Costa Adeje · €320,000 resale
| Item | Amount |
|---|---|
| Equity | €100,000 (31%) |
| Mortgage | €220,000 (69%) |
| Purchase costs (~9%) | ~€29,000 (ITP 6.5%) |
| Loan-to-value | 69% LTV |
| Example payment (20y, 2.4%) | ~€1,155/month |
| Bank type | Major Spanish bank · Adeje |
Region focus · Spain · Canaries · Tenerife · §34i
Tenerife property for sale: which tax is due when you buy and what a bank will lend
Tenerife is the largest Canary island, with two airports and a clear north–south split: premium tourism in the south, year-round living in the north. Resale carries ITP at 6.5%, a new build IGIC at 7% rather than the 10% IVA.
How much transfer tax do you pay on Tenerife property?
On resale purchases in Tenerife, the Canary ITP of 6.5% applies, calculated on the higher of purchase price and cadastral reference. On new builds, the Canary IGIC of 7% plus AJD 1% replaces Spanish IVA. The bank finances the purchase price, not the ITP and other incidental costs; you cover those from equity.
Not every bank lends against income in a foreign currency — we approach the ones that do. For the full evaluation, enter your income converted into euros.
Your estimate
- Monthly payment(calculation rate—)—
- Loan amount—
- Loan-to-value (LTV)—
- Purchase costs—
Our brokerage focus starts at a loan amount of around €300,000 — we arrange smaller loans too and will give you an honest read on whether it makes sense in your case.
Estimate, no guarantee. The interest rate is the calculation basis for this example, not a market rate or commitment — the rate you actually achieve depends on your credit profile, the property and the bank. Spain: max. 70 % LTV for non-residents. Purchase costs by region as on our purchase-costs page; the other items are guide values.
Tenerife property for sale: which purchases carry the 6.5% ITP?
Tenerife property for sale carries 6.5% ITP on resale, and banks lend non-residents up to 70%.
- What is the purchase tax on Tenerife? Resale: ITP 6.5% on the higher of purchase price and cadastral reference. New build: Canarian IGIC 7% instead of IVA 10%, plus AJD 1%. Financing a new build in stages.
- South for holiday lets, north for year-round living: South (Costa Adeje, Los Cristianos): guaranteed sun, largest holiday-letting market, highest prices. North (Puerto de la Cruz, La Laguna): greener, cheaper, a genuine year-round housing market. The regions.
- How much will a Spanish bank lend? For non-residents as on the mainland: up to 70% LTV, terms up to 25 years — several major Spanish banks with dense branch networks. The Spanish banks.
How does the Tenerife market differ by area?
The south, around Costa Adeje and Los Cristianos, is the main tourist hub and the most expensive property market, while the north, around Puerto de la Cruz, Santa Cruz and La Laguna, is greener, significantly cheaper and a genuine year-round property market.
How much does a Spanish bank lend? For non-residents, the same key figures apply as on the mainland: up to 70 % loan-to-value ratio, terms of up to 25 years — several major Spanish banks have their own programmes for non-residents. Spanish banks.
How much property transfer tax is payable when buying property in Tenerife? For second-hand properties in Tenerife, the Canary Islands’ ITP rate of 6.5 % applies, calculated on the higher of the purchase price or the cadastral value — one of the lowest property transfer tax rates in Spain.
Only in the case of new-build properties is the Spanish IVA replaced by the Canarian IGIC (7 %) plus AJD (1 %); for second-hand properties, the ITP continues to apply.
The market is divided into the sun-drenched south (Costa Adeje, Los Cristianos), home to TFS Airport, and the greener, more urban north around Santa Cruz and Puerto de la Cruz, home to TFN Airport.
The mild climate all year round makes the island an attractive option both as a second home and for letting. Important to note regarding financing: the bank finances the purchase price, but not the 6.5 % ITP or the other purchase costs — these must be covered by your own funds. As at 07/2026.
Costa Adeje, Los Cristianos, Las Américas: The island’s tourist hub and the most expensive market. Costa Adeje is regarded as an upmarket area (San Eugenio, Fañabé, El Duque), while Los Cristianos and Playa de las Américas are established mass-market and holiday destinations with high rental occupancy rates. Sunshine is guaranteed almost all year round.
