Living in the South of Tenerife: Real Pros and Cons

Buying a property in Tenerife can go very well or cost you thousands of euros, and the difference almost always lies in the details overlooked before signing. This guide covers the most common mistakes when buying property in Tenerife and, above all, how to avoid them, with particular attention to the foreign buyer and the legal and tax peculiarities of the Canary Islands.

Not checking the nota simple or the property encumbrances

The most expensive mistake is trusting the seller's word without verifying the registry situation. The nota simple from the Land Registry costs just a few euros and tells you who the real owner is, the registered surface area and, most importantly, whether the property carries mortgages, embargoes, easements or third-party rights.

In Tenerife we regularly come across common cases: an inherited property with multiple owners not all of whom want to sell, or an apartment with outstanding community fees and IBI (local property tax) that the new owner ends up absorbing. Always request the updated nota simple, the latest IBI receipt and a community certificate confirming there are no debts. If anything does not add up in the Registry, do not proceed until it is resolved.

Miscalculating costs and taxes (and here the Canary Islands are different)

Many buyers budget only the sale price and forget that the purchase adds between 8% and 12% extra in taxes and expenses. The big difference on the islands is fiscal: in the Canary Islands, mainland VAT does not apply; instead, the IGIC (Canary Islands General Indirect Tax) is charged.

• Second-hand property: you pay the Transfer Tax (ITP — Impuesto de Transmisiones Patrimoniales), which in the Canary Islands is around 5% to 6.5% depending on the price.
• New build: IGIC applies (usually 7% for residential property) plus Stamp Duty (Actos Jurídicos Documentados).
• Other costs: notary fees, land registry inscription, administrative agency and, if you need financing, the valuation and mortgage costs.

Do the real sums before falling in love with a house. A 250,000 € apartment can mean more than 20,000 € in extra costs you need to have planned for, not discover at the notary's office.

Buying as a foreigner without preparing the paperwork

If you are not a resident in Spain, there is one formality you cannot skip: the NIE (Número de Identificación de Extranjero — Foreigner Identification Number). Without a NIE you cannot sign the deed, pay taxes or comfortably open a Spanish bank account, so apply for it well in advance because appointments in Tenerife can sometimes take weeks.

We also recommend opening a bank account in Spain to set up direct debits for utilities and community fees, and consider a notarial power of attorney if you will not be on the island on the day of signing. A buyer who arrives two days before the deed signing without a NIE or bank account usually ends up postponing the transaction and sometimes losing the property.

Signing the reservation contract without understanding what you are signing

The reservation contract (contrato de arras) is the preliminary agreement that reserves the property and fixes the price and timelines, normally with a 10% deposit. The common mistake is signing it without reading the fine print or knowing what type of arras is agreed.

Penitential arras (arras penitenciales), the most common type, allow the buyer to withdraw and lose the deposit, and the seller to back out by returning it doubled. It is worth stating in writing what happens if financing does not come through or if a hidden encumbrance appears in the nota simple. Never hand over the deposit in cash without a contract or traceable bank transfer.

Ignoring planning regulations: the Coastal Law and rural land

Tenerife has a lot of coastline and a lot of countryside, and that is where two risks appear that do not exist in other purchases. The Coastal Law (Ley de Costas) can affect properties near the sea located in public domain or easement zones, with serious limitations on renovations or legalisation.

Inland, it is common to find rural houses or farms on rural land (suelo rústico) with unlicensed extensions or unregistered constructions. Before buying, check that the property has its first occupation licence (licencia de primera ocupación) or habitability certificate, and that what you see built matches what appears in the Cadastre and the Land Registry. Something cheap can hide a building you will never be able to legalise.

Not inspecting the property and getting carried away by emotion

A property with good photos and ocean views sells itself, and that is why many buyers give up looking closely. Check for damp, condition of installations, real construction quality and orientation, and take into account the climate of each area: the dry and sunny south does not require the same maintenance as the north, which is more humid and green.

Visit the property more than once, at different times of day, and ask about the community, neighbours and annual costs. An emotional impulse can be corrected with a calm second visit and, if necessary, with an architect to assess the condition of the building.

Skipping independent professional advice

The last mistake is trying to do everything yourself to save money. A local estate agent knows real prices by area and spots bargains that are actually problems, and an independent lawyer (independent from the seller) reviews the documentation and protects your interests. It is a small investment compared to what you are risking.

At Tu Nido Tenerife we accompany every purchase with registry verification, tax calculation and coordination of the signing, so you arrive at the notary's office without any surprises.

Frequently asked questions

What are the most common mistakes when buying a house in Tenerife?

Not requesting the nota simple, miscalculating taxes (IGIC or ITP in the Canary Islands), signing the arras without understanding them, ignoring the Coastal Law or rural land status, skipping the inspection and buying without independent advice. Almost all of them can be avoided with good due diligence beforehand.

What should you check before buying a property?

The registry situation with the nota simple, that there are no encumbrances or debts for IBI or community fees, the first occupation licence or habitability certificate, the match between the Cadastre, Land Registry and what has been built, and the real physical condition of the property. In coastal areas, also its relationship with the Coastal Law.

Is it worth buying a property in Tenerife?

For many buyers, yes: stable climate all year round, Canarian tax rates lower than mainland Spain and solid tourist and residential rental demand. The key is to buy well, with clear numbers and verified documentation, without being rushed.

How can you avoid being scammed when buying a house as a foreigner?

Work with verifiable professionals, always demand the nota simple, never hand over money without a contract or traceable transfer, and be suspicious of prices that seem too good to be true. Having your NIE and bank account in order before signing also protects you from haste and pressure.

Buy in Tenerife with confidence

Avoiding these mistakes does not require being an expert, but surrounding yourself with those who are and not skipping any step. If you are looking for your home on the island, explore our selection of apartments for sale or use the property search to filter by area and budget. And if your purchase depends on selling your current home first, we can also help you sell your property with a realistic valuation. Tell us what you are looking for and we will guide you every step of the way.