The Canary Islands: Is It Time To Make A Permanent Move?

For many people, it might be a distant dream, but with great communication and flight connections between a majority of destinations, it is easier than you might think to escape your working life’s hectic pace by moving abroad.

The Canary Islands meet many of the qualifications and make it the perfect setting for a higher quality working life or stress-free and happy retirement. There are seven islands for you to choose from, and we are going to provide you with a useful guide to some of the important practical and financial issues that you might not have considered yet.

Working in the Canary Islands

Brexit has motivated numerous individuals to move their businesses abroad. One favourite is the Canary Islands since it offers the most preference tax rates in all of Europe. The following is an overview of the most significant incentives:

Although the Canary Islands belong to the European Union, they are considered to be outside of the territorial scope subject to the Spanish value-added tax (VA). In addition, rather than the 21% Spanish VAT rate they have an IGIC 7% general rate.

Businesses that are established in the Canaries are able to benefit from tax credits for investing in Western African countries, and also for certain exporting activities (15% for certain advertising expenses and 15% for investments made in permanent establishments or incorporation of subsidiaries)

The Reserve for Investment (RIC) in the Canary Islands enables businesses to lower their taxable profits by up to 90% through reinvesting in certain Canary Island qualifying assets (limited companies and sole traders).

Businesses that are established within the Canary Islands might benefit from additional deductions compared to Spain’s general tax deduction system. They include innovation, development, and research, to acquiring fixed assets or film productions.

Healthcare

If you make national insurance contributions and register to work in Spain, you can receive the same state-run health care that Spanish nationals get. As a retired individual receiving a UK old age state pension, you may contact the Overseas Healthcare and request an S1 Form to register in Spain for free healthcare. The law protects access to healthcare by pregnant women and children.

If there are no means for you to receive cover for state-run healthcare, then there is a special pay-in scheme that is offered by regional health authorities in Spain. The public health insurance scheme is available nation-wide. A monthly fee must be paid to get access to state-run healthcare, and each autonomous region manages the scheme.

For individuals under the age of 65, the basic monthly fee costs €60 and for those 65 and older the fee is €157. However, there is no subsidy on prescriptions and you will have to pay 100% of your prescription costs. At this time this type of cover doesn’t provide holders with EHIC, so if you are planning on travelling, then you should consider getting private travel insurance. Check with your chosen region to make sure that the scheme is available there.

Retiring in the Canary Islands

If you would like to improve your life, then you might want to consider retiring abroad. Among expats searching for a retirement that offers both a sunny climate and low cost of living, Spain is very popular. Income tax might be higher due to having a lower personal allowance compared to the UK, however, your savings will still take you further than and provide you with a higher standard of living and comfortable lifestyle.

Canarian special zone (ZEC)

In January 2000 the European Commision authorised ZEC as a low tax zone for the Canary Islands. New Companies carrying out activities that the ZEC Consortium Board has authorised receive numerous benefits:

Reduced 4% Corporate Income Tax rate as opposed to the current 25% rate.

Exempt from Stamp Duty Tax and Property Transfer Tax.

Exemption from operations involving other ZEC companies and exempt from IGIC on imports (on both finished products or investment materials and raw materials).

Dividends that a ZEC company sents to the parent company located outside of Spain are exempt from having pay tax at the source. The International Double Taxation Agreement is applied at the destination.

ZEC company requirements:

Must be a new branch or company

One administrator at least must be residing in the Canary Islands

Invest a minimum of €50,000/€100,000 (depending on whether it is a smaller island or a capital island – Gran Canaria or Tenerife)

Create a minimum of three jobs/five jobs (depending on whether it is a small or large island, as above).

 

Buying Property In The Canary Islands – A Regional Overview

The perennial popularity of the Canary Islands as a tourist destination comes as no surprise. The islands offer a pleasant climate, outstanding beaches, natural beauty, and idyllic culture and architecture.

Thanks to affordable air passenger service tying the Canary Islands closer to Europe, the tourist economy is booming like never before. UK investors have grown particularly fond of buying Canary Island property for permanent relocation, holiday residence, or rental income. (Talk to us if you’re buying Canary Islands property and need help with holiday home insurance).

Are you just getting started with your island property search? Let us give you a handy rundown on some of the best destinations to consider in the Canaries.

Tenerife

Largest of the Canary Islands, Tenerife is also probably the most accessible. Multiple flights from every part of the UK arrive regularly on Tenerife. This is a superb place to buy a holiday home, as your personal retreat can also turn into a very profitable rental property when you’re not using it.

Playa de las Americas

This resort community is positively bursting with bars, nightlife, restaurants, and water sports, making it ideal for visitors who crave excitement on their holidays. If you’re looking for a slightly calmer ‘compromise’ sort of neighbourhood, consider San Eugenio Bajo. Located on the periphery of Playa de las Americas, this area is peaceful enough to unwind in but still conveniently located to all of the region’s attractions.

