Tenerife is an island where the investment really pays off. For years, the value of properties on Tenerife had been growing at an average annual rate of 9%. The financial crisis has also affected Spain. As the real estate bubble burst, real estate prices plummeted by 20-35%, especially in the tourist areas of the South. Compared to 2011, however, prices have remained stable and appear to have bottomed out. Moreover, in top locations the real estate market seems to be growing at a discernible, albeit cautious pace. It is the right time to buy. Properties are usually sold through real estate agents. Estate agents operate in every major city, and in tourist centres they have their offices in almost every street. Although a vast majority of estate agents are reputable, you will be well advised to proceed with caution. The staff at large real estate offices may or may not speak English or German. Given the difficulties in the real estate market, many agents have found themselves in deep water financially. In view of all this, we recommend that you turn to our business associates, MCREFORM. There they speak English, German, Spanish and Slovak. The firm deals in real estate and, what is important, offers a wide range of construction services, including comprehensive refurbishment of flats and houses. Should MCREFORM be unable to offer a property from their own portfolio, they are well placed to find, in collaboration with local estate agents, an appropriate alternative. In our experience, working with MC REFORM makes the acquisition of a freehold or leasehold much safer. The fact that the firm itself carries out construction works up to European quality standards significantly increases the odds of your investment being usable and enjoyable.

When leasing, and especially selling, a property, you cannot do without without legal assistance. Under Spanish law public notaries play an essential role in ensuring that property is properly registered in the cadastre. Our experience suggests that non-residents will be well-advised to turn to GALKAP.

The staff at this agency speak Slovak, English, German and of course Spanish. For nationals of the Czech Republic and the Slovak Republic, the agency offers official and court-approved translations of documents and deeds. For nationals of German- and English-speaking countries, the agency can help arrange for such translations.

Property prices are non-negotiable, and may not be changed by estate agents; only the seller is entitled to do so. The seller typically does not conclude exclusive contracts with an estate agent; quite often a flat is offered to the market by a number of agents. Entitlement to commission arises only when a transaction is completed.

Sale is governed by Spanish regulations, which are different from ours. Knowing local regulations is important for tax compliance reasons in connection with the sale and purchase of real estate. In principle, three types of taxes are involved:

• Under the law, tax on the sale of real estate is payable by the buyer.
• Accumulation tax payable by the vendor. It is a tax on the accumulated price, i.e. the difference between the original purchase price at the time of purchase and the imputed sale price at the time of sale. This imputed tax is assessed using approved tables and is not affected by the transaction price. As real estate prices have declined, the difference, i.e. accumulation, can prove negative; hence this tax might not apply.
• Local tax payable to the community where the property is situated. This tax can be split between buyer and seller. Alternatively, they can agree on which party will pay it.

The prices advertised by real estate agents are net of such taxes. Experience suggests that that the final price inclusive of all costs may be 4-6% more than the advertised one.

The transfer of property is deemed valid if the purchase contract is authenticated by a notary. The contract must be drawn up in Spanish and the relevant proceedings must also be held in in Spanish.

Property prices range from about €1,400 per square metre to around €3,000 per square meter depending on quality and location. In general, property prices in the South tend to be lower. The price of a flat is inclusive of the balcony or terrace if any. Terraces are especially important because they are used as a year-round living space. New construction - promociónes - offers another opportunity, especially in the promising areas both in the South and North.

Old property almost invariably needs after-purchase refurbishment. To the uninitiated, negotiating with local companies may prove a nightmarish experience, notably because of linguistic and mentality differences. The island is heavily populated by expatriates from German- and English-speaking countries and from Scandinavia. Here again, we recommend MCREFORM. To date, the company has carried out dozens of large-scale and daunting refurbishment projects offered at standard European rates. Budgeting, costing, compliance with quality standards and deadlines, daily telephone and e-mail communication in the Slovak, German, English or Spanish languages are to be taken for granted.

Like elsewhere, one should be extremely cautious here when dealing with the the world of real estate. Even though fraud is not common, one can come across swindlers. Each purchase of property should be examined in advance to ascertain whether all conditions for the transfer of real estate have been met and whether the property is not encumbered by debts, collection enforcement orders, easements, etc.

Long-term leases of real estate, measured in months, are becoming increasingly popular, especially during the winter season. In a good location a quality and reasonably well-equipped flat measuring approximately 60 m2 and featuring a shared swimming pool can be leased from €550 a month. Many senior citizens as well as young people arrive in Tenerife at the beginning of October and stay on till Easter. If not looking to buy property, they usually rely on long-term leases.

Quality language courses, golf, surfing, horse riding, paragliding, hiking, biking and many other activities associated with eternal spring and summer all add a whole new dimension to life on the island of Tenerife.

Related links:
Information about investing on Teneriffe
General information about live on Tenerife
Air tickets, transport
Canary cuisine
Overview of the prices on the island

With any questions can you contact us via
email: info@sunnytenerife.com
or through this form: