ZEC.

As ZEC businesses are considered Spanish resident companies, EU tax treaties are fully applicable to avoid double taxation.