Whether you’ve moved to Tenerife full time, own a holiday home here, or just rent out your place when you’re away, Spain wants a slice of the pie and yes, that includes the Canary Islands. Don’t worry though, this isn’t a lecture. Here’s what you actually need to know about taxes in Tenerife, written like a real person (not a robot).
👤 Are You a Resident or Not? (It Changes Everything)
Before anything else, Spain needs to know if you’re a resident or non-resident for tax purposes. This matters a lot.
You’re a tax resident if you live in Spain more than 183 days in a calendar year, or if your main life (job, house, family) is based here.
Everyone else? You’re a non-resident; you’ll only be taxed on income or property from Spain, not worldwide stuff.
💰 Everyday Taxes That Might Affect You
🧾 Income Tax (IRPF – for Residents)
If you live in Tenerife most of the year and earn money (salary, pension, rental income, etc.), you’ll need to file a Spanish income tax return.
Rates go from around 19% up to 47%, depending on how much you make.
Returns are filed once a year, usually between April and June.
If you’re self-employed (an autónomo), expect quarterly payments too.
🏡 Income from Property (IRNR for Non-Residents)
Don’t live in Spain full time but rent out a place in Tenerife? That’s taxable.
If you live in the EU/EEA, you pay 19% on net income (what you earn minus allowed costs).
Everyone else pays 24% on gross rent (no deductions allowed).
File this using Modelo 210, usually before December 31.
💼 Wealth Tax (Only If You’re Pretty Wealthy)
If you’re sitting on assets worth over €700,000 (not including your main home), this may apply.
The Canary Islands have some of the best discounts in Spain, many people don’t end up paying.
Still, it’s worth checking yearly if your property value or savings go up.
💵 Capital Gains
Selling a home, shares, or anything valuable? If you made a profit, Spain wants a piece.
Rates start at 19% and go up to 28% depending on how big your gain is.
You might avoid some of this if you reinvest into another main home.
📝 Modelo 720 – Declaring Foreign Assets
Live in Tenerife but have money or property abroad worth over €50,000? Spain wants to know.
You must declare this with Modelo 720 by March 31 each year.
Fines for ignoring this form are serious, so don’t skip it.
🏘️ If You Own Property in Tenerife
🏠 IBI – Local Property Tax
If you own a home here, you’ll pay this yearly to the local town hall.
It’s based on the property’s official cadastral value, not market price.
Think of it like council tax in the UK, just less predictable.
📈 Plusvalía Tax
When you sell a property, this local tax hits you for the rise in land value since you bought it.
How much you pay depends on where the home is, how long you owned it, and other fun calculations the town hall uses.
👨🔧 Running a Business or Freelancing in Tenerife
If you’re self employed, you’re known here as an autónomo, and yes, taxes apply.
You’ll pay monthly social security (even if you make no money).
You also file quarterly income tax returns (Modelo 130).
If you sell goods or services, you’ll charge IGIC (the Canaries’ version of VAT).
💡 Wait… What’s IGIC?
Unlike mainland Spain, which uses VAT (IVA) at 21%, the Canary Islands use IGIC, a much lower tax on sales.
The standard rate is 7%, but it can be as low as 0% for basic stuff.
Businesses collect it from customers and send it to the tax office every 3 months.
📅 Key Deadlines at a Glance
| Tax/Form | Due Date |
|---|---|
| IRPF (Residents) | April–June |
| Modelo 210 (Non-residents) | By December 31 |
| Modelo 720 | By March 31 |
| IGIC + Autónomo Taxes | Quarterly (Jan, Apr, July, Oct) |
🧠 A Few Quick Tips
If you’re unsure, get a local gestor (tax adviser). It’s worth it.
Keep every receipt, rental contract, or invoice. Spanish tax inspectors love paper trails.
Double check what’s regional vs. national. The Canaries often have better deals.
Don’t ignore tax letters, even if they’re in Spanish and scary looking.
