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Buying a House in Tenerife

Whether you are seeking a property in the coastal areas of Tenerife or if you want to enjoy the diversity of large cities (Santa Cruz de Tenerife), the steps to follow are not always intuitive. In addition, it is important when buying a house in Spain to consider what taxes and expenses have to be dealt with. All this and much more is explained below.

Tips for buying a house in Tenerife

We would recommend that you:

  • Visit the house personally before paying any amount, that is, check first-hand the condition of the house, the surroundings, the transport routes that connect to the area, etc.
  • Know who owns the house. Make sure that you check any requirements, permits and legal status of the house from the area City planning office. Check for zoning, flood zone maps, architectural requirements and more. There are limitations on building size and any renovations might not be permitted. Many problems occur for these reasons.
  • Once acquired, register the house in the Land Registry, to demonstrate that you have absolute rights on the house that has been acquired in Tenerife (what could happen if you buy an unregistered house?).
  • If a deposit agreement is made prior to the signing at the Notary, look for an expert to verify the content of the contract and its effects.
  • Hire a Solicitor to review any documents and include any clauses in the contract that will give you a way out in the event something goes wrong.
  • DO NOT sign a contract without having your Solicitor review the document.
  • DO NOT hire a Solicitor that was referred to you by the estate agent, or who works directly with the Real Estate Agency. We strongly suggest that you get an independent Lawyer.
  • DO NOT sign any exclusive agreement with an estate agent.

To avoid all such grave errors,  uncertainties and delays, it is strongly recommended that you delegate all tasks to a lawyer experienced in dealing with conveyances in Tenerife.

Buying a House in Tenerife

Buying a House in Tenerife

Buying a House in Tenerife as a foreigner

As is generally the case with buying a property in Spain the only essential requirement for buying a house in Tenerife is to obtain the NIE (Foreigner Identification Number). It is a personal and unique number, essential to carry out any transaction in the island, from opening a business to buying a house. When a non-resident obtain the NIE, they can start the process for the purchase of the house. It is not mandatory to open a bank account in Tenerife but it will facilitate the payment of taxes and expenses. The purchase of the house is carried-out at a Notary and is registered in a public registry, that is, the Land Registry. You should bear in mind, that before signing the deeds at the Notary, it is very common to sign a private contract of sale called “contrato de arras” (deposit contract), where a part of the price is already paid, on account of the final price which is paid when the house is transferred at the notary.  

What taxes and expenses must be paid when purchasing a house in Tenerife?

The purchase of a house is subject to various taxes, which increase the cost of the house substantially. Among them are:

  • The Value Added Tax (IGIC), in the case of new houses or first transmission of a property. Tax rate of 7 %.
  • The Property Transfer Tax (ITP), in the case of second-hand residences or second transmission. The tax rate is 6.5 %. It must be paid if VAT (IGIC) is not applied in the transmission.
  • Tax on Documented Legal Acts (AJD). It must be paid if the house is purchased and VAT (IGIC) is applied, and if it is purchased through a mortgage.

In addition, there are other expenses that must be taken into account:

  • Public deed at the notary.
  • Registration of the deed in the Land Registry.
  • In the event that it is necessary to request a mortgage, it is also necessary to include the appraisal and the notary, the mortgage taxes and the registration of the deed in the Land Registry.

During the year you will also have to deal with other taxes, such as the Land Tax (IBI), property taxes, the Wealth Tax – if applicable -, the Personal Income Tax (IRPF) or, if you do not live in Spanish territory permanently, the Non-Resident Income Tax in Spain. We can assist with ensuring compliance with all taxes relating to home-ownership in Tenerife.

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Property Purchase

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* If your local town is not listed, a lawyer from our nearest office will be happy to assist you.

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1Who is this Service for?

Buying property abroad is a very popular activity but can be fraught with dangers.

Given that the purchase of a property is one of the most important investments that most people will make in their lifetime, it is crucial to be advised by an independent expert.

2What does this service consist of?

  • Review of the purchase contract.
  • Management of negotiations and counter-offers.
  • Verification that the seller is able to pass good title.
  • Registry search to ensure property free of any charges or other mortgages.
  • Ensure outstanding taxes on the property are up-to-date before transfer.
  • Make sure that all items included in the sale (fixtures and fittings etc.).
  • Attendance and assistance when signing the deeds of the property.
  • Management of negotiations and counter-offers
  • In depth information about schools, sports clubs, shops, cultural organisations, etc.
  • Payment of stamp duty.
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3Free Support Services Included

When combined with the free and innovative Advocate Abroad support services you can be sure that you are obtaining completely transparent legal services from registered and regulated English-speaking lawyers abroad.These support services include:

  • Verification of the regulatory status of your professional.
  • Fees as recommended by the Local Professional Body
  • Fees specified in advance and legally guaranteed.
  • Service levels agreed in advance and guaranteed.
  • All professionals must hold professional indemnity insurance.
  • Professionals' proficiency in English monitored.
  • Continuous quality controls and reviews.

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