Millions of tourists visit the Canary Islands every year due to the region’s widespread appeal. Investment properties, holiday homes, and permanent sunny abodes may all benefit from a purchase in this desirable area. The great climate, which seldom falls below 20 degrees Celsius even in the winter months, has earned this region the nickname “the country of everlasting spring.” The average summer temperature is a pleasant 28 degrees Celsius, and the dry heat with low humidity makes it an ideal setting to escape the freezing temperatures of central Europe.
As the biggest of the Canary Islands, Tenerife also serves as its most popular tourist destination. The sceneries here range from sunny palm tree-lined beaches to verdant pine woods to the lunar vistas of the volcanic enclave Las Caadas atop Mount Teide, Spain’s tallest peak. If you spend the day exploring the island, you will see all four seasons in action. In the winter, for instance, you may wake up in one of the island’s numerous sunny resorts, drive through the mist and mists of the island’s pine woods, and then emerge into beautiful blue sky and play in the snow atop Mount Teide before driving back down to the shore to sunbathe some more.
The Canary Islands’ real estate market is consistently strong because it meets the needs of so many different people. From traditional Canarian cottages to modern apartment buildings, country homes, and even luxury villas are all on the table. Spain is home to both sleepy rural communities and bustling beachside resorts. Apartments and villas surround the island’s several high-quality golf courses. Scuba diving, windsurfing, kitesurfing, boat cruises, and even jet skiing are just some of the watersports and activities you may enjoy while visiting Tenerife. Tennis, padel, bowling, hiking, horseback riding, and cycling are just a few of the many outdoor pursuits available. Relax on one of the many sandy beaches, or lounge by the pool.
Due to the island’s strong potential for long-term residential and short-term tourist rentals, many individuals purchase property there as an investment. Make sure the real estate agent you work with provides you with information on the most recent letting legislation if you plan to use the property for rental purposes.
Many people who live in colder climates buy second homes on Tenerife so that they may escape the island’s mild winters during the season. Teneriffeans who prefer to spend the winter in warmer climes are referred to as “swallows,” after the birds that fly south for the winter.
There is relatively little crime to worry about on the Island, other from the kinds of small crimes that may be found elsewhere. No matter the time of day or night, you will feel completely secure in Tenerife. An extremely diverse population from all over the world converges on Tenerife each year.
To get to the Canary Islands from anywhere in Europe requires no more than a couple of hours at most on a plane. The flight time from the United Kingdom to Florida is only about four hours, which is nothing compared to other winter sun locations. Long-distance flights are unnecessary to do this.
Many visitors drive to Tenerife and leave their cars behind since the island is so convenient to reach by boat. Seeing the sights along the trip to Tenerife may be an enjoyable way to pass the time if you take your time.
Following the tips we’ll outline below will help ensure that your purchase of an overseas property is a sound investment, whether you want to use it for yourself or as a long-term financial holding. We’ve worked hard to be as clear and straightforward as possible, but if you have any more inquiries, please get in touch. Our complete contact information is listed on the last page of this buyer’s guide.
How to buy, in a nutshell
As long as you choose an experienced real estate agent and don’t try to go it alone, the actual buying procedure is straightforward. They’ll walk you through the entire purchase, but before you go, make sure you know these things. Having a trustworthy real estate agent and lawyer on your side helps alleviate any anxiety you may be experiencing.
You’ll need a Spanish bank account, an NIE number, and the money to buy a house. We suggest that if you require a mortgage for your Tenerife property, you see a financial counsellor or bank before you begin looking at homes. This will help you determine the maximum price range within which you are comfortable purchasing a home. Stamp duty, legal fees, notary fees, property registry fees, etc., can add an additional 5% to 10% to the purchase price and should be factored into your calculations. Before you commit to a purchase, your agent will provide you with a thorough explanation of all of these factors.
A 10% non-refundable deposit and a private sales agreement with the vendor or their representative are standard first steps; the remainder of the purchase price and the signing of the title deeds (escritura) in front of a notary public and final payments are typically due within 60 days.
Within having your agent or legal representative register the property in your name, you should have an authentic escritura back in your hands after around 30 to 45 days.
As soon as you hire a lawyer, he or she will transfer all of the utility bills from the previous owner to your name and set up a standing order with your bank.
To protect your home and its contents, you should invest in property insurance
While you’re away, it’s a good idea to have a trusted tenant or property management business keep an eye on your house.
Don’t rent out your home without first checking the laws in your area and hiring a reputable property manager. If the building is part of a complex, you may need to check in at the main office of the complex, if they are also responsible for managing the property.
Learn the facts.
It’s important to conduct your research before making any major purchases, but this is especially true when investing in property in a foreign country. Do your homework before making any major purchases.
