How to buy property in Tenerife as a foreigner
Complete guide for foreign buyers in Tenerife: NIE, Spanish bank account, taxes, deposit contract, notary and everything we handle under power of attorney.
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Spain does not restrict property purchases by foreigners. A British, German, Dutch, Polish or any other national can buy a home in Tenerife on the same terms as a resident, with only two administrative requirements: obtain a NIE and evidence the source of funds.
What is different for a foreign buyer is the logistical coordination: obtaining the NIE without travelling, opening a Spanish bank account without residency, granting a power of attorney from abroad, and settling the correct taxes depending on whether you are a resident or a non-resident.
NIE, bank account and power of attorney: the logistical foundation
The NIE (Número de Identidad de Extranjero) is mandatory to buy any real estate in Spain. You can apply in person at the Los Cristianos police station or at the Spanish consulate in your country of residence. We obtain it under power of attorney for clients who prefer not to travel: two to three weeks of real turnaround.
Opening a Spanish bank account as a non-resident has become stricter under anti-money-laundering rules. We prepare in advance the bank certificate on source of funds and the CRS declaration that the bank will require.
If you do not travel for signing, you grant a power of attorney in your country (with a Hague Apostille if the country is party to the Convention) and a sworn translation into Spanish. That power lets us sign the deposit, the deed, tax filings and Land Registry entry on your behalf.
Taxes: what a non-resident pays vs a resident
In the Canary Islands, resale housing is subject to the ITP transfer tax at 6.5%. New-build housing is subject to IGIC (7%) plus stamp duty (AJD) at 1%. These purchase taxes are the same for residents and non-residents.
The relevant difference is the ongoing taxation: as a non-resident owner you must file form 210 every year (imputed real-estate income) and, if you rent the property, tax the gross income at 19% (EU/EEA residents) or 24% (rest). At resale, 3% of the price is withheld as an advance payment of non-resident income tax.
Common mistakes made by foreign buyers
Signing the deposit contract before the NIE is issued and then being unable to close within the agreed deadline. Accepting the estate agent's contract without legal translation — not a literal translation — and unknowingly waiving the right to withdraw. Buying through a foreign company believing it reduces tax, when it actually increases the Canary Islands tax burden. Transferring funds without a clear paper trail, which the notary will refuse at signing.
At Tenerife Legal Services we accompany foreign buyers from the first contact through to the handing over of keys, in Spanish, English, German, Dutch or Polish. You can also consult our dedicated page: Property lawyer in Tenerife.
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