Why Invest in a Property on Tenerife? These Are the 6 Main Reasons!
Buying property has always been considered one of the safest and most stable investments. Today, there are countless opportunities to invest abroad – be it Dubai, Bali, Cyprus or other attractive destinations. With such a variety of choices, the decision-making process can be challenging. Which destination will offer not only a beautiful setting, but also a stable market and long-term growth in property values?
One such place is Tenerife – the island of eternal spring, which is gaining more and more attention not only from tourists but also from investors from all over the world.
Why has Tenerife become a real estate hit? What makes this Canary Island such an attractive destination for those who want to safely save their money while enjoying life by the ocean?
Reason No. 1: A Stable and Growing Real Estate Market
Tenerife has become one of the most attractive destinations for property investors in recent years. Real estate prices have been rising steadily, increasing by more than 17% year-on-year in 2024, demonstrating the strong demand and attractiveness of the island. Despite this, affordable properties can still be found in Tenerife, whether they are smaller apartments, holiday villas or investment flats.
The reason for this growth is not only the limited supply of land for building, but also the increasing interest of foreign buyers. Investors from Germany, the UK and Scandinavia see Tenerife as a safe haven for their capital. As real estate here is not overvalued like in some other tourist destinations, Tenerife is an ideal place for investment with a long-term perspective.
Reason No. 2: Profitable Short-term Rentals
One of the main reasons why investors choose Tenerife is the possibility of renting out their property when they are not on the island. The island attracts millions of tourists each year who are looking for accommodation in apartments away from the large hotel complexes. Thanks to platforms such as Airbnb and Booking.com, properties can be easily and safely offered for holiday rental, generating higher returns than long-term renting. In addition, there are a number of companies on the island that can take care of apartment management, including rentals.
However, if you prefer to have a stable income, it is not a problem to find a reliable tenant for long-term housing as well. In 2024, rental prices increased by 12%, which only confirms the growing interest in living on the island.
Reason No. 3: Year-Round Tourist Season
Unlike other tourist destinations where the season lasts only a few months of the year, Tenerife offers a year-round influx of visitors. Thanks to its pleasant climate, with average temperatures of around 25°C throughout the year, the island is not dependent on the summer months.Tourists come not only in the summer but especially in the winter months when Europe struggles with freezing weather. This means stable rental income all year round.
Reason No. 4: A Favorable Tax System
The Canary Islands have a different tax system to mainland Spain, which is a big attraction for investors. The local value-added tax (IGIC) is only 7%, whereas in the rest of Spain the VAT is 21%. This means significantly lower costs when buying and operating a property.
In addition, there is also a lower corporate income tax of only 4%. This makes Tenerife attractive not only for short-term investors but also for those who want to set up a business or permanent residence here.
The lower tax burden is also reflected in everyday life on the island. Prices in restaurants are often more affordable than in most of mainland Europe, and the same applies to tobacco products, which can be up to half the price here.
Reason No. 5: Lifestyle and Quality of Life
Buying a property in Tenerife is not just about the financial returns, but also about the opportunity to enjoy a unique and relaxed lifestyle. The island offers clean air, beautiful nature, great food, and a friendly atmosphere. In contrast to the hectic life in big European cities, people here live at a relaxed and slower pace.
Tenerife’s excellent weather conditions make it a popular destination for expats, digital nomads, and seniors looking for the perfect place to live. Excellent infrastructure, international schools, and affordable healthcare make Tenerife the perfect place not only for investors but also for families looking to combine business with a high quality of life.
Reason No. 6: Strong Investment Potential for the Future
Tenerife is a destination with a bright investment future. Rising property prices, high rental demand, and a year-round tourist season give investors the assurance of stable returns.
In addition, the infrastructure is constantly being developed, new apartment complexes are being built and more projects are in the pipeline, making the island even more attractive. Despite the rising prices, there is still room for investment appreciation and therefore now is the ideal time to buy a property.
If you are thinking about buying a property in Tenerife, now is the time. Just choose the part of the island that suits you and the type of property – we’ll take care of the rest!
