In Tenerife

Q&A on owning property in Tenerife

People have all sorts of questions about owning property in Tenerife, whether about going to the notary, the costs involved in a purchase, how to sell, valuations, taxes, you name it. In the main text part of the page I’ve listed some of the questions I’m most often asked. If anyone has any other questions that aren’t covered, please do post them in the comment box below and I’ll transfer them into the post and give an answer at the same time.

If your question is about complexes, community life or the Law of Horizontal Division please see the Living on a complex page HERE.



Q: When you buy an apartment. does the money have to be paid by bank draft or can it be transferred electronically? Also, does it have to be in Euros to go into a Spanish bank or can it be in Sterling if the seller wants it to go straight to the UK?

A: Monies can be arranged however the buyer and seller agree. Normally this is by bank draft from a Spanish bank in Euros at notary, but payment can equally be made by bank draft in Sterling, or drawn on a British bank, or even transferred electronically to any bank anywhere. Any notarial costs have to be deducted before the seller gets his or her money, but the way that money is paid to the seller at that point is purely a matter of negotiation between seller and buyer. Do be aware that it is in the interests of the buyer not to hand over any money until sure the new escritura has been signed, and in the seller’s interests to have the money before signing. Given the two conflicting interests, and the astronomical risks involved, it is worth going back to basics in my opinion and to hand over a bank draft in notary at the point of signing.


Q: If a buyer pays a deposit and changes his mind, who gets the deposit: seller or agent or both?

A: Normally, if a buyer pulls out of a purchase, s/he forfeits any deposit paid, but whether agent or seller gets it, or whether it’s to be divided, will depend on what is written in the contract.


Q:  Do you hand the notary the bank draft at the point of signing or give it to your solicitor to do so in our presence? Does the banker’s draft have to be for the agreed full amount? How does it all work?

A: To save time, paperwork, monies and keys are all arranged in the notary’s office before coming face to face with the notary himself. The money is never actually handed to the notary anyway, but to the vendor, and it would be entirely normal for each side’s lawyer or other legal helper to exchange monies and keys before the moment of actual signing. The bank draft can be for any percentage of the purchase price – how the monies are paid are entirely a matter of agreement between buyer and seller, though there is now a small limit of the percentage that can be paid in cash. The only rules in this respect are that the method(s) of payment must be listed in the escritura, and that all monies are traceable.


Q: We were thinking about buying our Spanish property in the children’s names for convenience and inheritance tax purposes but I’m worried about any tax/legal implications of doing such a thing.  Any advice?

A: There are no legal implications as such. They would own the property outright and legally it would be nothing to do with you. I’ve known several people buy a property in their children’s name (or transfer it to them later) for such reasons. Any monies involved in a purchase must always be accounted for at notary, but there are no other issues unless you gift them the money in Spain, in which case there would be an issue of Gift Tax: adult children have an allowance of around €16,000 and then a rising tax rate (see HERE for the rates, which are the same as for inheritance tax in Spain).


Costs & Taxes

Q: Could you tell me what costs are involved in buying a property, and how much I should allow for ongoing expenses?

A: You’ll find all the information detailed on THIS page.


Q: We own an apartment but don’t rent it out.We only use it for family holidays.We have just found out that we should be paying property tax based on assumed rental income? Is this true?

A: Yes, there is a notional rental income tax, which assumes legal but undeclared rental income. This is something that should be paid as part of the process of submiitting your annual tax return, which is a requirement for foreign property owners here. It used to be the case that foreign property owners here were required by law to have a gestor/accountant/fiscal representative in order to do this. The requirement to have someone registered to look your affairs here has been lifted, but you are still required to submit a tax return. Please note that this tax is payable by all (including Spaniards themselves) who are property owners but non-resident in the Canaries. Please have a read HERE for all costs you might expect to have to cover as a result of owning property.


Q: How and when is the Spanish tax due and payable? We have been told once a year, quarterly, that we need to submit a tax return each, all conflicting information. We know we cannot claim utilities against the income, only community charges and local taxes and we think we have to pay 24% on the rest.

