Welcome to Your Tenerife Property Buying Guide
We've created this guide to help you understand the main steps involved in buying a property in Tenerife and to give you the confidence to begin your journey.
Or, if you prefer, simply leave it to us.
One phone call is all it takes. From finding the right property and negotiating the best price to arranging your NIE, introducing you to trusted professionals, coordinating the purchase and supporting you after completion, Prime Brokers will take care of every step on your behalf.
Our mission is simple: to make buying your property in Tenerife a safe, transparent and enjoyable experience, so you can focus on the excitement of your new home while we handle the rest.
Every property purchase is unique, but the steps involved are generally the same. By following a clear, structured process, you can avoid unexpected surprises and enjoy a smooth and secure transaction.
Below, we've outlined the key stages of buying a property in Tenerife in the order they typically occur. Each step explains what to expect, who is involved, and how Prime Brokers can assist you along the way.
Let's get started.
1. Define Your Budget
Determine your budget.
Allow an additional 10–12% for taxes and purchase costs.
2. Choose an Experienced Real Estate Agent
Selecting an experienced and reputable real estate agent is one of the most important decisions you will make. A knowledgeable local agent not only helps you find the right property but also guides you through the entire purchasing process and introduces you to trusted professionals.
A good agent can:
• Help define your property search and budget.
• Identify suitable properties that match your requirements.
• Negotiate the purchase price and terms.
• Explain the local property market and buying process.
• Put you in contact with trusted professionals, including:
• Independent lawyers (if you choose to appoint one)
• Architects and interior designers
• Refurbishment and construction teams
• Accountants and tax advisers
• Notaries and property managers
• Local Town Hall (Ayuntamiento) departments where planning or licensing matters need to be verified.
• Confirm exactly what is included in the sale, such as furniture, appliances, fixtures and fittings.
• Ensure that technical equipment and installations are in good working order before completion.
• Coordinate communication between all parties from the initial viewing through to completion and beyond.
3. Obtain Your NIE Number
Your NIE (Número de Identificación de Extranjero) is your Spanish tax identification number and is required to:
• Purchase property.
• Pay taxes.
• Open a Spanish bank account.
• Sign the title deed.
Your real estate agent can guide you through the application process and, if required, help you obtain the NIE , making the process quicker and more convenient.
4. Open a Spanish Bank Account
A Spanish bank account is recommended for:
• Paying the purchase price.
• Paying taxes and fees.
• Setting up direct debits for utilities and community fees.
Your real estate agent can recommend banks familiar with international buyers and assist you with the account opening process.
5. Make an Offer
Once you've found the right property, your real estate agent will help you:
• Negotiate the purchase price on your behalf.
• Agree exactly what is included in the sale, such as furniture, appliances, fixtures and fittings.
• Agree a proposed completion date that suits all parties.
• Ensure any agreed repairs or improvements are documented before completion.
An experienced local agent brings valuable market knowledge and negotiation skills. They understand current property values, recent comparable sales and local market conditions, enabling them to negotiate the best possible price and terms. They can also identify issues that may justify a price reduction - such as refurbishment costs, outdated installations, planning considerations or community matters - helping you make a well-informed and financially advantageous purchase.
6. Legal Due Diligence
Before paying a significant deposit, verify that the property is legally sound.
This should include:
• Confirming ownership at the Land Registry.
• Checking for mortgages, embargoes or other charges.
• Verifying planning permissions and licences.
• Confirming there are no outstanding taxes or utility debts.
• Checking the Energy Performance Certificate.
• Reviewing any community obligations.
These checks may be carried out by your lawyer or by an experienced agent working with the notary and other professionals.
7. Owners Community Checks
If the property forms part of an owners community (Comunidad de Propietarios), it is important to verify:
• That all community fees are fully paid.
• That a certificate confirming there are no outstanding community debts is obtained.
• The community rules and regulations.
• Whether any major works or special assessments have been approved or are planned.
• Whether holiday rentals are permitted, if this is relevant to your intended use of the property.
An experienced real estate agent can liaise directly with the community administrator (Administrador de Fincas) to verify these details, obtain the necessary documentation, and ensure there are no unexpected obligations or restrictions before you proceed with the purchase. This additional level of due diligence can help avoid costly surprises after completion.