El Médano & Golf del Sur: El Médano is Europe’s windsurfing and kitesurfing centre — with its own weather-independent demand market. Golf del Sur and Amarilla Golf appeal to golf enthusiasts: quiet, close to resorts, and often cheaper per square metre than the Adeje strip.
Puerto de la Cruz, La Orotava, Santa Cruz, La Laguna: The green, more authentic north: cooler, with a stronger Spanish character, and significantly cheaper. Puerto de la Cruz as a traditional holiday destination; Santa Cruz and the university town of La Laguna (UNESCO) with a genuine year-round housing market rather than purely a holiday market.
ITP 6.5 %, new-build IGIC 7 %: Special Economic Zone — the property transfer tax still applies. The tax applicable in Tenerife depends on whether the property is second-hand or new. When purchasing a second-hand property, the ITP applies at the standard rate of 6.5 %.
Compared with the mainland, this represents a reduction of 0.5–3.5 % for second-hand properties (6.5 % instead of 7–10 %) and around 3 % for new-build properties (7 % instead of 10 %).
Up to 70 % LTV (loan-to-value ratio): Spanish banks offer the same financing terms in Tenerife as on the mainland: up to 70 % loan-to-value ratio for non-residents. Several major Spanish banks operate their own programmes for non-residents.
Two airports: TFS & TFN: Tenerife South (TFS) handles holiday flights from Germany, while Tenerife North (TFN) handles connections to other parts of the island and the mainland. Both airports are served by direct flights all year round from all major German cities, with a flight time of around 4.5 hours.
What do two example cases from Tenerife show?
Concrete example calculations for typical foreign buyers — as a guide for your own plan.
Calculate your costs quickly: Prefilled with typical values for Tenerife — adjust the figures and the result updates at once; the region and its tax rate are already set.
What is in the full evaluation by email?
Everything the calculator does not show on the page: equity needed including purchase costs, every cost item, total interest and total cost — and, with your income, how much you can afford under the 35 % rule.
We approach at least 2 of the 15–20 banks we work with for your case (31 in Spain, 14 in Portugal); which ones fit, we discuss in person.
Case studies from Tenerife: how have buyers financed their property?
Anonymised examples of how German-speaking buyers have financed their property in Tenerife.
Tenerife: 6.5 % on existing properties, IGIC on new-builds: In Tenerife, the Canarian system applies: 6.5 % ITP on the purchase of a second-hand property; for new-builds from a developer, IGIC at 7 % plus 1 % AJD, which applies only to new-builds.
This is noticeably lower than in the Balearic Islands or Catalonia — but it is still not financed. A second factor carries greater weight in Tenerife than the tax rate: there are significant differences in property valuations between the north and south, and the bank bases its loan on the lower of the purchase price and the valuation.
Anyone buying in the south at holiday market prices should initiate the valuation process early — the gap tends to arise more often on the valuation side than on the tax side there.
Gran Canaria: A direct comparison with the neighbouring island.
How can you use a property in Tenerife as a source of capital?
Tenerife falls under the same Canarian rules as Gran Canaria, Lanzarote and Fuerteventura. A paid-off property in Tenerife does not have to be sold to free up capital — it can be mortgaged instead.
Inheritance tax, Canary Islands: 99.9% relief, with no cap, since 06.09.2023 — groups I and II, meaning parents, children and spouses (art. 24 ter Decreto Legislativo 1/2009, as amended by Decreto-ley 5/2023). In the Canaries the inheritance relief also extends to group III.
For inheritance, the rules of the autonomous community holding the highest value of the Spanish estate apply. With a single Spanish property that is simply its region. The relief must be claimed within the filing deadline — miss it and it becomes contentious.
How far a Spanish bank will go on an unencumbered property, what changes with the owner's age, and what the released money may be used for is set out in full under releasing capital from a Spanish property.
A gift of the released money to a child is taxed in Germany, not in Spain — see inheritance and gift tax in Spain. Inheritance tax, groups I and II (parents, children, spouses). Regional tax law changes regularly.
What was actually paid in this area. Portal prices are what sellers ask. What was recorded at the notary is published by the Spanish notaries themselves: the Portal Estadístico del Notariado — free, no registration, and searchable down to postcode level.
