Lanzarote is a friendly, warm island with extraordinary landscapes that you can enjoy day after day. The foreign community that has settled on the island has grown in recent years, and if you are also considering it as your new home, then you need to know the cost of living in Lanzarote.
Overview of Monthly Costs
Have you considered starting a new life in Lanzarote? This decision is becoming more common among people who are thinking of retiring to the island, enjoying its advantages for digital nomads, or even starting a family.
The financial aspect is one of the key factors when choosing Lanzarote as a new home, because the cost of living in Lanzarote is lower than in the United Kingdom, mainland Spain, and other parts of Northern Europe.
A digital nomad, for example, needs around €3,832.34 per month to cover accommodation and food expenses, according to estimates from nomads.com. Meanwhile, a family of four requires around €5,149.84.
Housing in Lanzarote
If you want to live in Lanzarote, one of the first expenses you need to consider is housing. Prices vary depending on the location and type of property you select.
In general, considering the data from Nomads, one-bedroom rent in the centre costs around €1,148.06 per month. Staying in an Airbnb costs around €3,083.68 per month, and the average price of a house is €325,364.93.
Monthly Rent Ranges by Area
Rental prices in Lanzarote vary depending on the area where you decide to stay. Among the best places to live are Arrecife, Puerto del Carmen, Haría and Costa Teguise.
Arrecife is the capital of Lanzarote and has all the amenities, as well as a wide range of rental options. In this area, you can choose from modest flats to larger houses. Monthly rental prices range between €600 and €1,200.
Tourist activity and nightlife in Puerto del Carmen are more active than in Arrecife. Consequently, rental prices in this area range from €750 to €2,000 or more.
Costa Teguise is also a touristy area. However, monthly rentals are slightly lower than in Puerto del Carmen, varying between €700 and €1,500.
Haría, in the north of Lanzarote, offers a more peaceful environment. Monthly rentals range from €550 to €1,731. If you prefer a luxury villa in this area, the price can rise to €2,500.
Property Purchase Prices
If you are determined to live on the island, buying a property is an option. Prices, as with rentals, vary depending on the location and characteristics of the property you choose.
In general, you can expect to pay between €2,000 and €4,000 per square metre.
Long‑term vs Short‑term Rentals & Legal Considerations
Long-term rentals are usually more affordable than short-term rentals, especially in tourist areas. However, you may be asked to provide proof of financial solvency.
If you choose to rent a property in Lanzarote, it is important that you become familiar with rental laws. Also, check you have a clear and understandable rental contract.
Living Expenses
After housing, you need to consider daily expenses. Below is a summary of what you need to contemplate.
Groceries, Food & Beverages
Food prices in Lanzarote are comparable to the rest of Spain. Shopping in local supermarkets can cost between €50 and €80 per week for one person, while eating out ranges from €15 to €30 per person.
Utilities: Water, Electricity, Internet
Although the cost of utilities varies depending on consumption, you should budget between €80 and €150. This includes water, electricity, and internet. Remember that in Lanzarote you will not need heating.
On the other hand, if you prefer a high-speed internet service, the price depends on the provider. The cost is around €40 per month.
Transport: Public transit, taxi fares, petrol
Getting around Lanzarote is simple, and using public transport is inexpensive. Tickets are around €1.40, and passes are available.
Travelling by taxi is a more expensive option, as fares vary depending on the distance. If you prefer to use your own car, keep in mind the cost of insurance and maintenance. The average fuel price is €1.11/l.
Another option you can take advantage of when arriving on the island or for getting to tourist spots is the Lastminute-Transfer service.
Taxes and Fiscal Benefits
Lower IGIC vs VAT comparison
One of Lanzarote’s attractions is fiscal policy. On the island, Value-Added Tax is not applied, as in the rest of Spain, but rather the Canary Islands General Indirect Tax (IGIC), which is lower.
The general IGIC rate is 7%, compared to 21% VAT on the mainland.
Canary Islands Economic & Fiscal Regime
If your plan is to invest in Lanzarote, the Canary Islands Economic and Fiscal Regime offers tax incentives for businesses operating on the island. Likewise, the Canary Islands Special Zone (ZEC) offers even more tax benefits for companies that meet certain requirements.
Comparison with Mainland Spain & Northern Europe
Is Lanzarote more affordable than UK, Germany or Mainland Spain?
Yes, Lanzarote can be more affordable than the United Kingdom and Germany, especially with regard to housing and certain foods.
Compared to Spain, local products and rentals are cheaper. However, imported products are more expensive.
Utility and everyday cost comparisons
- Housing: Rent can be lower than in large cities in the UK or Germany. Compared to mainland Spain, it depends on the location.
- Food: Local products tend to be cheaper than in Northern Europe. However, imported products may be more expensive due to transport costs.
- Utilities: Both electricity and water can be more expensive in Lanzarote than on the mainland.
- Leisure: Eating and drinking out can be cheaper than in the UK or Germany, as long as tourist areas are avoided.
Money‑saving tips
- Choose housing in small villages or less touristy areas. This way you will find cheaper rentals.
- Consider flat sharing to save more on housing.
- As for food, eating at home is the best option. Take advantage of the local products sold at farmers’ markets.
- Save on transport by using public transport. If you need a car, consider buying a second-hand one or renting it only when necessary.
Now that you know the cost of living in Lanzarote, are you ready to settle on the island? Your lifestyle and the location you decide to live in will determine your expenses, so good planning before moving is essential.
Specialist in the tourism sector of the Canary Islands with a proven track record in experience management in Lanzarote. My work has always focused on promoting iconic destinations and optimizing transfer and excursion services on the volcanic island.
