Canary Islands Property Owners Face Uncertainty Over New Vacant Home Tax Surcharges
New housing legislation in the Canary Islands allows municipal councils to impose property tax surcharges of up to 150% on vacant homes to combat housing shortages, though major cities have yet to implement the measures.
New housing laws have created uncertainty for property owners in the Canary Islands. The legislation allows local councils to impose significant surcharges on Property Tax (IBI) for vacant homes, aiming to encourage owners to put unused properties on the rental market and help lower housing costs.
This measure is not applied automatically across the country; instead, it is up to individual municipal governments to decide whether to adopt these tax changes. Depending on how long a property has been empty and how many homes an owner holds, the tax increase can reach up to 150% of the standard rate. Specifically, properties left vacant for more than two years face a 50% surcharge, which rises to 100% for longer periods. A maximum surcharge of 150% applies to large-scale property owners and investment firms.
To enforce these rules, councils must confirm a property is empty by checking municipal records against utility usage, such as water, electricity, and gas. The law does include exemptions for homes left vacant for justified reasons, such as personal necessity or force majeure, to ensure the policy targets speculation rather than unavoidable circumstances.
The issue is particularly significant in the Canary Islands, where 19.4% of homes are vacant—five percentage points higher than the national average. Data from the 2021 Census shows that Santa Cruz de Tenerife has the highest number of empty homes in the country at 92,300, followed by Las Palmas de Gran Canaria with 65,900. Despite these high numbers, the policy remains theoretical; neither city council has yet committed to implementing the surcharges.