If you’re thinking about buying property in Tenerife, whether it’s a holiday apartment, a retirement home in the sun, or a long-term investment, then understanding the true costs involved is absolutely essential.
It’s all very well spotting what looks like a bargain on a property portal, but unless you’ve done your homework, that attractive 250,000€ listing might end up costing you quite a bit more than you’d planned.
In this guide, I’ll walk you through everything you need to budget for, not just the upfront costs of buying a property in Tenerife, but also the ongoing expenses of owning and maintaining one.
As always, I’m writing this from real on-the-ground experience, not from behind a desk in a cold office somewhere on the mainland.
If you’re curious about the best places to buy in Tenerife, check our detailed guide.
1. Upfront Costs of Buying Property in Tenerife
a) Property Transfer Tax (ITP)
If you’re buying a resale property in Tenerife (i.e., not brand new), you’ll be paying Impuesto sobre Transmisiones Patrimoniales (ITP). This is the Spanish version of stamp duty, and in the Canary Islands, as I write this, it’s 6.5% of the agreed sale price.
So, for example:
- On a 250,000€ apartment, you’ll pay 16,250€ in ITP.
Important tip: This is based on the price declared at the notary, not necessarily the advertised or negotiated price, so be cautious if someone asks you to under-declare the purchase price, as it can come back to bite you.
b) Notary Fees
The notary is a public official who oversees the signing of the sales deed and ensures all legal requirements are met.
Fees vary slightly depending on the property price and number of pages in the escritura, if you’re having a mortgage but for most buyers, expect to pay somewhere between 600€ and 1,000€.
c) Land Registry Fees
After the notary, the property needs to be registered in your name at the local Land Registry (Registro de la Propiedad).
Again, this is a sliding scale, but typically ranges from 500€ to 1,000€.
d) Legal Fees
It’s strongly recommended (and in my opinion, essential) to hire a reputable, independent lawyer when buying property in Tenerife.
They’ll carry out all the checks, deal with utility transfers, tax filings, and protect your interests throughout the process.
Most lawyers charge around 1% of the purchase price, with a minimum of about €1,200.
e) Banking and Mortgage Costs (if applicable)
If you’re taking out a Spanish mortgage, there are a few extra costs:
- Valuation: €300–€500
- Bank arrangement fee: Often 0.5%–1% of the loan amount
- Mortgage registration fee: Around 0.3%–0.5% of the loan value
Your lawyer or estate agent should explain all of this before you proceed, but it’s one to factor in early if you’re financing your purchase.
2. Ongoing Costs of Owning Property in Tenerife
Once you’ve got the keys, what are you looking at in terms of regular outgoings?
Here’s a breakdown of what to expect.
a) Annual Property Tax (IBI)
This is a local tax paid to the town hall and is based on the cadastral value of your property (usually much lower than the market value).
In most parts of Tenerife, IBI ranges from €200 to €800 per year, depending on size and location, but I’ve known it to be well in excess of 1.000€ a year for certain luxury villas in Tenerife.
For example, a 2-bed apartment in a tourist area like Los Cristianos might have an annual IBI of around €400.
b) Rubbish Collection (Basura Tax)
Paid annually or bi-annually, this covers waste disposal and recycling services. It’s usually between 100€ and 200€ per year, again depending on the municipality.
It’s worth checking whether it’s billed separately or included in the community fees.
c) Community Fees
If you’re buying an apartment or villa within a complex, you’ll almost certainly be part of a comunidad de propietarios.
This is essentially the residents’ association, and the fees go towards shared maintenance, things like pools, lifts, lighting, gardens, cleaning, and administration.
Community fees can vary massively:
- Simple apartment with no pool: 30€ – 60€/month
- Tourist complex with multiple pools and reception: 120€ – 250€/month
- Luxury villa community with 24-hour security: 300€+/month
Make sure you ask for the last 12 months of community fee records before committing to a purchase.
d) Utility Bills
- Electricity: Depending on the property and how long people stay for, typically 40€ – 80€/month for average use. Expect more if you run air-con all summer or heaters in winter.
- Water: 20€ – 40€/month depending on use.
- Internet: Fibre is widely available. Plans range from 25€ to 60€/month.
- Gas: Most homes in Tenerife don’t have mains gas. If you have a gas water heater, you’ll be swapping bottles (bombonas), which are about 18€ – 20€ each…there are some companies that deliver the bottles, obviously a bit more expensive, but definitely easier on the body.
3. Other Costs and Local Quirks
a) Home Insurance
Not mandatory, but highly recommended. Expect around 200€ – 400€ per year, depending on coverage and size.
If you have a mortgage, the bank will require it, and may try to sell you their own product. You’re under no obligation to take theirs (although if you don’t speak Spanish, you’ll probably end up just accepting it to keep the peace) but you can always shop around.
b) Non-Resident Income Tax
Yes, even if you don’t rent the place out. If you’re a non-resident and own property in Spain, you’re subject to a notional income tax based on the cadastral value.
For most, this works out to about 400€ per year, per owner of the property.
It’s filed annually, and your lawyer or fiscal representative can handle it.
c) Currency Exchange Fees
This is often overlooked.
If you’re transferring large sums from pounds or dollars to euros, don’t just use your bank—compare currency exchange services to potentially save thousands.
Seriously, you could save thousands by using a currency specialist like Currencies Direct instead of your bank — especially if you’re sending large sums from the UK or elsewhere into euros.
Buying a property in Tenerife is, for many people, one of the best decisions they’ve ever made, but only if it’s done with your eyes wide open.
The price you see on the portal is only part of the story.
You’ll want to factor in around 10–12% extra on top of the purchase price to cover the buying costs, and then keep a budget in mind for ongoing ownership.
Of course, every property is different.
If you’re thinking about buying a property in Tenerife and want a clearer idea of the real numbers, without any sugar-coating, just get in touch and I’ll happily walk you through it.