A: Resident owners of property here should be submitting annual tax returns, but non-resident owners must also submit returns. Those who are in receipt of declarable rental income submit a modelo 210 quarterly. With regard to the tax rate, at least for 2014, as for 2012 and 2013, it’s 24.75%: it used to be 24% but the rise was imposed as a “special temporary crisis measure”. For jointly owned properties, a return has to be submitted in the name of both owners, but this can be a joint return, and does not necessarily have to be two separate returns. As far as deductions are concerned, non-resident property owners who let out can now deduct all expenses connected directly with the letting of the property, eg electricity, water, cleaning services, etc. A gestor, asesor or accountant will help with the computations so that the deductions are allowed for the period of rental. Bear in mind  too that the notional rental income tax is charged on any unrented part of a year, or a whole year if no rental income at all is received, and this declaration is submitted annually. Non-resident owners also have to prove they are fiscally resident outside of Spain, so will need to get an annual certificate of fiscal residence from the Inland Revenue or other national tax department.


Q: Could you please advise me where I can download the modelo 210 declaracion ordinaria for impuesto sobre la renta de no residentes?

A: It’s HERE.


Q: Just within 4 years of buying my property I received a notice from the tax office saying that their valuation was more then stated in the escritura and that I had to pay the purchase tax on the difference between the two prices. I complained about the valuation and the time they had taken to ask for their tax, but they replied that the law allows them up to 4 years to notify and charge you interest on the delay. What else can be done about this?

A: This happens all too frequently when prices are far below what would be expected, and the tax office is correct to say that they have four years to demand a “top-up” sales tax. The problem has arisen, though, because of abuse in the past on the part of those directly involved with property transactions. “Black money” has traditionally been a standard part of such transactions and everyone, even notaries, knew it was happening. The tax authorities’ only recourse was to take an independent view of the transaction and “assess to tax” any property for which they did not believe the price noted in the escritura. The problem is becoming quite serious now that prices are falling genuinely here, with people paying sometimes just 50% of a “tax value”. What will happen, for example, to all those properties bought as repossessions from the banks? These are sometimes at knockdown prices, abusive in several other senses, of course, but there could well be a serious tax bill waiting up to four years down the line for anyone who buys property far below what the tax office will accept as the tax value. As to what can be done about it – nothing, I’m afraid, as far as I know.


Q: Please can you tell me what a Plusvalia is and why Solicitor says it must be paid by the Vendor and what it is based on?

A: Please have a read HERE  where I’ve explained it.


Q: We have been advised that we should arrange to transfer the ownership of our apartment into a UK Company to avoid substantial inheritance tax should anything happen to either of us, can you advise us on the above issues please?

A: I have to advise against it in the strongest conceivable terms. Unless the company is already trading in its own right, the scheme runs a clear and significant risk of being considered fiscal fraud by the Spanish tax authorities, and that is a very very serious issue indeed. There are occasions when such a transfer into a company can work, but very often it is not to the advantage of anyone. Please read what I wrote HERE and seriously consider an alternative solution to the inevitable inheritance tax bill.



Q:  Can I get a valuation of an apartment I am considering buying to submit to the tax people BEFORE I sign anything? If so, who gives me this valuation? and is this something my solicitor would do as part of his searches etc.

A:  Yes, you can get a valuation up front, and it’s a good idea if someone is in some doubt about whether the tax office will accept the escritura price. It can take up to a couple of months to get, but once it is given, the Hacienda has to stick with the value. It’s not an automatic part of a search, no, but it’s something I or any conveyancer, including an abogado, would do if specifically requested. You don’t submit it “to” the tax people, though, you get it “from” the tax people, the office in the Zentral Centre in Playa de las Américas … and keep it as a record of the fiscal value of the property so that the tax is known beforehand, and cannot be surcharged later.



Q:  We are considering letting out our residential apartment for three months. How can I find out what we are required to have or provide – things like complaints book (what form should this take?), fire extinguisher, smoke alarm etc?

