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MOVING TO SPAIN

What you need to know before moving to Spain’s Canary Islands 

The Atlantic archipelago is a paradise with arguably the best climate in Europe, but there are many practical considerations foreigners should factor in before moving there. The Local Spain’s editor Alex Dunham, who grew up in Tenerife, explains. 

What you need to know before moving to Spain's Canary Islands 
There’s a big difference in population between the islands. The order, from most populated to least is Tenerife (928,604 residents), Gran Canaria (855,521), Lanzarote (155,080 - pictured in the photo), Fuerteventura (119,732), La Palma (83,458), La Gomera, (21,678), El Hierro (11,147) and La Graciosa (732). Photo: Daniil Sliusar/Unsplash

The Canaries have the best weather in Spain, but it isn’t always perfect 

The islands’ location off the coast of Western Sahara, together with the trade winds (alisios) that constantly breeze through the archipelago, ensure that for the most part it’s never too hot and never too cold. 

From September to July you can expect it to be between 18 and 28 C, remaining warmer than other coastal locations in southern and eastern mainland Spain in winter. 

It’s no wonder that the Canaries are known as the land of eternal spring, but those who enjoy a change of seasons (and wardrobe) may find it ‘too’ perfect.  

It’s also worth noting that the more mountainous islands tend to have microclimates, meaning that you aren’t guaranteed warm weather in places of high altitude. 

And the biggest meteorological drawback of the Canary Islands is that calima – sand from the nearby Sahara desert – is blown over several times a year, turning the sky yellow, making it harder to breathe and covering everything in dust.

READ ALSO: What is calima and is it bad for you?

With sun almost all year round and arguably the best beaches of all the Canaries, Fuerteventura is perfect for sun seekers, but it’s also very exposed to calima. Photo: Michal Mrozek/Unsplash

You get huge discounts on flights and the islands are well connected 

For some Spaniards and foreigners who settle in the Canary Islands, one of their main complaints is that after a while they get the sense of being cut off from the rest of Spain and Europe. 

This Canary cabin fever is somewhat justified, as it takes two and half hours to fly to Madrid, three hours to Barcelona, and more than a day by ferry to southern Spain. Unfortunately, spontaneous road trips to another European country aren’t possible.

If there is a silver lining to draw it would be that most Canary residents get a discount of up to 70 percent on flights, making it possible to travel to and from mainland Spain for cheap prices. 

There are also a surprisingly high number of direct flights from the main islands of Tenerife and Gran Canary to many countries in Europe, a couple of direct flights to Africa and a new route to New York.

Tourists check the arrival and departure boards at the Reina Sofia Tenerife-South airport. Photo: Desirée Martín/AFP

Overpopulation has its knock-on effects

Despite the small size of the eight Canary islands (with a surface area of less than 7,500 km2), they have a population of more than 2.2 million inhabitants.

That means that the region is the most densely populated in Spain, but this is really only the case in Gran Canaria and Tenerife, which are home to more than 90 percent of the archipelago’s population. 

This overpopulation on the two main islands has had other unintended consequences of keeping rent as well as land and property prices higher on average due in part to the lack of space, even though wages and living costs in the Canaries are lower than in many parts of the mainland. 

Another knock-on effect is the sheer number of vehicles on the islands. If the Canary Islands were a country, they would be the sixth in the world in terms of most cars per capita.

Las Palmas de Gran Canaria is by far the most populous city in the Canary Islands with 378,000 inhabitants. Photo: Vidar Nordli-Mathisen/Unsplash

It’s not all tourism

Many abroad believe the Canary Islands are one big holiday resort where British breakfasts and German socks in sandals reign supreme. 

Unfortunately (or fortunately depending on how you look at it), this image has been perpetuated by visitors who haven’t ventured much further than their hotels or closest beach. 

The reality is that tourism in the Canaries remains centred around a handful of holiday hotspots where everything is focused on accommodating foreign visitors, but the majority of cities, towns and villages across the islands are Spanish in appearance and culture and inhabited mainly by canarios.

There are beautiful colonial towns such as La Laguna in Tenerife, Teror in Gran Canaria and Santa Cruz de la Palma that have hardly changed over five centuries and offer a real experience of true, historic Spain. 

Centuries-old Canary balconies in Santa Cruz de La Palma. Photo: Flo/Unsplash

Online shopping is a nightmare

The Canaries’ 1,700km distance from mainland Spain, along with the fact that they have their own specific sales tax (IGIC instead of IVA/VAT), means that many businesses in Europe don’t bother to deliver their goods to the archipelago.

