You’ve found the property. The viewing went well, the location feels right, and you’re ready to make it happen. But between the initial excitement and actually owning a place in Tenerife, there’s a conveyancing process that involves Spanish law, Canarian tax rules, and a timeline that doesn’t quite match what you’re used to back home.
Taxes when buying a prperty in Tenerife: ITP and IGIC
The Canary Islands operate under a special tax regime, separate from mainland Spain. This affects how much tax you pay and when.
If you’re buying a resale property (segunda mano), you pay ITP (Impuesto de Transmisiones Patrimoniales) at 6.5% of the declared sale price or cadastral value, whichever is higher.
If you’re buying a new build or off-plan property, you pay IGIC (Canary Islands equivalent of VAT) at 6.5%, plus AJD (stamp duty) which typically runs between 1% and 1.5% depending on the property value and mortgage amount.
| Property Type | Tax Applied | Rate |
| Resale | ITP | 6.5% |
| New Build | IGIC + AJD | 6.5% +1-1.5% |
Breakdown of purchase costs
The sale price is only part of what you’ll spend. Budget for an additional 10-12% on top of the purchase price to cover taxes, legal fees, and administrative costs.
Here’s what that looks like in practice:
Purchase price: €200.000
- Transfer tax (ITP): €13.000
- Notary fees: €800-€1.000
- Land Registry: €500-€700
- Legal fees (independent lawyer): €1.200-€3.000 + VAT
- NIE application: €10 (plus gestoría fees if using one)
- Bank account opening: Usually free
- Admin/gestoría services: €300-€500 (if separate from lawyer)
Total outlay: €220.000-€224.000
These aren’t optional extras you can skip. They’re legal requirements built into the system, and you’ll need funds in place before completion.
Process of buying a property in Tenerife
The process from the time an offer is made until it is completed usually takes between 6 and 8 weeks. However, it depends on each case and how these issues are resolved.
- Apply for NIE number and open Spanish bank account (do this before making an offer if possible. It saves 2-4 weeks later)
- Appoint an independent lawyer to handle conveyancing and legal checks.
- Agree on price and pay 10% reservation deposit (non-refundable). Sign contrato de arras
- Your lawyer conducts due diligence (weeks 1-6): Land Registry checks, debt searches, town hall certificates, verification of seller’s legal right to sell
- Transfer purchase funds to your Spanish bank account
- Sign the deed at the notary (week 6-8): pay balance + all taxes/fees, receive keys
- Post-completion: Lawyer registers property in your name (30-45 days), transfer utilities, set up direct debits for IBI and community fees
If you can’t attend the escritura signing in person, you can grant power of attorney to your lawyer (specific to the purchase, prepared by notary or Spanish consulate, costs €100-€200).
Do you really need a lawer for buying your property in Tenerife
Absolutely you do. Estate agents are helpful for finding properties and arranging viewings, but they represent the seller. Even when an agent recommends “their lawyer,” that lawyer’s loyalty may be split between closing the deal and protecting your interests.
An independent Tenerife lawyer works solely for you. Their job is to find problems before you pay for them.
- Verifies the property title at the Land Registry (checking for correct registration, boundaries, and ownership)
- Searches for debts attached to the property (mortgages, IBI arrears, unpaid community fees, utility bills)
- Review and drafts contracts and deed before you sign, ensuring terms are fair and legally sound
- Confirms the property is legally built, has the correct certificates, and complies with planning regulations
- Manages all payments at completion, ensuring taxes are paid and funds go to the right accounts
- Registers the property in your name after signing
The cost will depend on the lawuer but it is typically 1-1.5% of the purchase price plus VAT.
For a €200.000 property, that’s €2.000-€3.000. It’s not an expense, it’s insurance against inheriting a €10.000 debt or discovering the property can’t be legally sold.
UK and international buyers are especially vulnerable without Spanish legal knowledge. The system assumes you understand things like nota simple, certificado de deudas, and the difference between escritura and registered title. Your lawyer translates that into terms you recognise and protects you from what you don’t.
Key aspects of mortgages for non residents
Spanish banks will lend to non-residents, but expect stricter terms than for residents.
You’ll typically get 60-70% LTV (loan-to-value) based on the lower of the purchase price or bank valuation. You’ll need to prove income and employment, and the bank will commission a valuation at your expense (€300-€500).
Costs include an opening fee (around 1% of the loan), notary and registry fees for the mortgage deed, and sometimes mandatory mortgage insurance. Interest rates can be fixed or variable, and most mortgages have early repayment penalties.
Get mortgage approval before making an offer. It speeds up the timeline and strengthens your position when negotiating price.
What should you do after completion
Once you’ve signed and received the keys:
- Wait for registered title deeds (30-45 days)
- Transfer utilities into your name
- Set up direct debits for IBI (annual property tax) and community fees
- Arrange buildings and contents insurance
- Consider making a Spanish will to cover your assets in Spain
If you’re planning to rent the property out, check whether you need a tourist licence, short-term rentals require registration in most areas.
Shoul you need help with the process, feel fre to visit our law firm in Tenerife and we will get in contact.
