Canary Islands Face Uncertainty Over New Vacant Property Tax Laws

New housing laws in the Canary Islands have created uncertainty for owners of empty properties. The legislation allows local councils to significantly increase Property Tax (IBI) rates on vacant homes, with the goal of encouraging owners to put these properties on the rental market and help lower housing costs.

This measure is not automatic; it is up to each local council to decide whether to implement it through local ordinances. If they choose to do so, they can increase the tax by up to 150% of the standard rate. The surcharge is progressive: it starts at 50% for properties left empty for more than two years, rises to 100% if the vacancy continues, and hits the 150% cap for owners who hold multiple properties in the same municipality. This final tier is specifically aimed at large-scale investors and investment funds.

To enforce these taxes, councils must verify that a property is truly vacant by checking census data against utility usage. However, there are exemptions for owners who have valid, justified reasons for keeping a property closed, distinguishing between speculative hoarding and genuine personal circumstances.

This regulation is particularly significant for the Canary Islands, where 19.4% of homes are vacant—five percentage points higher than the national average. Statistics from the 2021 census show that Santa Cruz de Tenerife has the highest number of empty homes in the country at nearly 92,300, followed by Las Palmas de Gran Canaria with 65,900.

Despite these high numbers, the policy is currently stalled. Neither capital city has announced plans to implement the tax, as local governments remain cautious about the complex technical challenges involved in managing such a significant policy shift.