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. Below are some of the questions I’m most often asked. If your question hasn’t been answered below, please just ask in the comment box at the bottom of the page. Just click on any question to expand it to show the answer.

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









Costs & Taxes



























This article has 37 Comments

  1. Can you please advise the average rate of commission I should expect to pay an agent for selling my property in Tenerife

  2. We have sold our apartment and i have notified the broker i wish to cancel the contents policy of insurance. In addition to signing a cancellation form they also insist i have to provide a copy of the contraventa and copy of my passport to confirm my signature. Isnt this over the top – excessive. Is this really necessary. Ive been insured with them for several years and why doesnt the fact they will witness my signature in their office when i sign the cancellarion form sufficient for them.

  3. Yes it’s over the top! All the law requires is that you give them two months’ notice, but it is within reason that you prove your entitlement to make that cancellation. As to proof of sale, however, they have absolutely no right to that … not least because one’s not required to sell a property before being allowed to cancel an insurance policy! Give notice, provide a copy of passport, and cancel the direct debit two months later. And as with any commercial service, if there is a problem, demand the complaints book and fill out a form, and go to the consumer association if they refuse to give you the book …

  4. Wouls you say that property prices are beginning to rise in Canaries in 2016 or has weak pound affected the market?

  5. The Pound has only just slipped and it’s too early, in my opinion, for that to have any real effect on prices here. All indications right now are that there has been a 3-5% or so rise in prices over the past year. As I’ve said previously, the market appeared to bottom out last year, and although we could rumble along on the bottom for a while with any rises being very slow in coming, they do seem to have started.

  6. i have sold my apartment and 10% deposit has been paid. How is the balance on completion transferred to u.k. I am being paid in Euros.?

  7. It depends on what you have agreed. Normally the balance is paid on completion by bank draft handed over at the notary. You then pay it into your account here and arrange a transfer via the bank or money exchanges. You can be paid in other ways, however, with a Sterling draft or electronic transfer. The main thing is to have a firm understanding, and for this to be agreed and, ideally, written in a sale contract.

  8. Can you elaborate on the exact method how to calculate the income taxes on either an apartment that is let and if it is not let. Following above information I understood the following for a reference property of 100K.
    1. If let for 500 EURO/month the tax for 2015 is 20% on the monthly income which results in 100 EURO times 12 is 1200 EURO to be payed.
    Remark: I understood that you may reduce the rental fee with the water, electricity and basura cost if it is the owner who pays those costs instead of the tenant. if those costs are for example 100 EURO/month it would result in 500 EURO – 100 EURO = 400 EURO/month * 20% = 80 EURO times 12 is 800 EURO instead of 1200 EURO. Is this correct and or can you reduce this with other taxes you need to pay?
    2. If the same property is not let I understood in the past that the tax is equal to the valor cadastral which seems not te be correct and needs to be replaced by the rule of 1,1% of the 100K = 1100 EURO. Is this than the annual fee? And may you in this case also reduce this number by the costs like water, electricity and basura and or others?
    3. If the property would be let by an agency would that change the situation and if so in what way?

  9. No, I’m sorry, but as I repeatedly say, if you need tax advice, you need to seek it from a qualified tax specialist.

  10. Bart, I can make a few comments from personal experience, but as Janet stresses, you really need to talk to a professional for confirmation.
    I am guessing you are non-resident from question 2. Whether you are or not, in regard to your first question (and also in part the last question), you can also deduct general expenses regarding the property from the gross rental – insurance, community fees, IBI (local rates), basura, repairs to the property, mortgage interest paid, depreciation (3% of the catastral value, I believe) and if an agent is handling the rental, you will also be able to deduct his fees and/or any commission he charges you before you get a figure on which tax is then charged.
    So on a rental of 500 a month, you will be paying considerably less than 20% of the total in tax. And yes, electricity & water costs are deductible if you are paying them and not being refunded by the tenant. If you are a Spanish tax resident, then there is a further (generous) deduction of 60% if it is a long term rental for private accommodation.

  11. Hi
    We had a mortgage with our bank and we have now paid in full. What happens to the deeds, we do not have them and have no idea where they are! Do we or should we have anything?

  12. You need the a certificate and the escritura of cancellation from the bank, and you take this to your local land registry. They will then amend the register to show that the charge on the property has been lifted. It will cost around €500. In the first instance, you need to speak to the bank where you had the mortgage.

