Is buying a house in Tenerife a good investment or an expensive dream?

Tenerife isn't called the "island of eternal spring" for nothing. With temperatures that fluctuate around 22 to 28 degrees Celsius year-round, daily flights from all over Europe, and a property market that has seen significant appreciation in recent years, you can understand the appeal. But is buying there also a sound financial decision?

Why buy?

The figures are tempting. Property prices in Tenerife have risen by an average of 8% per year in recent years. An apartment that sold for €200,000 two years ago is now worth around €250,000 – a significant capital gain. Furthermore, the average price per square meter in the south, around Costa Adeje, is between €3,000 and €5,000 – still affordable compared to similar European coastal destinations.

Purchase costs are also more favorable than in Belgium or France, for example. The transfer tax (ITP) is only 6.5% for existing homes and 7% for new constructions. All told, you can expect approximately 8 to 10% in additional costs, which is lower than in many other countries. Notary fees and registration duties are also significantly lower.

And then there's the rental potential. Tenerife has a year-round tourist season—no real summer or winter break like on the mainland. This makes renting through platforms almost continuous, which can generate an attractive passive income when you're not there yourself.

Of course, there are many new developments on this last point since the new legislation on holiday rentals, but more on that in another blog.

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