So the legalities have all been done and now you are the owner of your very own property in Tenerife! Whether you have bought the property to use as an occasional holiday home or whether you are planning to relocate and live full time on this beautiful island: either way, the benefits are endless!
This can be your own home from home with bountiful sunshine all year round, temperatures never really dropping much below 20º and that 365 days a year holiday feeling – and it’s all yours whenever you want it!
However, the vino may be free-flowing and the sun is shining but there are always costs involved in maintaining a property, no matter where you are. Luckily for us in the Canary Islands we have a very low VAT rate of only 7% – this is known as the IGIC.
To give you a rough idea of maintenance costs, here is a guideline based on a one-bedroom apartment in Playa de las Américas with a value of €100,000:
- Water: This is meter-based and costs approximately €1.50 / m3.
- Electricity: There are different tariffs available but you’ll be looking at roughly €60 – €80 per month to cover both water and electricity.
- Community fees: These are only applicable if you have bought a property on a residential or touristic complex. These fees cover things like swimming pool cleaning and maintenance, gardening, lifts, staff wages, communal lighting and garages. Not all complexes have the same facilities so these can vary greatly, from a basic fee of around €20 a month up to €150 a month on a complex with more facilities.
- Rubbish Collection: These costs can also vary considerably depending on which municipality your property belongs to but you can expect to pay around €10 a month. And you may also be pleasantly surprised that rubbish collection is a daily occurrence here in Tenerife – not every 1 – 2 weeks like in the UK!!!
- IBI Tax: This is the closest to the old “rates” tax in the UK. It is paid directly to the local authority and is based on the rateable value of your property as per the national property register, or the “catastro”. The key factors are the age, the location and the size of the property so if you own a villa in Costa Adeje you will pay considerably more than if you own a one bedroom apartment in Los Cristianos.
- If you are a non-resident (your main home is still in the UK) then you are obliged to pay an annual non-resident tax. This tax is calculated based on the cadastral value of the property. This value can be found on the IBI receipt and is multiplied by 1.1% to get the base rate and this amount is then multiplied by 24.75% to get the amount of tax payable.
- Home Contents and Buildings Insurance: There are many insurance companies in Tenerife with offices and agents who speak English and most of them offer the written policies in English too. It’s always best to shop around for the best quote but you can expect to pay anything from around €150 to €450 a year, obviously depending on the amount you want to insure.
On the whole, the cost of living in Tenerife is cheaper than that in the UK, plus the quality of life is excellent here. Congratulations – you’ve made the right decision!!