8. Anti-Money Laundering (AML) Compliance
Before contracts are signed, buyers must provide:
• Passport
• NIE
• Proof of address
• Evidence of the source of funds
• Supporting bank or financial documentation
Estate agents, banks, lawyers and notaries are legally required to carry out AML checks.
9. Reservation Agreement
Once the legal position is satisfactory:
• Sign the reservation agreement.
• Pay the agreed reservation deposit.
• The property is withdrawn from the market.
Your real estate agent plays a crucial role at this stage by explaining the key clauses, important conditions and practical implications of the reservation agreement, ensuring you fully understand your commitments before signing.
10. Private Purchase Contract
• Sign the purchase contract.
• Pay the 10% deposit (typically).
• Completion usually follows within 30–60 days.
For new-build or off-plan properties, payments are made in stages during construction and should be protected by a bank guarantee or insurance.
11. Completion at the Notary
• Sign the Escritura Pública (Title Deed).
• Pay the remaining balance.
• Receive the keys.
12. Pay Taxes and Fees
Resale Property
• ITP (Property Transfer Tax): 6.5% (Canary Islands)
• New Build
• IGIC: 6.5%
• AJD (Stamp Duty)
• Additional costs include:
• Notary fees
• Land Registry fees
• Legal fees (if applicable)
Important: If the seller is non-resident in Spain, the buyer is generally required to withhold 3% of the purchase price and pay it directly to the Spanish Tax Agency. This amount is credited against the seller's capital gains tax liability.
In some transactions, the Plusvalía Municipal (municipal tax on the increase in the value of the land), which is normally payable by the seller, may also be retained at completion and paid by the Notary or the appointed representative on the seller's behalf. This provides additional reassurance to the buyer that any outstanding tax obligations have been settled, reducing the risk of future claims related to the property.
13. Register the Property
The title deed is submitted to the Land Registry (Registro de la Propiedad), and the property is officially registered in your name, providing legal protection of your ownership.
If you prefer not to handle the registration yourself, the Notary, a gestoría, or your real estate brokerage can arrange the registration and payment of the associated taxes and fees on your behalf, ensuring the process is completed correctly and efficiently.
14. Set Up Ownership
After completion, you should:
• Transfer utility accounts into your name.
• Register for IBI (local property tax).
• Arrange payment of owners' community fees, where applicable.
• Keep copies of all deeds, tax receipts and insurance documents.
Your real estate agent can assist with these post-completion formalities by helping transfer utility contracts, introducing trusted service providers, liaising with the community administrator, and ensuring you are set up for ongoing property ownership as smoothly as possible.
Ongoing Ownership Costs
Owning a property in Tenerife involves several ongoing expenses that should be included in your annual budget:
Property Insurance: Buildings insurance is strongly recommended from the date of completion. If the property is furnished, contents insurance is also advisable.
IBI (Impuesto sobre Bienes Inmuebles): The annual local property tax, payable to the Town Hall (Ayuntamiento). The amount varies depending on the property's cadastral value and municipality.
Non-Resident Property Tax: If you are not a Spanish tax resident, you must submit an annual non-resident income tax return. Even if the property is not rented, an imputed income tax may apply.
Community Fees: If the property is part of a residential community, monthly or quarterly fees contribute to the maintenance of communal areas, gardens, swimming pools, lifts, security and building management.
Utilities: Ongoing costs include electricity, water and refuse collection charges, depending on your usage and municipality.
Internet and Telecommunications: Fibre broadband is widely available across Tenerife, with a range of providers and packages to suit both permanent residents and holiday homeowners.
Investment Property Income Tax: If you rent your property as a Vivienda Vacacional (VV), rental income must be declared to the Spanish tax authorities. The tax treatment depends on your country of tax residence and any applicable double taxation agreement. You may also need to comply with regional regulations governing holiday rentals.
Your real estate agent can help you estimate these ongoing costs before you purchase and introduce you to trusted insurance providers, utility companies, tax advisers and property management services to ensure your property is correctly set up and fully compliant.
