Relocations to Tenerife: taxes, rent, cost of living

With a population of nearly 1 million and an area of just over 2,000 square kilometers, the island of Tenerife is the largest and most populous of the Canary Islands.

Santa Cruz de Tenerife is the capital of the island and the most important city in this Spanish archipelago. Located in the northeast, Santa Cruz de Tenerife is a cosmopolitan city with lots of attractions and amenities, restaurants, and clubs. Of course, it also has a characteristic promenade, called Rambla de Santa Cruz, entirely in the shade and surrounded by native vegetation.

The island has two international airports with direct flights to and from major European cities. Tenerife North Airport is 11 km from Santa Cruz de Tenerife, while Tenerife South Airport (Reina Sofia) is 60 km from the capital.

Why move to Tenerife?

Moving to Tenerife is an investment in one’s personal health and well-being; in fact, the primary reason for moving to this island is the extraordinary quality of life here.

Advantages of living in Tenerife

• absence of pollution;
• the sea and beautiful beaches;
• zero mosquitoes;
• efficient services and amenities;
• absence of crime;
• warm, welcoming locals;
• a “slow” lifestyle;
• low taxes for retirees with private pensions and entrepreneurs.

The benefits listed above are just some of the features that make the island of Tenerife truly attractive, not just for a short vacation but also (especially) as a place to live.

In addition, residents of the Canary Islands are entitled to special discounts ranging from 50% to 75% off public transportation: buses, ferries, and flights to Spain.

Climate

The island of Tenerife, along with Lanzarote, Fuerteventura, Gran Canaria, and the smaller islands are often referred to as the “islands of eternal spring”. And indeed, the climate on the Canary Islands is in fact one of the most rewarding factors for those who move here.

Temperatures range between 18 and 25 degrees Celsius year-round (there are no other seasons), so you will never need to wear a winter coat or turn on the heater. Humidity is almost non-existent in Tenerife, a welcome absence that results in a marked improvement in health and mental and physical well-being.

The temperature of the water is mild and allows for year-round swimming; however, it isn’t as warm as the Mediterranean Sea: after all, it is the ocean.

Safety

The sense of safety that distinguishes the island of Tenerife is another good reason to consider living in the Canary Islands: law enforcement is always present and takes action quickly when necessary.

You will be able to safely go out at night without any worries and you can even leave your front door unlocked as theft is practically unheard of.

Rental homes in Tenerife

To start the bureaucratic process of tax residency in Tenerife, the first step is to sign a long-term home rental contract, that is, a regular lease of at least 12 months, which must then be registered with the relative municipality.

The average long-term rent for a furnished and equipped apartment in a good location starts at €800-900 per month, which varies depending on the specific neighborhood, among other things. Tenerife South, being a very touristy area, is generally more expensive than Tenerife North.

The more touristy areas, such as Costa Adeje, Los Cristianos, and Playa de las Americas, are undoubtedly the most popular but also the most expensive in terms of rental houses in Tenerife.

The search for a rental property is an activity that needs to be clearly defined and planned before departure in order to avoid viewing houses and apartments that are misaligned with your needs and consequently wasting time.

In this regard, REFRAMED organizes targeted, custom-tailored real estate trips, led by employees with a car who are real estate experts. This is the first real step toward relocating to Tenerife.

Pension taxes in Tenerife

The Canary Islands, and thus also Tenerife, benefit from special tax breaks due to their “disadvantaged” location compared to mainland Spain. These tax breaks give the islands the category of Z.E.C. or “Zona Especial Canaria”.

The Canarian tax system provides a number of specific benefits for the islands of the archipelago and their residents, including foreigners with private pensions. The tax rate applied to the gross pension depends on the amount of the pension itself, organized into increasing tax brackets.

The exact calculation, however, also depends on other factors. In fact, the tax system in the Canary Islands is complex and includes multiple tax deductions, based on family size, age, etc.

To find out exactly how much your private pension will be taxed in the Canary Islands, you’ll need to consult a tax professional who is up-to-date with respect to the Canary Islands fiscal code, which can change from year to year.
 

Healthcare in Tenerife

Public healthcare in Tenerife is excellent and fast. Medications for chronic illnesses are loaded directly into health cards so that medical bureaucracy is streamlined and hospital facilities are modern and have state-of-the-art equipment.

How to move to Tenerife

The transfer of tax residency is a bureaucratic process to be initiated once a home to rent (or buy) has been found. Once you are a tax resident of Tenerife, thanks to the existing bilateral agreements between your country and Spain, your pension or business investment could be subject to local taxation.