Tenerife is part of the Canary Islands, the territory of Spain. The Canaries have their own government and a special tax status within the European Union. Accordingly, your investments are protected by European law, but you pay less taxes.
For foreign citizens, there are no restrictions on the acquisition of real estate in Spain, Tenerife. The process of buying or selling is not difficult.
Let’s find out what taxes exist in Tenerife.
The cost of buying a property in Tenerife is approximately 10% of the value of the property.
And approximately 12% when obtaining a mortgage.
Types of major taxes associated with the purchase of real estate in Tenerife
NIE (Numero de Identidad de Extranjero). Aliens identification number.
Every foreigner must complete this document before starting the process of buying real estate, land, vehicle, yacht or business. It is also necessary for opening an account with a local bank.
The identification number of the alien is issued by the National Police in accordance with Spanish law.
His number, which will be assigned to you, is unique and will never change, even with a change of surname. In the future, for you this document will be no less important than your passport. Will be valid until you get a residence permit.
To issue NIE in Tenerife is not difficult, its cost is about 10 euros, you can independently or by proxy.
IGIC – (Impuesto General Indirecto Canario)
This is a value-added tax (analogous to VAT in Russia)
For residential real estate is 7% of the cost when buying a commercial real estate and land.
ITP — (Impuesto Sobre Transmisiones Patrimoniales)
Tax on the transfer of property.
6.5% of the purchase price, a secondary housing
8% of the purchase price of primary, new housing
4% – If you are tax resident of Spain and buy the first housing, as well as the age of 30 years
AJD — (Actos Juridicos Documentados)
Tax on registration of legal acts.
Is 0.75% of the value of real estate. It is paid if you buy a primary, new housing.
IIVTNU (Plusvalia) — (Impuesto Sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana)
Tax on the increase in the cost of urban land. Local municipal tax, paid by the seller of real estate.
The tax rate is determined by the city hall of your city (Ayuntamiento).
Registro de la Propiedad Espana
The costs of registration in the State Register of Property of Spain.
The amount depends on the price of the object, on average 600 – 1000 euros.
Notary costs amount to approximately 700-1000 euros.
IBI — (Impuesto Sobre Bienes Inmuebles)
Annual property tax. The tax rate is 0.5-2% of the cadastral value of the facility, but the amount of tax also depends on the area and type of housing.
IVTM — (Impuesto Sobre Vehiculos de Traccion Mecanica)
The tax on the vehicle, paid once a year, averages 150-250 euros.
IRNR — (Impuesto Sobre la Renta de no residentes, declaracion ordinaria)
Tax on the income of non-residents of Spain from the rental of real estate.
Paid annually by homeowners, even if you do not rent out real estate and do not make a profit.
The rate of 25% of profits. In another case, the tax form 210 is filled, to perform this procedure it is better to instruct the specialist (Acessoria) to calculate this tax.
Opinion by Irina Grinfeld