Any attempted purchase on Amazon for example is likely to be met with a “no enviamos a Canarias” (we don’t send to the Canary Islands). There are some companies now specialising in making online shopping easier for isleños, but delivery times are longer and fees are higher.

 The Canaries have historically been a key trading stopover point between Africa, the Americas and Europe, and to this day their ports are well supplied and you will be able to find most of what you want in the shops. But if you’re looking to purchase something very specific, you may run into some problems. 

The port of Santa Cruz de Tenerife is the most important in the archipelago together with Las Palmas de Gran Canaria’s. Photo: cocoparisienne/Pixabay

Work for foreigners is mostly limited to tourism and teaching 

The islands’ economy relies heavily on tourism and Santa Cruz de Tenerife and Las Palmas de Gran Canaria are not exactly Madrid and Barcelona in terms of varied work opportunities. 

Foreigners looking to work for a local business may find their greatest chances of landing a job are with something relating to language teaching or tourism as this is where they have the upper hand. 

There’s the same lack of entrepreneurial spirit on the islands as in many parts of Spain, not least because bureaucracy and official matters are complex and slow, so standing out with a bright idea is possible for anyone who’s business savvy and patient. 

What does seem to be booming is the community of digital nomads and remote workers on the islands, with authorities keen to promote the quality of life of the archipelago for anyone wanting to work remotely.

READ ALSO: Spain’s new law for startups, investors and digital nomads

Tourists walk past a souvenir shop in Los Cristianos in Tenerife. (Photo by Desirée Martín/AFP)

Canarios are friendly but insular-minded 

Spaniards from the mainland will be the first to tell you how amiable canarios are and how they love their soft accent in Spanish, closer to how Cubans or Venezuelans sound. 

They may also point out that canarios are aplatanados (lazy or bone idle) as they definitely take life more in their stride than people from northern Spain. 

What’s certainly true is that despite the many nationalities that visit the archipelago, canarios don’t generally mingle with foreigners (nor are all foreigners interested in mingling with canarios either) . 

Their foreign language skills aren’t great and they tend to stick to their own traditions and people, many seeming content to live in their familiar little paradise rather than taking an interest in the outside world. Most of those with big aspirations tend to leave. 

Santa Cruz de Tenerife’s carnival is the biggest in Spain and a great place to mingle with ‘canarios’. Photo: Desirée Martín/AFP

If I had to describe life in the Canaries in one word…

It would be mellow. 

A move to the Canary Islands will not necessarily provide you with career opportunities or the entertainment and hustle and bustle of Spain’s big cities, but it is a benign place with plenty on offer for a happy life.

The Canaries has one of the best climates in the world for a life best enjoyed outdoors, incredible and very varied nature, a lower cost of living overall, more history and culture than most outsiders imagine, easy-going locals, and despite their far-flung location, great links to Europe.

The laurisilva forests of the greener Canary islands are the perfect place to avoid the crowds and popular tourist spots. Photo: Mihaly Koles/Unsplash

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For members

TAXES

What’s the inheritance tax in each region of Spain?

Inheritance tax varies greatly in Spain depending on what region you or your relations live in. Find out what the rates are in your area in 2022.

What's the inheritance tax in each region of Spain?

Spain’s inheritance or succession tax, known as ‘impuesto de sucesiones‘ is both complex and controversial, but it’s important to understand how it works in order to avoid any unfortunate financial surprises when a loved one with a connection to Spain passes away. 

Spanish inheritance tax is decided by the Spanish State but all of the country’s 17 regions have the right to change these rules to make them more beneficial or detrimental to heirs, luckily the general trend is towards the former. 

The succession tax rates will differ depending on how much is inherited, ranging from 7.65 percent on the first €7,933 up to 34 percent on €797,555+. 

There are many factors to consider, such as which category heirs and other beneficiaries fall into, or the fact that in Spain the spouse of the deceased is also subject to inheritance tax, which is not the case in the UK and many other countries.

What are the different groups of heirs in Spain?

As mentioned above, there are several categories or groups that heirs can fall into and this will depend on how much allowance they can benefit from. The groups are the following:

Group 1: Children under 21 years of age

Group 2: Children over 21 years of age, spouses and parents

Group 3: Siblings, nieces, nephews, as well as aunts and uncles

Group 4: Cousins or more distant relations

EXPLAINED: How choosing the right region in Spain can save you thousands in inheritance tax

What are the inheritance rates in my region?

Andalusia

In Andalusia, the inheritance tax rate varies between 7 percent and 36 percent, depending on the value of the inheritance. However, recently the Andalusian government approved, through a Royal Decree, a reduction of 99 percent, both for inheritance and gift tax for those who are included in groups 1 and 2.