A:  You don’t need those things. A fire extinguisher and smoke alarm are a good idea of course, but not legal requirements. Complaints books are for commercial lets so won’t apply to you (and would only apply to the sole agent anyway if you had a tourist property). You just need a contract. For your own security, please read my “Renting a property” page in the Your Rights tab (direct link HERE) before committing yourself to anything.


Q: Is there a list of residential property areas to assist buyers?

A:  There’s not a list (that I’m aware of) of residential property, but have a look at my links page and you’ll find links to official resources for touristically licensed properties. To a considerable extent they’re exhaustive, so it will be a very good bet that if you can’t find a complex in either of those sites, it’s residential.



Q: How are hipotecas (mortgages) registered? Is it registered against the Referencia Catastral of the property?

A: A mortgage is registered in the land registry and shows up as a charge on the property in any conveyance or search.


Q:  I’ve been told it’s compulsory to have life and buildings insurances with my mortgages. Is this correct?

A: It is compulsory to have buildings insurance with a mortgage under all circumstances, but despite what the banks frequently say, life insurance is not compulsory unless it is written into the terms of the mortgage document itself. Any policy you have for life insurance is likely to be very evasive about how to cancel. Most, though, have a clause somewhere allowing that the policy will lapse “if you cease payments”. Anyone with life insurance on a mortgage should also note that in the sad event that this becomes payable, it will come off the mortgage amount, not be paid as a cash lump to the insured.


Q: I am a 50% owner of a property which is mortgaged, but the mortgage is in the name of my co-owner. What happens if he stops paying?

A: The property can be repossessed and the bank would then go after your co-owner for any deficit after the property had been auctioned. The bank could not chase you for any subsequent debt, but you would evidently have lost the property.



Q: What are the costs involved in selling our property in Tenerife?

A: Please have a look at the Notarial System & Costs page HERE: as you will see, as vendors you will be liable for plusvalía. Please also look at the Capital Gains & Inheritance Taxes Page HERE for an explanation of the capital gains tax payable, and the retention in lieu made for non-resident vendors. If you are using an estate agent, then there will be commission involved if they find you a buyer – this is normally 5% of the sale price but might be more or less depending on the particular agent.


Q: I am thinking of putting a for sale sign outside my house. I have it with a few estate agents. Would estate agents have any problem with this.

A: They shouldn’t – it’s your house, and even an exclusive agreement with an agent wouldn’t preclude you trying to sell privately! If your property is part of a complex, technically you may not put up se vende (or se alquiler) signs, but a blind eye is frequently turned to them. The biggest problem you will find  is that agents will be less likely to bring clients to view, fearing that they will jot down your number and deal directly.


Q: The agent selling our house says we need an energy certificate before they can show our house to clients. Is this true? and who should do this job as the agent said they have there own people.

A: Anyone in the Canaries wishing to organize one of these certificates, or to confirm that someone else is legally able to issue them, should contact the Consejería de Empleo, Industria y Comercio. Dirección General de Industria y Energía, C/ León y Castillo, 200; Edificio Servicios Múltiples III , Planta 4ª; 35071 Las Palmas de Gran Canaria – tel: 928-899-400 . The full details on what is actually required (no, agents don’t need to be in possession of the physical certificates before they do viewings) are HERE.


Q: What happens if you receive a fine, either refuse to pay or don’t have the means to pay and then a charge is levied against the property? Does this just stay there then until such time that the property is sold?

A: Yes, though a fine will attract “legal interest” of around 6% or so, plus possible penalties and costs so will end up being more than the fine levied. A fine charged against a property will show up when the new buyers’ conveyancer carries out a land registry sesarch – it will show up in the same way as any charge on the property, e.g. a mortgage. If a property is never sold but inherited on the death of the owner who was fined, inheritance tax would be payable before the property could be transferred. When it is transferred, it is treated like a sale, indeed the tax payable on a transfer is the same tax as that paid on a sale because a sale is, effectively, a transfer of title. Any fine would be payable at this point, along with interest, and along with transfer and inheritance taxes, before the property could be registered in your heirs’ names.


