Buying a property in Tenerife: taxes, holiday-let rules and checks

Buying a property in Tenerife: what is different from mainland Spain

The legal steps for buying a property in Tenerife are the same as anywhere in Spain: NIE, bank account, legal checks, an arras contract, completion at the notary, then tax and registration. Our step-by-step guide to buying property in Spain covers them in full. What changes on the island is the tax system, the holiday-rental law and the planning status of many buildings. Those three points decide whether a purchase makes sense, so check them before you fall for a sea view.

Tenerife property taxes

Resale homes: 6.5% ITP

When you buy from a private seller you pay the impuesto sobre transmisiones patrimoniales (ITP) to the Agencia Tributaria Canaria. The general rate for 2026 is 6.5%, lower than Andalucía (7%), Valencia (9%) or Catalonia (from 10%). Only Madrid, at 6%, is lower among the regions under the common system. The Canary Islands have lower rates for some main-home buyers, such as buyers under 35 or large families, but they depend on price caps and personal conditions. A non-resident buying a holiday home should budget for the full 6.5%.

Worked example: a resale apartment in Costa Adeje at €300,000 means €19,500 in ITP. The same flat in Alicante would carry €27,000 at 9%.

New builds: IGIC instead of IVA

The Canary Islands are outside the EU VAT area. Instead of the 10% IVA charged on mainland new builds, the developer charges IGIC (impuesto general indirecto canario). The general rate is 7%. A 5% rate applies to a buyer's main home up to €150,000 (higher caps for large families) where the buyer owns no other home, and that falls to 3% if the buyer is 35 or under, has a disability of 65% or more, is on a low income or is in certain other groups. Officially protected housing (VPO) sold by its promoter carries 0%. On top of IGIC you pay actos jurídicos documentados (AJD) at 0.75% on the deed, half the 1.5% common on the mainland.

Notary, Land Registry, lawyer and any mortgage costs come on top. See our cost of buying property in Spain guide for those.

The holiday rental law in the Canary Islands (Ley 6/2025)

Many buyers want to let their Tenerife home to tourists when they are not using it. In December 2025 the Canary Islands passed Ley 6/2025, de Ordenación Sostenible del Uso Turístico de Viviendas. It replaces the 2015 decree and makes new holiday-let registrations much harder. The main points for a buyer are:

• The town plan decides. New tourist use of a home is possible only where the municipal planning allows it. Until councils adapt their plans, most new registrations will not be available.
• Housing is reserved for residents. The law keeps most residential floor space for permanent homes: at least 80%, and 90% on the most tourist-heavy islands.
• Ten-year rule. A home in a residential building must be at least 10 years old, counted from first occupation, before it can be used for holiday lets. The minimum is five years on El Hierro, La Gomera and La Palma and in depopulated municipalities.
• Declaration and register. The operator files a declaración responsable with the island council (cabildo) and the home is entered in the tourism register with a number. New declarations last five years and can be renewed if the home still qualifies.
• Existing licences. Homes registered under the 2015 decree can carry on for five years from the law's entry into force. An owner who also holds the registration may apply, within those five years, for a declaration of consolidated tourist use.

Tourist-zoned apartments in the south

Much of the property in Costa Adeje, Playa de las Américas and Los Cristianos was built on land zoned for tourist use. In some complexes, apartments are meant to be run as a single tourist business, and owners can face limits on living there or on letting privately. Before you buy a house in Tenerife's resort areas, your lawyer should check the planning status with the ayuntamiento, the building's registration as a tourist establishment if any, and the community rules. A cheaper price in a tourist complex often reflects these limits.

Also check the usual Spanish points: that extensions, terraces and pools have licences, and that rural (rústico) plots in the north of the island are not affected by building restrictions. Coastal properties can fall within the state coastal law's protection zones.

Checks before you buy property in Tenerife

• Land Registry: a nota simple showing the owner, charges and the registered description.
• Catastro: the referencia catastral, the official area and use, compared with the Registry and with what is on the ground.
• Planning: residential or tourist zoning, and licences for any works.
• Holiday-let status: the tourism register number, who holds it and whether it survives the sale.
• Debts: community fees, IBI and utilities up to date.

You can start with our free property check: enter the address or referencia catastral and we'll reply by email. An independent property lawyer should then do the full checks before you sign the arras contract.

Prices and who is buying

The Colegio de Registradores recorded an average registered price of €3,045 per m² in Santa Cruz de Tenerife province in Q2 2026, up 12.5% on a year earlier. The province covers Tenerife, La Palma, La Gomera and El Hierro, so Tenerife resort areas are typically higher than the average. Across the Canary Islands the average was €3,052 per m². The INE housing price index for the region rose 11.0% in the year to Q2 2026, slightly below the national 12.2%.

Foreign buyers accounted for 32.25% of purchases in the province, one of the highest shares in Spain. Nationally, British buyers were the largest foreign group in the quarter.

After completion

Pay the ITP or AJD to the Agencia Tributaria Canaria within the deadline and register the deed. If you are not resident in Spain you owe non-resident income tax each year on the property, whether or not you let it. UK buyers are non-EU citizens after Brexit: owning a home in Tenerife does not allow you to stay more than 90 days in any 180 without a visa.

Still choosing between the islands and the mainland? Compare taxes, rental rules and prices in our guide to the best places to buy property in Spain.