If you’re considering purchasing property on the island, you may have asked an important question: is Tenerife part of the EU? It’s one of the most common queries among international buyers. The short answer is yes and, for investors, the island’s status within the EU comes with several additional advantages that make it particularly attractive.
Tenerife is part of the Canary Islands, an archipelago that belongs to Spain and is therefore part of the European Union. More specifically, the islands are classified as one of the EU’s outermost regions. For European citizens, this means full access to the rights and protections of the European framework, including freedom of residence, investment, employment and the movement of capital.
Essential Information for International Property Buyers
However, the Canary Islands, and among them Tenerife, also benefit from a distinctive fiscal regime that differentiates them from mainland Spain and the rest of the EU. The islands are not part of the EU VAT territory or its customs area, which allows them to operate under a separate tax system designed to stimulate economic activity and investment.
Instead of VAT, the Canary Islands apply the IGIC (Impuesto General Indirecto Canario), a local indirect tax with a standard rate of 7%. By comparison, the equivalent VAT rate in mainland Spain is 21%. For international property buyers, this difference can represent a meaningful reduction in acquisition costs and improves the overall investment equation.
The Canary Islands also benefit from the Canary Islands Special Zone (ZEC), a unique economic regime within the European Union that offers one of the most competitive corporate tax rates in Europe, currently set at 4%. Combined with the legal certainty and institutional stability of the EU, this framework has positioned the islands as an increasingly attractive destination for international capital.
In practical terms, investing or owning property in Tenerife allows buyers to combine the security of a European jurisdiction with a fiscal environment that is considerably more competitive than many other established Mediterranean destinations.
These advantages have drawn increasing international interest to destinations such as Abama, where many prospective buyers initially arrive motivated by the investment potential of the Canary Islands. Yet once they experience the community that has been created here in Guía de Isora, financial considerations often take a backseat. The resort’s appeal ultimately lies in the unique combination of its natural setting, architecture, and lifestyle. It’s a place that has embodied what it calls The Art of Simplicity.
For those ready to enter the market today, Los Jardines de Abama, designed by the award-winning architectural studio Coderch, is one of the current residential offers within the resort. These luxury two- and three-bedroom apartments are set alongside our Dave Thomas-designed golf course and enjoy panoramic views over the Atlantic Ocean and the neighbouring island of La Gomera. In addition to their residential appeal, these properties are professionally managed as five-star holiday rentals, allowing owners to generate income when they are away.
Looking ahead, an important new opportunity is approaching. From 2026, Abama will launch a new residential phase that will expand the distinctive luxury concept that defines the resort. Designed with a contemporary aesthetic and carefully integrated into the natural landscape, these new properties are already attracting significant attention among European investors. Further details will be announced soon, though interested buyers can already register for priority access before the launch to the wider market.
To summarise: yes, Tenerife is part of the EU and benefits from all the stability and legal certainty that that implies. At the same time, its unique fiscal framework and growing international profile make it one of the most compelling property investments in Europe today. With new opportunities on the horizon, Tenerife is increasingly recognised not only as a remarkable place to live, but also as a strategically sound place to invest.