An essential question to ask yourself is what you plan to use the land for. For what reason are you making this investment? Is this a retirement home, primary residence, or investment property that you want to rent out to generate income? Do you prefer a property in a community with dues and maintenance costs, or a detached home with perhaps no such costs? Do you want to acquire a dilapidated house, fix it up, and then sell it for a profit? To what extent do you expect this investment to last? When you decide to leave, what steps will you take to ensure a smooth departure?
Make sure your representative understands exactly what it is you’re trying to find. All of you will benefit from the time and effort you save by providing this information while they search for the ideal home for you. Clearly articulating your needs will prevent them from wasting time. Going out and seeing a few houses with your realtor can help them understand the market and find you the perfect home.
Before purchasing a home, you should research the neighbourhood thoroughly to ensure it is suitable for your needs, especially if you intend to remain there permanently. The majority of vacation home buyers fall in love with their destination and make an impulsive purchase, only to later regret not purchasing a home farther from the resort’s main drag. Before committing to a purchase, it could be wise to first rent a house for an extended period of time to get a sense of the neighbourhood and see whether it’s a suitable fit for your lifestyle.
Consider the possibility of paying more for service charges and community fees if you want to purchase a home in a complex or community. Gardens, pools, common spaces, elevators, and other amenity upkeep are all examples of what might add up to a hefty maintenance bill. Before making a purchase, it is important to learn how much the monthly maintenance expenses would be.
If you’re planning to buy an investment property to rent out, you should find out in advance whether or not the complex prohibits short-term rentals. To legally rent out your home, you will need to comply with local regulations and all applicable taxes. Always consult your real estate agent for guidance on such matters.
You should think about hiring gardeners, pool maintenance companies, and general maintenance companies in case you ever need them if you buy a detached property, and you should definitely think about hiring a reliable key holder if you plan on being away from the property for an extended period of time.
You will save time while seeing homes if you spend more time studying and determining what you will use the property for. If you have a clear idea of what you want and can communicate that to your realtor, they will be able to save you time by just showing you houses that meet your criteria.
Make sure you’re buying in the suitable location for your needs and that you know exactly why you’re making the purchase. An expensive mistake might be made on the first try.
Make use of a reputable real estate agent
If you hire a skilled real estate agent, buying and selling a home on Tenerife is a straightforward and secure procedure. Many people will have heard stories about “horror” experiences where individuals have acquired property in another country and perhaps lost money, but it’s possible that these people didn’t utilise a competent agent or legal counsel. It’s likely that they’ve done business with someone they met in a pub and trusted since they spoke the same language. Do not make the mistake of purchasing a home in this nation without first consulting a real estate agent and a lawyer. Do not purchase property from a stranger without going through the correct channels.
Find a licensed real estate agent who welcomes walk-in customers and schedule a meeting with them to go through your needs in person. A good real estate agent will take the time to sit down with you and learn about your needs and budget before searching for a home that fits those specifications and can be financed by you through a local bank or mortgage broker. You won’t have to spend as much time preparing for the show thanks to the work they do beforehand. In order to get the aid you need, you must be honest with them and tell them exactly what it is you want. If you don’t give them specifics, they could show you houses that aren’t a good fit.
Choose an agency that has been around for a while and has successfully “ridden through the financial storms.” When the real estate market is booming, many agents open shop, but when times are rough, many go out of business. It’s important to be sure your agent will still be in business in the future if you have any questions or require their assistance. You should inquire as to their level of experience and time in business in the market.
As a result of this, a trustworthy agent will never try to hurry you into making a purchase. If you have any questions or concerns, they will be there to help you through it. In the event that they attempt to exert any kind of pressure on you, all you have to do is withdraw. Hard sell tactics are unnecessary. To put it simply, it is their job to locate the specific home you have in mind. You won’t have to be coaxed into buying something you’re not sure about since you’ll already know if the property is suited for you.
Your agent will be able to assist you with activities like opening bank accounts and applying for NIE numbers (foreign identity numbers), as well as referring you to a competent legal counsel and other resources like furniture stores, cleaning services, and tradespeople. Most brokers will have worked with these customers for years and can attest to their reliability.
If you hire a real estate agent, they will handle the entire transaction from start to finish.
Consult a lawyer
The same as the requirement to hire a legitimate real estate agent. Just like you would at home, you should retain the services of an impartial professional legal counsel to watch out for your best interests during the whole purchasing process. We have no doubt that you would never contemplate purchasing estate in your nation without first consulting with a qualified solicitor. The plain truth is that you should never buy a home in Tenerife without first consulting one.
Visit their office and have a serious conversation with them about the services they provide. Get to know them and get a feel for how they operate at a free initial appointment. Make sure they have a good command of your language to avoid misunderstandings. Your estate agent should be able to suggest a competent solicitor to represent you.
