TENERIFE TAXES

Registration and costs for the acquisition of real estate is about 8% of the value of the object and 10% in the case of a mortgage loan.
IGIC - (Impuesto General Indirecto Canario) Value Added Tax (VAT) for residential real estate is 7% of the cost, for commercial real estate and for land plots 16% of the cost. IGIC (VAT) is paid if you buy a new home from the developer.
ITP - (Impuesto sobre Transmisiones Patrimoniales) Property transfer tax is 6.5% of the cost. Paid if you buy a secondary housing.
AJD - (Actos Juridicos Documentados) Tax on documenting legal acts. It is 0.75% of the property value. Tax is paid if you buy a new home.
IIVTNU (Plusvalia) - (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana) A tax on the increase in the value of urban land. Local city tax paid by the seller of real estate. The tax rate is determined by the mayor’s office (Ayuntamiento).
The cost of registration in the Spanish State Property Register (Registro de la Propiedad Espana). The amount depends on the price of the object, an average of 200-600 euros.
Notary fees amount to about 600-1000 euros.
When making a mortgage loan, the bank’s commission is 1-2% of the amount provided. Compulsory real estate insurance, if the mortgage, per year on average is 150-500 euros. Object valuation - determining the market value, an average of 350-500 euros.
Alien ID Number - NIE
When buying any real estate, land, vehicle, yacht, boat or ready business, the first thing you need to do is to issue a NIE.
NIE - (Numero de Identidad de Extranjero) - identification number of a foreigner, issued by the National Police in accordance with Spanish law. The number that is assigned to you is unique and will never change, even if you change the last name. Required to pay taxes, to carry out any financial activity, when opening a bank account, when registering a company, during any serious purchase of objects (Tenerife property purchase, yachts, cars), when entering into any phone contract, utility bills, insurance . An foreign person who does not have a residence in Spain can receive an NIE only on the basis of the acquisition of real estate or business activities. It is possible to issue NIE in Tenerife either independently or through a trustee.
Annual taxes on Tenerife
IBI - (Impuesto sobre Bienes Inmuebles) Annual property tax. Real estate owners pay this tax once a year. The tax rate is 0.5-2% of the cadastral value of the property, but the amount of tax also depends on the area and type of housing.
Vehicle tax
IVTM - (Impuesto sobre Vehiculos de Traccion Mecanica) Vehicle tax, payable once a year, averages 100-150 euros.
Profit tax of non-residents
IRNR - (Impuesto sobre la Renta de no residentes, declaracion ordinaria) The tax on the income of non-residents of Spain from the rental of real estate. Paid annually by homeowners, even if you do not give anything and do not make a profit. The rate is 23-25% of the profits. In another case, the tax form-210 is filled in. To perform this procedure, it is better to entrust the accounting firm (Acessoria) to calculate taxes.
Business tax
IAE - (Impuesto sobre Actividades Economicas) Tax on the economic activities of individuals and legal entities. The tax rate depends on the type of activity.