Guide for Foreign Investors Interested in Buying in Tenerife

Tenerife has become a highly attractive destination for foreign investors seeking opportunities in the real estate market. This guide will help you understand the buying process, legal and tax aspects to consider, the most interesting areas to invest in, and the expected profitability.

Step-by-step Buying Process

1. Obtain your NIE: As a foreigner, you'll need a Foreigner Identification Number (NIE) to carry out any real estate transaction in Spain.
2. Open a Spanish bank account: This is necessary to manage payments related to the purchase. A local advisor can help you navigate the banking system.
3. Find the ideal property: Research the market and define your preferences in terms of location, property type, and budget.
4. Sign a reservation contract: This initial agreement secures the property while you perform due diligence.
5. Conduct due diligence: Verify the legal status of the property, any encumbrances, and the condition of the facilities.
6. Negotiate and sign the purchase contract: This document should include all the details of the transaction.
7. Apply for financing if necessary: If you plan to obtain a mortgage, start the process with the bank.
8. Sign the public deed: This step formalizes the sale before a notary.
9. Register the property: Record the deed in the Property Registry.

At TEIDE Real Estate Services, located in Puerto de la Cruz, we are prepared to accompany you through each step of this process, ensuring a smooth and stress-free experience.

Legal and Tax Aspects to Consider

• Taxes: You'll need to pay the Property Transfer Tax (ITP) or IGIC, depending on whether the property is new or second-hand.
• Tax declaration for non-residents: If you don't reside in Spain, you'll have to file the Model 210 annually, even if you don't obtain income from the property.
• Legal advice: It's essential to have a lawyer specialized in real estate law to protect your interests throughout the process.

Our team of experts can offer you comprehensive advice on all these aspects, ensuring that your investment complies with all legal and tax regulations.

Most Attractive Areas to Invest According to Buyer Profile

1. Puerto de la Cruz: An emblematic area in the north of Tenerife, ideal for both tourist and residential rentals. Its traditional charm, privileged climate, and growing popularity among international tourists make it an excellent option for those seeking properties with high demand throughout the year. Additionally, its well-established tourist infrastructure and welcoming atmosphere make it attractive to a wide range of investors.
2. Icod de los Vinos: An emerging area with great growth potential, especially with the upcoming opening of the tunnel that will connect it to the south of the island. This infrastructure improvement promises to significantly reduce travel times, increasing the attractiveness of the area for both residents and tourists. Icod de los Vinos offers an impressive natural environment, with the famous Millennial Dragon Tree as its main attraction, and still accessible property prices, making it an excellent option for investors looking to capitalize on the future development of the area.
3. Santa Cruz de Tenerife: Ideal for investors looking for a stable rental market and properties with potential for appreciation in the island's capital.
4. Costa Adeje: Perfect for those looking to invest in luxury properties and high-end tourism in the south of Tenerife.
5. Los Cristianos: Attractive for investors interested in the tourist and expatriate market in a well-established area of the south.
6. La Laguna: Excellent option for investors targeting the student rental market, given its proximity to the University of La Laguna.

With our deep knowledge of the local market at TEIDE Real Estate Services, we can help you identify the best opportunities in these areas and beyond, adapting to your specific investment goals.

Expected Profitability of Different Types of Properties

• General profitability: In Tenerife, you can obtain up to 6.8% annual profit on rentals.
• Specific areas: San Cristóbal de la Laguna and Santa Cruz de Tenerife offer a profitability of 7.1%, being the highest on the island.
• Investment recovery time: With these profitability figures, it is estimated that the investment can be recovered in about 15 years.
• Practical example: For a property of 107,500 euros, with a mortgage of 86,000 euros, you could obtain a monthly rent of 785 euros, generating a profit of 331 euros over the mortgage payment.

Investing in Tenerife offers multiple advantages, from a privileged climate to a growing tourist demand. With proper planning and professional advice, you can take advantage of the opportunities offered by this growing market.

At TEIDE Real Estate Services, our commitment is to help you maximize the return on your investment. Our multilingual team and our experience in the local market allow us to offer you a personalized and comprehensive service, from finding the ideal property to long-term management of your investment.

Remember that each investment should be tailored to your profile and financial goals. Tenerife awaits you with its incredible real estate opportunities!