In the first quarter of 2026 the prices paid ran 29 per cent below asking prices, the widest gap since 2007. For a mortgage that is the figure that counts: the bank's valuer works from completed sales, not from listings. → Portal Estadístico del Notariado · What that means for your financing · Where the numbers come from
Case reports Tenerife: Anonymised examples of how buyers financed their property in Tenerife.
Gran Canaria — mortgage for non-residents: Las Palmas as a year-round city and the south around Maspalomas.
Puerto de la Cruz · €210,000 resale
| Item | Amount |
|---|---|
| Equity | €70,000 (33%) |
| Mortgage | €140,000 (67%) |
| Purchase costs (~9%) | ~€19,000 (ITP 6.5%) |
| Loan-to-value | 67% LTV |
| Example payment (20y, 2.4%) | ~€735/month |
| Bank type | Major Spanish bank · Puerto de la Cruz |
Model calculations without guarantee. Not binding offers. Terms vary depending on credit profile, property and bank. No tax or legal advice.
Frequently asked questions
Buy property in Tenerife: which costs come on top of the purchase price?
Besides the purchase price you pay the purchase tax and the other incidental costs, which come to about 9% in our two Tenerife examples. On a resale this is the 6.5% ITP; on a new build the 7% IGIC plus 1% AJD apply instead. The bank does not finance these costs, so you cover them from equity.
North or south — which is better for foreign buyers?
The south (Costa Adeje, Los Cristianos, Las Américas) offers guaranteed sun, the largest holiday-letting market and the best resale liquidity — at the highest prices. The north (Puerto de la Cruz, La Orotava, La Laguna) is greener, cooler, more authentic and markedly cheaper, with a genuine year-round housing market. Living with a residential feel → north; yield via short-term letting → south.
How much do I save through the Canary tax status?
Less than most buyers expect. A resale purchase on Tenerife still carries ITP, charged at the standard rate of 6.5% on whichever is higher, the purchase price or the cadastral reference value.
A new build carries IGIC at 7% in place of the 10% IVA, with AJD at 1% added. Against the mainland that saves 0.5–3.5% on a resale (6.5% instead of 7–10%) and roughly 3% on a new build (7% instead of 10%).
Which banks finance in Tenerife?
We approach at least 2 of 15–20 institutions per case; several major Spanish banks maintain dense branch networks in Adeje, Los Cristianos and Santa Cruz. Which one fits your case is settled in conversation. For non-residents the same benchmarks apply as on the mainland — up to 70% LTV, terms up to 25 years.
May I let my property to tourists?
Tourist letting requires a Vivienda Vacacional (VV) licence. On Tenerife, issuance is regulated by municipality and zoning — usually possible in the classic tourism zones of the south, partly restricted in purely residential areas. Check the specific licence status of the property before buying.
Is El Médano or Golf del Sur worth it versus Costa Adeje?
Both serve their own demand: El Médano thrives on year-round wind/kitesurf tourism and is therefore more weather-independent, while Golf del Sur appeals to golf buyers. The price per square metre is often below the Adeje strip, which lowers the entry sum and the equity required.
What rental yields can I expect in Tenerife?
In the southern tourism areas, 4–7% gross is possible depending on the property and occupancy; in the northern housing market rather 3–5%. The stable climate allows both summer and winter letting, which raises effective occupancy versus pure summer destinations.
Request a mortgage
Planning a purchase on Tenerife? A free initial consultation in English — also German, French, Spanish, Russian. We review your situation and find the right bank in Spain.
This is not tax advice.
Related pages
Calculator
Mortgage calculator
Monthly payment, loan and purchase costs by region straight away; total cost and equity needed by email.
Canaries · overview
Canary Islands: all islands
Tenerife, Gran Canaria, Lanzarote, Fuerteventura compared.
Case reports · Tenerife
See all Tenerife case reports
Anonymised case reports on financing in Tenerife for non-residents in Spain: how long the mortgage has to run, and what the valuation decides.
Content by Siegfried Perini — local brand representative since 2019, active in real estate since 1992, entered in the German intermediary register (§ 11a GewO) as a person directly involved in brokerage and advice. Point of contact for German-speaking buyers in Spain and Portugal. Brokerage by Olga Nikushkina, mortgage credit intermediary under § 34i German Trade Regulation (GewO); in Portugal through a locally licensed intermediary.