Canary Islands tax differences: IGIC and living costs for retirees
Many expect the Canaries to be noticeably cheaper because IGIC is lower than mainland IVA. That’s true for some shopping — but not for everything. This guide explains where the savings are real, what people don’t warn you about (shipping, online VAT, vehicle import), and the practical checklist retirees need.
By Iria Mos·Editor — money, healthcare and housing
IGIC is a lower indirect tax than mainland IVA — the standard IGIC rate is much lower than Spain’s 21% IVA, but check the official rates before big purchases.
The Canaries save you on some goods (food basics, local services) but island living can be more expensive once you add freight, seasonal rents and limited competition.
Shipping furniture, importing a car or ordering from mainland online shops is where people get a nasty surprise — you’ll pay port fees, customs and different tax treatment.
Hire a local gestor for customs/IGIC questions, register for an NIE and padrón, and rent for a year before you buy.
What people assume — and what actually happens
Assumption: Canaries = cheaper because IGIC is lower than IVA. Reality: yes, the IGIC framework gives lower headline rates on many items. But retirees often forget three costs that erase the benefit: freight and handling for anything shipped to the islands, fewer low-cost housing options in the most popular towns, and online retailers charging mainland VAT (IVA) or refusing to ship without extra fees. You save on the tax line. You don’t always save on the final price.
IGIC vs IVA — the numbers and what they mean
Short version: IGIC is the Canary Islands’ indirect tax; IVA is the mainland’s VAT. As of 2026, the standard IGIC rate is much lower than the mainland standard IVA of 21%. Officials update bands occasionally — check the Agencia Tributaria site before big purchases: agenciatributaria.es.
Simple comparison (check official sources for current bands)
What
Canary Islands (IGIC)
Mainland Spain (IVA)
General indirect tax rate
Lower (standard IGIC significantly below 21%)
21% (standard)
Reduced bands
Lower reduced rates apply for essentials (0–small %) — varies by item
Several reduced bands: 10%, 4%, etc.
Typical effect for shoppers
Everyday goods can be cheaper; imported items/additional fees often cancel savings
Higher headline tax on many goods
Where IGIC genuinely helps retirees
You notice the difference most on local purchases: supermarket staples, locally-produced food, many services and municipal offerings are charged under IGIC rules. That means smaller tax on the receipt at the till compared with the same product on the mainland.
Examples where the savings are clear: weekly groceries from local markets, restaurants that source local produce, and small repairs done by local tradespeople. If you live on an island and buy local, the lower indirect tax shows up in your monthly bills.
The part nobody warns you about until you’re already in it
This is the big one: logistics. Everything that needs to be shipped — furniture, a car, gardening equipment, online orders — picks up freight, port handling fees, customs paperwork and sometimes extra taxes. Retailers on the mainland will often charge IVA at checkout and either refuse to ship to the Canaries or add a handling surcharge. If you buy furniture for €2,000 on the mainland because the pre-tax price looked attractive, the final cost after shipping, port handling and the Canary tax treatment can make that bargain a loss.
Importing a car is another late surprise. Even if the vehicle tax regime differs, you’ll still face shipping, homologation tests (if applicable), registration fees and bureaucratic delay. A gestor who knows IGIC and the Canary customs process will save you time and often money.
Monthly budget — what to expect
How much you’ll spend depends on which island, the town, and how tied you are to mainland supply chains. Below are rough ranges to give you a planning frame. These are estimates — use our Tenerife cost page for local detail and update them against current prices: Cost of living in Tenerife.
Typical monthly costs for a single retiree (ballpark, 2026)
Item
Canary Islands (examples)
Comment
Rent (1-bed, outside tourist hotspots)
€600–€1,000
In tourist towns expect higher seasonal peaks
Groceries & household
€200–€350
Locally produced basics cheaper; imported items cost more
Utilities (electricity, water, internet)
€80–€150
Electricity can be higher than mainland in some islands
Private health top-up / insurance (if needed)
€90–€200
Depends on age and pre-existing conditions
Ferry/flight home visits
€30–€300 per trip
Frequent travel increases annual cost noticeably
Practical checklist — what to do, in roughly the right order
Register on the padrón at your town hall (necessary for local discounts and some administrative steps).
Decide about importing goods: get quotes for shipping + port handling + any customs paperwork.
If you plan to bring a car or significant household items, consult a gestor experienced with Canary customs and IGIC.
Check pension tax treatment and Spain’s residency tax calendar; consult a tax adviser if you’ll be tax resident: find a gestor and see the residency calendar: Spain residency tax calendar.
Factor in travel costs to the mainland for specialist medical appointments or family visits.
Taxes you’ll still feel — beyond IGIC
IGIC only affects indirect purchases. Income tax (IRPF), property taxes (IBI), non-resident property tax and capital gains follow the national/regional tax rules. Becoming a tax resident (generally spending more than 183 days a year in Spain) means your worldwide income enters Spanish tax rules. The Canary Islands may offer some regional tax allowances, but do not assume your total tax bill will be lower just because IGIC is lower.
If you’re on a non-lucrative visa, your financial proof and bank statements are checked by consulates — and later Hacienda will want correct residence details if you change status. Read our notes on documentation and keep your paperwork tidy.
The single thing most people get wrong: assuming a lower headline IGIC means a cheaper life. The tax difference matters, but only for some purchases. Shipping, local housing pressure, seasonal tourism, and the quirks of island supply chains often wipe out IGIC savings. Rent first, buy later, and get a gestor before you import anything.
FAQ
Will online shops charge IGIC or mainland IVA when they send to the Canaries?
Many mainland retailers default to charging IVA at checkout and either refuse Canaries delivery or add handling. Some specialised sellers will calculate IGIC and adjust the price, but this is inconsistent. Always check the seller’s shipping policy and ask for an IGIC invoice if the cost matters. Large purchases are worth a phone call or a quote that itemises shipping and taxes.
If I become tax resident in the Canaries, will my pension be taxed differently?
Your pension is taxed under Spanish income tax rules when you’re tax resident. Regional differences exist, but IGIC does not change pension taxation; that’s IRPF territory. Check with a tax adviser or gestor about double-tax treaties with your home country and about any Canary-specific deductions.
Is it worth hiring a gestor to sort IGIC and customs?
Yes. For most retirees the modest fee pays for itself. Gestores know the paperwork for importing goods, registering vehicles, and applying the correct IGIC treatment. If you plan to ship furniture or a car, get a quote from a gestor before you sign anything.
Official tax rules change. Before you commit to large purchases or an import, check the current IGIC bands at Agencia Tributaria and speak to a local gestor.
Answer a few questions and we’ll add the tax steps that actually apply to you — where you’ll be resident, what your pension pays, and what to do before you leave.
Iria works between Spain and France and comes from the same corner of the tourism sector, the part that ends up answering questions about doctors, contracts and money rather than beaches. On HolaRetire she looks after healthcare, tax and housing, and is the reason those guides quote figures and form names instead of generalities.
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