Q: Can you advise of how long you have between selling and buying a property in Tenerife have you got to reclaim retention tax of 3%?

A: The buyer has one month to pay the 3% retained, and the receipt of the modelo 211 with which it was paid should be passed to the vendor so that s/he can reclaim it. After that, you have up to three months to reclaim it – with modelo 212. I understand that a “late claim” can also be made up to a legal limit of four years, but for this you would need an asesor or accountant to help.

25 Responses to Q&A on owning property in Tenerife

  • I want to buy a property in Tenerife, preferably a apartment in a complex, i wanted to have it as a weekly holiday let for 9 months of the year and the remaining 3 months as a holiday accommodation for myself but i understand that the authorities will fine you.
    Should i look somewere else and will this cause a lot of properties to go onto the market at greatly reduced prices because no income can be gained from them in the rental market.

  • You can do that, but you have to do it within the rules. Owners can do weekly holiday lets, but they need to make sure that their apartment is on a officially designated tourist complex and then let out through the legal onsite sole agent. You might find THIS page of frequently asked questions and their answers helpful.

  • Should have added that you need JAVA installed to be able to access the forms. This means you can’t use Google Chrome. IE is fine.

  • Hi again Janet- our community voted at our last AGM to have an external audit carried out on our Community Finances .
    The Auditor was chosen at the AGM and the audit carried out though there was some friction between the Auditor, President and Administrator over the scope of the audit .
    The audit has now been completed and also translated officially and in the President´s hands .
    The President is only allowing owners to see it in his apartment and not allowing individual owners to have a copy (the community paid via a derrama for it ! ).
    He is now stating that ,under Spanish law , it is illegal to have an external audit on community finances – surely this is a lie ?
    Do we owners have a right to a copy of the audit or at least to have it published fully on our private community website ?
    We have difficulty in removing the President as he holds a majority of Proxy votes for owners that illegally rent out their apartments through him – we do not have a touristic Licence or a sole agent .

  • Hi John, you need legal advice on this, I’m afraid. My own opinion, which I’m not claiming is more than an opinion, is that although the president is being very difficult, he is within his legal rights to insist that the document is viewed in one place, may be not be removed, nor copied. You could try asking the auditor direct – if there has been friction it’s possible they’ll give you your own copy. As to it being “illegal” to hold an audit, I don’t think so!

  • Thanks once again for your speedy reply – yes ,the President has been fighting tooth and nail against having an external audit (our first in over 20 years ).
    Now he is claiming it was illegal to have an external audit and is holding onto both the original Spanish and English translation .
    I have seen copies of external audits from other complexes which have been done without any problem -he is certainly making it very awkward !
    Hopefully enough owners will kick up a fuss or we have wasted €4k !

  • Dear Janet, first of all thank you for such an informative website. Your work is very valuable.

    I will appreciate it very much if you could provide your expertise with my question about an agricultural land, which I am planing to buy in Fuerteventura.
    1) would I have to pay the same taxes as with case of apartments? (I mean rental tax). Also, if I build a farm or set any other business, would I have to pay 24.75% of income tax (I am not a resident) or this is not related and I can pay an income tax in the country where I am a resident. In general, if I am not mistaken, the current income tax rate is 52%.
    I will appreciate it very much if you could clarify what taxes will I pay in this situation.

  • Thank you for your kind comments, Dmitry, but I am afraid that in this case I cannot help and must refer you to experts. For anything and everything to do with agricultural land you need a specialist and qualified lawyer, and s/he will be able to advise as to what it is possible to do with the land – in particular whether you would be allowed to build or run a business from it. As to tax, as I always say, you need to seek advice and information from those who deal with tax issues regularly, whether a local asesor, or accountant, or tax adviser: they will be able to clarify your tax residence status too.

