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  • Writer's pictureFito Benitez

7 Benefits of Investing in Holiday Homes for Vacation Rentals in the Canary Islands [2021 Edition]

Updated: Oct 19, 2021

The Canary Islands combine a set of benefits ranging from high returns, lower costs, and investment and regulatory safety around holiday homes and vacation rentals. This combination makes it a unique location for holiday home investments, and one of the best inside the European Union.

Sentimentalisms aside, these are seven solid money-saving reasons why to invest in a holiday home for vacation rentals in the Canary Islands.

  1. A steady tourism industry activates cash-on-cash returns between 12% and 22%, or ROIs between 20% and 38% for semi- and detached houses, including villas and bungalows.

  2. Property tax in the Canary Islands is only 6.5%, compared to 10% in mainland Spain. On a €300K property investment, that represents €10 500,00. Wouldn't you rather spend that money on improving the property to increase its appeal and rent price?

  3. As an EU citizen, you only pay 19% taxes on the rental's net income, and you are exempt from double taxation. Note that the 19% is AFTER you have deducted ALL property expenses.

  4. In the Canary Islands services are taxed only 7%, compared to 21% in mainland Spain. That's huge, especially for holiday homes that use services to run vacation rentals. If in a year you are buying €10 000 worth of services, instead of paying an extra €2100 in taxes, you will be paying only €700, representing a €1400 saving.

  5. The holiday home investment market is fully recovered from the 2008's crisis and the risks associated with it have been handled taking the market to its healthiest point in decades.

  6. Vacation rentals represent 90% of all new accommodation since 2008 and are experiencing an increase in demand and prices due to the effects of the pandemic.

  7. The islands enjoy a healthy seasonal and long-term rental market that is the perfect alternative if ever needed.

  8. Despite some fear-mongering from hotel lobby groups, the regulatory environment for holiday homes and vacation rentals makes it extremely safe to invest. It has become a very important part of the local economy and has gained the protection and support of the regional authorities.

If you like what you read but want to know other great reasons why to invest in the Canary Islands, here is an article we wrote about it - 9 Safe Reasons Why to Invest in the Canary Islands, Spain.


Are you considering investing in high-return real estate? Contact Canary Home Invest and we will help you make a proper evaluation based on your personal property preferences and return on investment expectations. Or check out our example case study on €250 000 and €450 000 properties in the Canary Islands to get an idea of what kind of property and return you can expect.

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