If your agent tells you that you do not need a legal advisor and that they will do all the paperwork for you, you can either insist that you use your own legal advisor or walk away from them and find an agent that uses an external, independent legal advisor that will not be biassed, one that will look after your interests and not the ones of the agent or the vendor. Your best bet is to insist on employing your own legal counsel, even if the realtor you’ve been working with thus far happens to also own the property you’re interested in purchasing. If they dispute this, something is likely incorrect; go elsewhere for a broker.
It is your lawyer’s responsibility to ensure that there are no outstanding loans on the property and that there are no tenants currently living there. They will check that the land registration entry for the property is accurate and that there are no liens or other legal claims against the land. In order to ensure that the utility bills may be transferred to you in a timely manner when you purchase the home, they will verify that they are up to date. On the day of the purchase, they will also deal with the local authorities to ensure that all local taxes have been paid in full.
Never put your signature on anything before seeing a solicitor, and always make sure you understand fully what you are agreeing to.
Please get in touch with us if you need assistance locating a qualified legal counsel. Regardless of whether you decide to make a purchase with us, you can count on our assistance.
How to Apply for an NIE Number
A NIE number, or foreigner’s identity number, is needed to acquire property in Spain. You can do this on your own or with the support of a representative or barrister at the national police station. They will instruct you on how to pay the nominal fee. Providing a copy of your current passport and completing some brief paperwork is required. To obtain an NIE number, you must first pay a nominal fee at a bank before making your way to the national police station. This may take the better part of the morning, so plan accordingly.
To apply for your NIE on your behalf, you often need to grant your agent or legal counsel power of attorney. You might seek their counsel on the issue.
Account at a Spanish Bank
To facilitate the transfer of funds for the purchase and the establishment of standing orders for utility bills like water, garbage, sewage, and electric, as well as items like property insurance and local property fees, you will need to open a Spanish bank account beforehand. An attorney or broker can advise you on the best bank to work with during this procedure. We advise you to work with a financial institution that has a branch in close proximity to the home you intend to purchase. The availability of internet banking does not change the fact that we do not suggest using one, especially for a mortgage. Dealing with issues just via phone calls or electronic mail might be exhausting. Your decision on this matter is entirely up to you.
To start an account, you’ll need to show proof of identity (such as a passport or driver’s licence) and legal status (such as a utility bill or bank statement) before they’ll accept any money from you. To find out the specifics, you need consult with the bank’s personnel. Obviously, it would be beneficial if you can locate a financial institution whose employees understand your language. The ability to conduct online transactions, if necessary, is facilitated by a user-friendly and linguistically appropriate online banking system.
It goes without saying that you should always have enough money in your Spanish bank account to pay your payments on time. You definitely don’t want the power or water turned off to your house while you’re not home. Reconnecting them might be a hassle and expensive. Keep on top of your accounts since the local authorities and taxes will charge you compounded interest if you miss paying them on time.
Mortgages
Get mortgage counsel before you start looking for a home if you think you’ll need a mortgage to finance the purchase. When you find a suitable house, closing the purchase will go more quickly since you will already have a good idea of how much money the bank will lend you. The bank will do a valuation nonetheless, and they will likely base their loan percentage off of whichever number is lowest between the sales price and the valuation. A mortgage of up to 80% of the lower of the two figures may be obtained from a bank if you are a resident, and up to 60% of the lower of the two figures may be obtained from a bank if you are not a resident. (If you discover a home for €125,000, but the bank values it at only €110,000, the bank may offer you a loan based on the lower value, but if the appraisal is for €140,000, the bank may offer you a loan based on the higher value.) Note that these are just examples and that you should verify everything with your bank.
You might lose the house you want to buy if you start house hunting before you have a mortgage in place to secure the purchase. The fast-paced nature of the market means that many sellers cannot afford to wait for a buyer to submit a mortgage application. Talk to your real estate agent, bank, or financial adviser and set the wheels in action before you start looking for a house so that you may negotiate a higher sale price after you find the one you want.
Applying for a mortgage with a bank in your home country might simplify the procedure, as the institution already has a thorough understanding of your financial history. It’s likely that you’ll be able to make the monthly payments in your local currency, which will make it easier on your budget and may even save you money compared to making frequent international wire transfers.
It’s a good idea to ask your bank about early cancellation costs in case you decide to pay off your mortgage early.
For more on whether or not you may choose between fixed and variable interest rates, go to your bank. You may find it helpful to lock in a low interest rate while it’s still low.
*Note that we are not registered as financial advisers. Disclaimer: This guide contains our own thoughts. They are not intended to be used as such. If you need help with your finances or your legal situation, you should consult with experts.
Making a down payment
When you’ve finally discovered the home of your dreams, you’ll need to put down a deposit of at least 10% of the purchase price to secure the transaction. If you’re working with an estate agent or solicitor, these funds should be kept in their client accounts. Your representatives will also discuss the option of having it stored in a public notary’s office for a fee. A non-refundable deposit means you lose the money if you decide to back out of a sale before it’s completed.