  • Dear Janet, last week I tried to buy a property, after we agree the price I flew to the island. On my arrival the seller informed me that the declared sale price must be 6 times less than an actual price, so he would not pay 27% of taxes but move them to me if I ever decide to sell it for the actual price. Surely, this is nonsense to me …. as I am not willing to play with the law and pay somebody else taxes. The easiest way is not to buy such property, however I like it and I would like to buy it. I will appreciate it very much if you could handle few more questions:
    1) the owner wants to fly to my place and collect good amount of cash. My understanding is that moment of the sale should be in my country and this is why he should bring solicitor or notary with him. I believe that they do not have any legal power in some other country. Also for them such trip might have some consequences if policy will ever decide to check such deal. So, I believe that he will not find such solicitor or notary who would support such suspicious transaction.
    2) From my side I want to pay taxes from the actual amount. And this is his business if he wants to hide something. Could you tell me please if this possible?
    3) As he is completely sure that what he is offering is not crime, we agreed that he will sign a letter where he accepts all responsibility for this deal. Could you tell me please how to make this letter legal, what it should contain and if it will have a real power?
    4) As an option I think to make a contract with him, according to it I will rent the land and he will be obliged to sell it only to me for the remaining price (rental payments will be deducted from the actual land cost). I believe that “legally” we can reduce the final price and this is his business if he will not pay taxes on rental income. Could you tell me please if this is possible and if there are any risks with such agreement and what needs to be taken into account to reduce or avoid these risks?

    Thank you,

  • First, the days of “black money” and “underdeclaration” have long gone, at least if buyers and sellers wish to avoid potential charges of outright fraud. Thanks to anti-tax-evasion and anti-money-laundering legislation, notaries must now see and record the provenance of every cent paid for a property. Secondly, any Spanish purchase is only legal in Spain if it takes place in Spain, and is signed in front of a notary. Thirdly, the tax authorities are far more assiduous now about assessing their own values to properties, and have up to four years to demand what they consider should have been payable on the amount they think appropriate, if they consider the declared amount too little. Finally, if you are considering any other type of transaction, or a purchase with unusual aspects, then you need the advice of a qualified lawyer, not me.

  • Dmitry, seriously, find another property. Though not recommended, there are still some sales where a small amount of cash is handed over, but the amount requested here is really excessive. And as regards paying him rent, you would be legally obliged to retain 21% each month to pay over to the Tax Authorities. There does not appear to be any solution that will satisfy this owner and also give you value.

  • Janet,
    I have read in a book in 2004 that a person over 65 resident and living in house for three years is except from capital gains tax.
    A friend told me recently that a financial adviser had told them that this was wrong and that they must pay capital gains tax. Can you tell me which one is correct?

  • Please read my page on capital gains tax HERE. As I say, “Fiscal residents over 65 who are selling a main home in which they’ve lived for more than three years are exempt from CGT without the requirement to reinvest.” It’s never so black and white as people think, and it’s not just a case of being over 65 and living somewhere for three years: the person must be both legally and fiscally resident, and have the property as a main home. As always, though, with tax issues, speak to a qualified adviser. You can contact Blevins Franks through links on this website – just put “Blevins Franks” in the search box above.

  • hi my mother and farther own an apartment in tenerife .with no mortgage my mother has died but my dad still live there but has run out of money and is 78 can i get a mortgage on the property in his or my name and if so were from many thanks Alan Howard

  • Theoretically it’s possible that a bank will consider an equity release loan under these circumstances, but in reality, they are lending very little at present. The best I can suggest is to speak to banks your parents used here, and maybe consider trying to raise money in the UK as well.

  • Hi Alan, I do still advise on mortgages across Spain although 95% of my client base now buy in cash. Banks have loosened their purse strings somewhat this year and there are a lot of new products available for buyers. I have a list of mortgages with their qualifying criteria as long as your arm and the banks we are working with do have mandates for shifting X amount of money each quarter.

    However, equity release is a still a very niche product and availability is slim to none, there is very little appetite from the banks to provide these products – so much so that I actually removed it as an option on our enquiry forms.

    Sorry it it not more positive news.