Los Cristianos

Just a little south of Las Americas, you’ll find this community packed with beachfront holiday apartment complexes. The extensive supply of nearby amenities makes this a superb area for holiday rental property. Los Cristianos is an extensive sheltered bay with two excellent beaches flanking its harbour. Watersports needs are met by the nearby Playa de las Vistas, and volcanic Mount Gauza is visible in the distance.
There are a few reputable Los Cristianos estate agents who can provide you with expert advice about the location and the many complexes you can purchase a property from so do your research and utilise their services.

Adeje

Spanning the stretch between Playa Paraiso and Playa Fanabe, Adeje is a popular destination offering both high-rise apartment blocks and low-rise townhouses. Accommodations are affordable and the community is noted for both its beaches and its nightlife.

Playa de las Teresitas / San Adres

These always-bustling destinations are definitely worth considering if you want to invest in rental property with plenty of guest demand. Prices are generally affordable, making these tourist hotspots quite profitable for canny property owners.

Lanzarote

The most volcanically-active of the Canary Islands, Lanzarote is famous all over the world for its beautiful, exotic black sand beaches. Lanzarote has a long-running and carefully-protected reputation as the most exclusive of the Canaries. Thanks to restrictive building regulations, Lanzarote has far less high-density development than neighbouring islands. Residential properties on Lanzarote tend to follow the same simple style of unadorned white cubism, and buildings rising more than three floors are rare.

Puerto del Carmen

As the oldest and most fashionable resort on the island, Puerto del Carmen boasts a number of historic attractions. It has a beautiful old town, a picturesque fishing harbour, and six kilometres of beautiful beaches. Located just ten minutes from the nearest airport, Puerto del Carmen is a superb place to find some of Lanzarote’s most prestigious investment properties. Property values tend to be uniformly high and offer long-term stability, but bargains are available for sharp-eyed buyers.

Costa Teguise

Located on Lanzarote’s eastern side, Costa Teguise offers facilities like windsurfing schools, a water park, and an excellent golf course. There are plenty of bars, clubs, and restaurants, though overall the community’s nightlife is somewhat more subdued than that of Puerto del Carmen. Costa Teguise is especially popular for expatriates looking for a full-time residence in the Canaries or for those looking to purchase a rental apartment or villa.

Playa Blanca

A half-hour’s drive from the airport, on the island’s southern tip, the fully-featured tourist community of Playa Blanca offers many attractions. It has outstanding beaches and restaurants, and the Papgayo Beach resort lies just a few minutes outside the town. Just isolated enough to be exclusive, Playa Blanca has more than enough amenities to satisfy even the most demanding visitor.

Fuerteventura

Fuerteventura boasts some of the very finest seaside terrain in the Canary Islands. Its pristine white beaches are lapped by clear turquoise seas. Fuerteventura is also attractive because it is one of the Canaries’ least-commercialised destinations. Expatriates tend to concentration on resort communities like Corralejo’s Caleta de Fuste. Investors will find no shortage of property opportunities, running the gamut from luxury villas to studio apartments.

Corralejo

At the north end of the island, Corralejo is well known for its strong rental prospects. The Caleta de Fuste resort is particularly popular with investors. It’s located no more than ten minutes away from outstanding beaches and shopping districts. The resort includes tennis courts, a pool, and a gym in order to make it more attractive for holiday rentals. The nearby Fuerteventura Golf Resort is also an excellent investment target. Corralejo is an outstanding holiday community, so this area is particularly well-suited to purchasing rental property.

Gran Canaria

Don’t be misled by the island’s name; Gran Canaria is actually the Canaries’ third-largest island. Where it reigns supreme is in terms of population. Almost 50 percent of the Islands’ population lives on Gran Canaria. The island features surprisingly diverse terrain from the verdant north to the desert south and the mountainous interior in between. Gran Canaria offers an enormous variety of activities to go along with its settings, covering attractions like hiking and riding as well as the common water sports and beach-going.

Las Palmas

A thriving commercial centre, Las Palmas includes many different neighbourhoods. Holiday and investment properties are available at every size and level of luxury. The sheer variety and vitality of the city is its greatest attraction, but the beaches at Playa de las Canteras are also always popular. Nicely-located property anywhere in Las Palmas presents excellent profit potential, and the city is equally attractive for relocation, rental ownership, or holiday residence.

Meloneras

Known as Gran Canaria’s version of Beverly Hills, Meloneras is an extremely luxurious community. It’s conveniently located near Playa del Ingles and Maspalomas, and there are also tons of high-end options for shopping, dining, and drinking in the vicinity. Meloneras’s gorgeous 18-hole golf course with its spectacular views also makes the area especially attractive to golf-minded visitors. It takes a significant amount of money to invest in Meloneras property, but the returns are also greater than normal.

Puerto de las Nieves

Puerto de las Nieves, clinging tight to the northern end of the island, is one of Gran Canaria’s less-developed communities. The town has a harbour, but the population is low and the coastline is wild and natural. This is the perfect area for nature-minded visitors. The surrounding highlands offer countless superb hiking trails. For investors the area’s affordable property prices are particularly attractive; it’s one of the best parts of the island for budget-conscious buyers.