Although some sellers may insist on having the payment wired directly to their bank account, we advise against doing so. If the seller later backs out of the contract, you are legally entitled to a refund of the deposit, but getting it back from them might prove challenging. If the seller cancels the deal, you should be entitled to a refund of your deposit. If you’ve paid a deposit of €10,000, for instance, the sellers will return that amount plus another €10,000. Your agent and legal counsel can fill you in on the specifics of taking legal action in this situation.
It is recommended that the transfer for the deposit and the cash for the balance of the sale be made from your own bank account, rather than a third party bank account holder, so that you can verify where the money has come from when signing the escritura in front of the notary public.
In-House Purchase Agreements
After making the down payment, you’ll be asked to sign a confidential sales contract that specifies the terms and circumstances of the transaction. This is something that will be prepared for you to sign by your agent or attorney and will be finalised between you and the seller or their representative. If a representative is operating on their behalf, it is imperative that your agent or legal counsel confirm that the representative has the necessary authority to sign on their behalf.
The price, the maximum amount of time allowed for signing, and the responsibilities of each party will all be spelt out in detail in the contract. The seller must ensure that the property is sold to you free and clear of any debts and occupants, and the buyer is responsible for all associated expenditures. Typically, a sales agreement will be finalised 60 days after the deposit is paid, however this timeline is negotiable between the buyer and the seller. Typically, contracts include a grace period of fifteen days built into them in case there are any last-minute issues that need to be ironed out in order to close the deal. The property will be transferred to you and any outstanding payments will be made when you sign the title documents (Escritura) in front of a public notary on or before the termination date specified in the agreement.
You should anticipate a delay in receiving the money from an international transfer into your Spanish bank account. It’s not a good idea to wait until the last minute to arrange for the transfer of cash; doing so might cause you to miss the closing date.
Legally binding document signing (escritura)
One must verify the existence of an escritura and the property’s registration at the land registry office before purchasing real estate. Your representative and legal counsel will investigate all of these claims.
You’ll go to the notary’s office on the day of the closing to sign the paperwork transferring ownership of the property to you. After this point, you will receive the keys to your new home and be responsible for making the final payment to the sellers.
Banker’s draughts and bank transfers are acceptable forms of payment since they allow you to track the origin of the funds used in the transaction. It is common practise to send a portion of the purchase price immediately to the seller’s mortgage lender in order to satisfy any outstanding mortgages on the property. If this is the case, your solicitor should see to it that the mortgage cancellation is recorded with the land registration at the vendor’s expense. Money you pay to suppliers may be withheld to cover any obligations they may owe. Your agent and adviser will help clear these things up if you have any questions.
You should bring your agent and adviser with you, and the escritura should be translated into a language you can comprehend. Please remember to bring your passports and NIE numbers. Before allowing you to sign, the notary will make sure you are who you say you are and that the information on the title documents is accurate. They’re there to make sure everything goes off without a hitch.
Your lawyer will register the escritura in your name at the local land registration after you have signed it. A completed original and all associated bills will be provided to you within 30–45 days. However, on the day of the signing, you are permitted to request a photocopy (copia simple) of the title documents. This is standard operating process and often takes no more than 15 minutes following the signature.
Indirect expenses, such as those incurred when
It’s important to remember that there are expenses beyond the asking price when purchasing real estate in Tenerife. These fees average out to around 10% of the purchase price, albeit if the price of the property goes up, the percentage goes down slightly owing to the fixed expenses.
Stamp duty on property purchases is currently 6.5%, a considerable increase from the time this agreement was drafted. You’ll also have to shell out cash for the services of a notary public, a land registry officer, and a solicitor. You’ll need to have the cash on hand to make all these payments on the day of the escritura signing.
Get a detailed cost estimate from your agent and barrister before finalising the deal to avoid any unpleasant financial surprises later on.
In the event that you make a profit from the sale of your property, you can deduct the purchase price from the sale price by referring to the receipts for all the money you spent on the purchase. This is something that your financial advisor will tell you about.
Making a Spanish will
The majority of people don’t enjoy talking about death yet it is something that happens to all of us and there is no use in attempting to escape this crucial matter or pushing it to the side. If you are a property owner, you need to create your Spanish will as quickly as possible to safeguard your estate in Spain.
In certain countries you may actually change your existing will to incorporate your land in Spain but we feel it is better to additionally have a Spanish will. It may be signed at the notaries office, even on the day you make the purchase if you choose and does not cost a lot of money.
Make sure that you talk to your agent and legal adviser about it so that they can assist you get it done.
We recommend that you speak to your financial advisor before making this decision but please take in mind that they need to understand how the legislation works in Spain. It would be good asking them to communicate directly to your legal counsel in Spain first so that they are aware of the issue and can thus advise you better.
