Rent out property in Tenerife

Do you want to rent out property in Tenerife? Then you should be aware that it is somewhat complicated in Tenerife. The type of rental allowed depends on the duration of the rental and the location of the property.

Duration of the rental period

Short term

Renting out property in Tenerife with short-term contracts: (contrato de arrendamiento por temporada) normally run for three or six months, up to a maximum of one year. Whatever the duration of the contract, the conditions are binding for both parties and there is no notice period because both parties have to respect the entire contract period.

However, it is important to note that short-term contracts are in no way intended for ordinary residential purposes. They are contracts for a specific purpose, e.g. temporary traineeships, study, etc., and not for the usual habitual principal place of residence. The tenant’s main residence must be specified in the contract (e.g. home address in the UK). Nor can they be used for tourism purposes. The government (Turismo) says that such a contract of less than three months will be considered by the government as touristic, and fines are imposed on owners for offering such illegal contracts.

Long term

Renting out property in Tenerife with long-term contracts: (contrato de arrendamiento de vivienda) are valid for a minimum of one year and are broadly similar to a classic lease. The tenant is highly protected by law, including the right to extend the contract for 5 years, and then again for 3 years, with rent increases less than or equal to the inflation rate. Also read our blog article on long-term rentals in Tenerife.

Location of the property

The legal and registered location of the property is determined by its location in an area and not by the regulations of a complex, the view or your own interpretation. The knowledge of the exact legal location is decisive to know whether the property is coloured residential, touristic or both.

Residential

You can rent it out with a long-term contrato de arrendamiento de vivienda. (see explanation above).
You can rent it out on short term with a contrato de arrendamiento por temporada (see explanation above).
You can rent it to tourists under the legislation in force of the vivienda vacacional. This vivienda vacacional (VV) must be located in a non-touristic area, and owners must have made a declaración de responsable. This is a set of documents, legally binding official statements and compliance with legal requirements. In addition, owners must be registered with the IGIC and charge it on all invoices for all rentals and submit quarterly IGIC declarations. If the regulations of the joint owners (community) state that no rental is allowed, then of course you cannot rent out. Violations of the VV-regime are defined as “very serious”, and are also fined with fines of € 30.000 to € 300.000. An example of a residential coloured area is the village of Palm-Mar.

Touristic

You can rent it out with a long-term contrato de arrendamiento de vivienda. (see explanation above).
You can rent it out on short term with a contrato de arrendamiento por temporada (see explanation above).
You can rent it to tourists, but only through the “only (unique) agency system”. This means that there is only one agent or office that is allowed to do the rental in the complex and that is designated and authorized to do so. Private rental for tourist purposes is therefore forbidden if your property is coloured as touristic. Understand who may, but this is the law at the moment. Fines are between €1.500 and € 30.000. An example of this is Parque Santiago 3 or 4 in Playa de Las Américas.

Zona mixta

If your property is coloured as Residential-Touristic, we cannot give you an answer. The law is unclear as to what you may or may not do…

Obligations

Don’t forget that as an owner of real estate in Tenerife you have to meet a number of obligations:

You must declare the income from the rental in the UK.
There are tax consequences in Tenerife and you also have to pay the tax for non-residents every year.