  13. Hi, we bought a finca and moved here last November; we registered at the town hall on the empadronamiento, and for basura, have registered with the water board, still trying to fathom how the water tank for the finca works and is paid for but we’re on with that! We bought a new car and it’s taxed till May I think. My questions – I believe there are rates to pay as well – do we need to do anything else or will we just be sent a bill when they are due? Also, does a bill come for car tax or do we have to make the first move? So far here in La Orotava we have found everyone at the Town Hall extremely helpful and we want to make sure we stay on good terms!

  14. You need to take your escritura to the ayuntamiento and confirm whether the property’s change of ownership has been registered with the council for IBI (rates) purposes … this is different to you personally being registered on the padron because you could be tenants. It is possible that the previous owners did this, but unlikely. IBIs are assessed per calendar year, but payable mid year … different ayuntamientos have different fiscal calendars. When you’re there you can confirm about your car … yes, normally they send out a bill but they have to be informed of your details first; again, it is an annual Jan-Dec assessment but payable mid year.

  15. thanks for the prompt reply Janet, will go to the town hall on Monday and make sure.

  16. My wife and my self want to purchase a property in tenerife jointly , my wife cannot be at the signing ,can we sign seperatly

  17. Me and my family are planning on Buying a a home in Tenerife , we will eventually be moving to live out there . Where would be the best place to buy for value for money. Thanks

  18. well that’s a matter of opinion, because one one person’s idea of value for money might be different to someone else’s. It also depends too much on personal wishes and requirements. Anyone moving here who doesn’t know the island very well should rent first and get to know places before they buy, so that they can use their own personal experiences to help them judge what is best for them in their own particular circumstances. THIS page might help with ideas for areas to investigate.

  19. Can anyone advise please if you have assets in England over 50,000 and the form 720 needs to be presented to hacienda every year by 31st March , what happens if I have missed the cut off date , can I go to hacienda and explain that I wasn’t informed by my gestor as I am recently widowed and am learning all these thing’s?

  20. I recommend that you get in touch with Paul Montague for qualified advice on this. Please see HERE for previous posts on the subject.

  21. Selling a property here being paid by bankers draft much commission will I pay to put into my Spanish bank…thankyou

  22. It depends on your bank, and their answer depends to some extent on the bank the cheque is drawn on. You will need to ask your particular branch, I’m afraid.

  23. Hi
    with regard to the plusvalia tax surely now a vendor could refuse to pay this as the courts have already ruled that it it is illegal in cases where the value of the property has fallen from the time of the initial purchase.

  24. There have been a few rulings, I think, but none in the Canaries … but no, a vendor couldn’t refuse to pay without being prepared for the Ayuntamiento to take action against them for non-payment. Each case would need to be the subject of a separate legal challenge by a vendor, I would think, at least until the Constitutional Court has ruled on the issue as a generality (and my understanding is that they are considering the matter but have not yet ruled.).

    Certainly too a fiscal valuation would be required, and if the vendor is a non-resident, indeed, most often a retention will be taken to ensure the bill is covered to stop it becoming a bill that the new owners are held responsible for.

  25. Hello Janet and everybody! About IRNR, for 2015, it is reduced to 20% from the beginning of 2015 (till 11th of July) and further (from the 12th of July 2015 till 31 th of December 2015) lowered to 19,5%.
    Does that mean two different “‘modelo120”, correct? Thanks in advance and congratulations for your site!

  26. I’m sorry I don’t know. As I say repeatedly, please direct any specific questions about tax and tax returns to qualified professionals. Please see the “Financial” section of the Resources page (main tab above) for links to Diana McGowan and Paul Montague, both of whom I can recommend for tax issues.

  27. Where is the best place online to find people are renting their property for 2 – 3 months over the summer period please?


  28. There are links on the Resources page (main tabs above) to official tourism sites for legal holiday acommodation, but for very short-term private lets (i.e. under three months, and so which are deemed touristic and are not legal here) your best bet is to seek owners who are letting direct, usually through Facebook groups … just put Tenerife apartment rental in the search box. Bear in mind that over the summer months, most owners will want one or two week holiday lets, being the most profitabale, so you might struggle somewhat.

  29. my daughter wants to buy our apartment in spain but pay in pounds,my Spanish lawer said we have to prove payment has been made any ideas thanks.

  30. It is quite normal, and absolutely fine, to pay in Sterling outside of Spain, but for money-laundering reasons, EU law require transactions to be provable. Your UK bank will need to provide proof of the payment, both the account the money leaves and the account it arrives in, and this proof will need to be included in the escritura your daughter signs at notary.

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