Two archipelagos, two very different sets of postcards: black volcanic beaches under a constant spring on one side, limestone coves and Catalan street signs on the other. Both are reached by a short flight from the mainland, both have year-round communities of Europeans, and both are treated by Spanish law as part of the same country with a few important exceptions. If you are thinking about living in the Canary Islands or the Balearics, those exceptions are the whole point.
Do EU citizens register differently on the islands?
No. Residence registration for EU citizens is national (Royal Decree 240/2007), so in Las Palmas, Santa Cruz de Tenerife or Palma you go to the foreigners' office of your island or province, take the same documents and receive the same certificate as on the mainland. If you are living in the Canary Islands, our residence certificate guide applies unchanged. The same goes for the NIE, the padrón and Cl@ve. Only appointment waiting times differ, and they can be longer in the islands' busiest offices.
Health care and education are regional services, so your health card comes from the Canary Islands or the Balearic health service, and your child's school place from the regional education authority.
How is tax different when living in the Canary Islands?
This is where the islands change your life. The Canary Islands have a special economic and fiscal regime.
Indirect tax. The Canary Islands do not have VAT: they have the IGIC (Impuesto General Indirecto Canario), managed by the Canary tax agency. The general rate is 7%, with a 0% rate for some basics and 3%, 5%, 9.5% and 15% for other goods and services.
Buying a home. A new home pays IGIC instead of VAT: 7% in general, with reduced rates in some cases, for example for a main home within price limits that depend on the buyer's situation. The limits change with the regional budget law, so check them with the Canary tax agency. A second-hand home pays the transfer tax as everywhere. See buying property in Spain.
A franchise for small businesses. A natural person whose turnover in the previous year was no more than €50,000 (the ceiling was €30,000 until the Canary government raised it in 2026) can choose a small business regime (REPEP) under which their transactions in the Canaries are exempt from IGIC. It is a real VAT-style franchise, which does not exist in the rest of Spain. Filing a quarterly IGIC return is treated as renouncing it for three years.
Income tax. Resident taxpayers in the Canary Islands pay the national scale plus a regional scale. The 2025 regional scale runs from 9% up to €13,748 to 26% above €123,745.
Companies. The Zona Especial Canaria (ZEC) offers a 4% corporate tax rate to new companies that register and meet strict conditions: head office in the Canaries, a resident director, an eligible activity, a minimum investment (€100,000 on Gran Canaria and Tenerife, €50,000 on the other islands) and a minimum number of jobs.
What about the Balearic Islands?
The Balearics use VAT like the mainland but apply their own regional rates for several taxes.
Income tax. For 2025 the Balearic regional scale runs from 9% up to €10,000 to 24.75% above €175,000.
Wealth tax. The Balearics set a general allowance of €3,000,000, much higher than the national €700,000, so most residents will never pay it.
Language. Catalan is co-official alongside Spanish, and schools teach in both. Our guide to schools in Spain explains how the language of teaching shapes the choice of school. Public nursery places have been free since 1 September 2023.
Is it cheaper to travel when you live on an island?
Yes, and this is one of the real perks. Residents of the Canary Islands, the Balearic Islands, Ceuta and Melilla get a 75% subsidy on the fare of scheduled flights between their home territory and the rest of Spain, and between the islands, applied directly to the ticket. It does not include airport taxes, you have to declare your residence when you buy the ticket and prove it at check-in, and accepted proof includes your ID or TIE and a travel certificate from the town hall. A resident certificate needs the padrón, so that is another reason to register there early.
Is it cheaper to live on an island?
Do not assume so. The official figures we use for the rest of Spain do not give a clean answer for the islands, and housing in tourist areas can be costly. Take your actual rent, your taxes and your travel into account. Read cost of living in Spain to build the sums.
What changes for work, renting and healthcare when living in the Canary Islands?
Work. Employment law is national, so the 40-hour week, the 30 days of paid leave and the minimum wage are the same as on the mainland. What changes are the regional public holidays and the local collective agreements, which can set pay scales for sectors such as hospitality. Our guide to working in Spain covers the national rules.
Self-employment. The social security contributions of an autónomo are the same everywhere, but in the Canary Islands the indirect tax is the IGIC, with its own census form (modelo 400) and its own tax agency. Check with the Canary tax agency rather than the national one, and consider whether the small-business exemption suits you.
Renting. The national tenancy law applies on the islands. What the regions decide is where the landlord must lodge your one-month deposit and how; ask the housing department of the Canary Islands or the Balearics, and always ask the landlord for proof of the deposit. Our guide to renting in Spain explains your rights.
Healthcare. You apply for your health card at the Canary Islands health service or the Balearic health service, depending on where you live, after your right to care has been recognised. The route to that right is the same as elsewhere in Spain. The practical details, such as how to book appointments, are decided by the region.
What should you check before choosing an island?
Make a short list. First, how you will get on and off the island: the number of airports and airlines serving it, and the cost of a flight even with the resident discount. Second, the school you will use, since international schools are concentrated in a few places: Las Palmas, Tenerife, Ibiza and Palma have schools recognised by the French education agency, among others. Third, where the hospital is, because some islands are small. Fourth, the actual rent, since a tourist economy can make long-term rentals scarce. Finally, your car, if you plan to bring one: it has to be registered in Spain, and the costs and rules differ in the islands, so ask the DGT and the regional tax office before you ship it.
Which public holidays do the islands add?
The Canary Islands celebrate their regional day on 30 May, and each island has its own local patron-saint holiday. The Balearics add 26 December (Saint Stephen) in 2026, and Easter Monday. Holy Thursday (2 April in 2026) is a holiday in both archipelagos, as in most of Spain. Local holidays are set by each town hall. Always check before you plan an appointment.
How do you choose between the two?
The Canary Islands suit people drawn to a mild climate through the year, small-business tax advantages and a Spanish-speaking environment. The Balearics suit those who want a closer connection to the mainland and Europe, a bilingual setting and a higher wealth tax allowance. Mallorca or Tenerife is a question to answer with a trial month, in both winter and August.
Both appear in our overview of the best places to live in Spain.