Aragón

In Aragón there is 100 percent discount on the tax base, with a limit of €3,000,000 for descendants under the age of 21 or for those that have a disability. In addition, the spouse, parents or descendants of the deceased may also benefit from a reduction of 100 percent of the tax base.

Asturias

In Asturias there is an allowance of €300,000 for those groups 1 and 2. For all other groups, it establishes various reductions included in the state regulations. In addition, in case of inheriting a home, the bonus will be between 95 and 99 percent, depending on its value.

Balearic Islands

In the Balearic Islands, for those in groups 1 and 2, deductions of €25,000 are applied, plus €6,250 per year that the taxpayer is under the age of 21, up to a maximum of €50,000. For those in group 3, a deduction of €8,000 is applied and for those in group 4, it’s €1,000. An allowance of €48,000 will also be made for those with disabilities.

Basque Country

For those in groups 1 and 2 in the Basque Country, inheritances with an amount less than €400,000 are not required to pay taxes. When the amount is greater than €400,000, a tax rate of 1.5 percent will be applied.

READ ALSO: Why you should move to this region in Spain if you want to pay less tax

Canary Islands
Those in group 1 get an allowance of €47,859, while those in group 2 get an allowance of €15,957. Those in group 3 will get €7,993, while those in group 4 get no allowance at all. After the deduction, inheritance tax rates are calculated on the remaining balance which range between 7.65 percent and 34 percent on anything above €797,555.

Cantabria

For those in group 1, there is a reduction of €50,000 plus €5,000 for each year the taxpayer is under 21. For those in group 2, it’s also €50,000 and for those in group 3, it’s €25,000.

Castilla La-Mancha

In Castilla La-Mancha those in groups 1 and 2 will benefit from discounts ranging from 80 percent to 100 percent, depending on the amount of the payable base.

Castilla y León

Castilla y León allows reductions for children spouses and parents. Those in groups 1 and 2 will benefit from an allowance of €60,000. An additional reduction of €6,000 will be applied for each year the taxpayer is under the age of 21. A variable reduction will also be applied, which is calculated as the difference between €400,000, plus the sum of the previous amounts and the state deductions.

Catalonia

In Catalonia, spouses will receive a bonus of 99 percent and the rest of the heirs in groups 1 and 2 may apply a bonus that varies between 57 percent and 99 percent, depending on the tax base.

Extremadura

A bonus of 99 percent is applied for amounts of up to €300,000 euros between parents, children and spouses.  

Galicia

In Galicia, heirs in group 1 have an allowance on amounts up to €1,000,000, plus there is a reduction of €100,000 for each year the beneficiary is younger than 21, with a limit of €1,500,000. For those in group 2, the reduction varies between €900,000 and €400,000, depending on the taxpayer’s age. In the cases of groups 3 and 4, the bonus will be €16,000 or €8,000. The applicable rate in Galicia stands at between 5 and 18 percent, which is well below the rest of the regions. 

La Rioja

Those who inherit in La Rioja benefit from a deduction of 99 percent of the tax quota if the tax base is less than or equal to €500,000. The deduction will be 98 percent for amounts that exceed €500,000.

Madrid

Madrid applies a discount of 99 percent of the tax quota for taxpayers included in groups 1 and 2. In addition, for the heirs included in group 3, it establishes a discount of 15 percent or 10 percent, depending on what relation they are to the deceased.

Murcia

In the region of Murcia, the law includes a deduction of 99 percent for those in groups 1 and 2. Likewise, for the rest of the heirs, it also recognises different reductions depending when the money is inherited and the amount to be received.

Navarre

In Navarre no discounts are applied, but how much tax varies according to what group you fall under. Spouses for example have a rate of 0 percent up to €250,000, and 0.80 percent from there upwards. In the case of descents and parents, the applicable rate varies between 2 percent and 16 percent.

Valencia

In Valencia discounts of 75 percent are applied for those in group 1 or 50 percent for those in group 2. In case the of those with disabilities, the taxpayer will also receive a bonus of 75 percent.

Case study example

For example, in the case of a 30-year-old son who inherits assets worth €800,000 euros, the most amount of tax would be paid in Asturias, with at €103,135.48; followed by Castilla y León €81,018.76; Valencian €63,193.76; Aragon €55,466.81; La Rioja €32,342.86; Castilla-La Mancha €31,759.23 and the Canary Islands €31,748.63. 

These regions would be followed by Navarre €17,000; Catalonia €9,796.89; the Balearic Islands €5,950; the Basque Country €3,150; Murcia €1,640.49; Extremadura €1,587.96 and Madrid €1,586.04). Andalusia, Cantabria and Galicia have a net quota of 0.

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