  • Dear Janet,

    I wonder if you could help me regarding the registration process for apartments in Tenerife. We have been told that this has to be done in Madrid if one is not a resident of Tenerife and, if done by post, can take up to 3 years! Could you possibly tell me if this is usually the case and if there is any way to speed it up?

    Also, I have a friend who has a time-share apartment on the island but cannot access it due rogue sellers.As she has all the documentation, I wondered if there was a Spanish website where she could check to see if she really is an owner of this property.

    Very many thanks in advance,

    Kind regards,


  • Do you mean registration of property ownership? If so, it is done here in Tenerife with a local land registry first and foremost – and this is done simply and straightforwardly in two stages – initially via telematic notification from the notary on the day of signing and secondly by the owner or their representative going to the land registry with the new title deeds within just a month or so of taking ownership. “Residence” in Tenerife, or Spain even, is irrelevant to this procedure! As to timeshare, I’m afraid that I don’t profess any expertise and cannot advise – but as far as I understand it, one never actually “owns” a property with timeshare, just a period in which one has the right to use it.

  • Janet,

    You raise an interesting point regarding timeshare ‘ownership’, I get talking to a number of timeshare ‘owners’ who tell me about ‘their property’, ‘apartment ownership’ and ‘buying’ the timeshare.

    My understanding is the same as yours and I’m never quite sure if they realise, as you say, they own nothing apart from the right to stay in the apartment.

  • Hi
    I have been informed by some estates agents that the banks deliberately under value properties in order to reduce the risk of negative equaty in a property down turn. Is this advice correct ?

    If a property was valued at 20% of the selling price by the banks would it be prudent to move on with the purchase on the basis the banks valuation is lower as explained

  • I’m not privy to bank policy in this respect, so am guessing as much as estate agents are! I understand, however, that the banks have been required by the Bank of Spain to offload their property portfolios, so I think any undervaluations are an attempt to get rid of properties they’ve been landed with, and which a low price helps to achieve. Anyone who buys a cheap property, however, is liable to the Hacienda making its own “valuation” and reassessing purchase tax on that basis. Bear in mind, however, that it’s a question of 6.5% of the difference in valuation – not a huge sum, and where a bargain has already been acquired. It could be thought that such a property remained a good bargain …

  • Hi Janet. Firstly let me thank you for providing such invaluable knowledge on owning a property in Spain.
    My wife and I are considering a purchase in Tenerife during the next 12 months or so, to be used by us for up to 6 months per year, maybe short periods of holiday rentals (6-8 weeks per year to cover some costs) and also free access to family members during other times of the year. Whilst I have a reasonable understanding of notional and declarable rental income, I am unsure how the authorities would assess ‘family’ usage, as there would be no rental income (maybe a contribution to utilities only) yet the property would be occupied. I understand that utility bills / usage is assessed by local authorities to assess occupation. How would I declare this? Also, will estate agents know whether a complex is categorised as residential or holiday homes?
    Once again thanks for your help

  • It is you who would asesss family usage, and declare rental income (bear in mind the legal side of this, where you can only let out on a tourist complex and then through the sole agent – as the law stands right now), and then as a non-resident pay notional income tax on those periods when there is no rental income to declare. For your purposes, any private usage will not result in declarable income, private usage being understood as your own use or personal guests. I would strongly recommend that you have a financial adviser here to help in submitting these returns, even though some non-resident owners do them themselves. Yes, estate agents should know if a complex is residential or touristic, but I would stress the importance of a completely independent conveyance regardless of any expertise, assistance or contacts provided by whichever agent you buy through. No agent of any integrity will dispute the value of such impartial independent help.

  • Hi, could you please advise on procedure/price of converting agrocultural plot into regulated? Ie. if I buy a agrocultural plot, is it doable to convert a part and build a house on it? I know it is possible in some cases in few countries. Thanks in advance.

  • You will need to check firstly with the ayuntamiento covering the area concerned, and then consult a lawyer and/or architect about the specific plot. There is no one answer to this.

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Janet Anscombe
Tenerife News
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