Buying a property in Tenerife is an important decision both personally and as an investment. In addition to the purchase price, it is essential to take into account the associated costs, which in practice are usually around 10% of the property value. This percentage is an approximate guideline, but it is made up of different taxes and administrative costs that vary depending on whether the property is resale or new build. Below is a clear, realistic and professional breakdown of these costs in each case.
For a resale property
When buying a second-hand property, the main tax is the Property Transfer Tax (ITP), which in the Canary Islands is usually around 6.5% of the purchase price. This tax represents the largest part of the tax cost of the transaction.
In addition to ITP, there are other necessary costs:
The notary, where the public deed is signed, usually costs between €600 and €1,200 depending on the property price.
The Land Registry, where the property is registered under the buyer’s name, usually ranges between €400 and €800.
If the purchase is financed through a mortgage, additional administration costs apply, usually between €300 and €600, handling all documentation with the bank and authorities. A property valuation may also be required, costing approximately €300 to €500.
Overall, total costs for a resale property are usually between 8% and 10% of the purchase price.
For a new build property
In the case of a new build, the tax system is different. Instead of ITP, the buyer must pay IGIC (7%) and Stamp Duty (AJD), which ranges between 0.75% and 1%.
To these taxes are added the same standard formalisation costs:
The notary costs between €700 and €1,500 depending on the property value.
The Land Registry ranges between €500 and €900.
If a mortgage is involved, administration costs (€300–€600) and valuation costs (€300–€500) are also added.
Overall, new build costs are slightly higher, usually between 10% and 12% of the property value.
Practical example
For a property worth €400,000 in Tenerife:
Resale
ITP (6.5%): €26,000
Notary: €900 – €1,400
Registry: €600 – €900
Administration and valuation (if mortgage): €600 – €1,000
Total costs: €28,100 – €29,300
New build
IGIC (7%): €28,000
AJD (0.75% – 1%): €3,000 – €4,000
Notary: €900 – €1,500
Registry: €600 – €1,000
Administration and valuation: €600 – €1,000
Total costs: €33,100 – €35,500
Conclusion
Buying costs in Tenerife are an essential part of the investment and should be planned from the beginning. Although it is often said to be around 10%, in reality these costs are made up of taxes such as ITP or IGIC, along with administrative and notary fees. Having this information allows buyers to make more informed decisions, compare options more effectively, and plan their investment more accurately.