My theoretical Tenerife budget!

[benthic]

Dear Tenerife Forum - this is my first post. I'm looking forward to being an active member of the community.

My wife and I are thinking carefully about moving to Tenerife with our young son, who is 2 years old. We've been many times, to all parts of the island, and we love it. We want to try living in the south/west of Tenerife.

Before we take the plunge, I'm trying to figure out about how much our spending is likely to be to sustain a good standard of living on the island. I've done some web surfing, and below I put what I think our major expense items could be (after tax). I would be very grateful for any comments on i) if I'm way off with my estimate, ii) if there are major costs that I am missing, and iii) if there are ways to reduce the costs substantially from my rough estimates.

So here goes:

TENERIFE BUDGET - family of 3 (two adults, one 2 year old), 3 bedroom rented apartment/house, 1 small car, modest spending on food and entertainment

Accommodation: 600 euros/month (estimate from numbeo.com)
Transport/car hire: 500 euros/month (estimate from autoreisen.com, plus I've added a bit for petrol)
Nursery/schooling: 350 euros/month (estimate from Wingate School, plus I've added a bit for incidentals)
Other / general spending: 1500 euros/month (estimated from our average monthly spending on everything else here in the UK)

Total: 2950 euros/month (35,400 euros/year)

What do you all think?

Thanks so much!

[LUCKY]

Interesting site.:flatcap:

http://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=Spain&country2=United+Kingdom&city1=Santa+Cruz+De+Tenerife&city2=Birmingham

Maybe many of our members will have something to add .:flatcap:

[Ricman]

There have been many threads on this subject in the past. Of course, much depends on your personal habits & requirements & it is difficult to generalise.

However, taking into consideration your calculations, I would say you will be perfectly OK with those numbers & there may well be something left in the tin for contingencies e.g. private health insurance.

It would be interesting to know how you would fund those numbers as I guess with a baby you are unlikely to be pensioners & most people here would kill for a job with that sort of remuneration - after the Hacienda have had their cut.

Good luck to you anyway.

[benthic]

Thanks LUCKY

Numbeo is one of my favourite sites. If often look at the comparison between London (my current location) and Santa Cruz or Las Palmas. Sometimes when I'm fantasising about super-early retirement I compare the cost of living in London with the cost of living in India...

Anyhow, looks like www.numbeo.com only have Tenerife data for Santa Cruz, so would be FANTASTIC if those of you in the south of Tenerife could add the data for one of the major expat centres in that part of the island.!!!

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Hi Ricman -

Re: private health insurance - interesting point - is this required? I was imagining that we would be okay with E111 until we qualify for permanent residency. Then we would be covered under the Spanish system, which I had understood to be reasonably good. What's your view?

Yes - finding 35k euros is a challenge, of course. Both my wife and I work for companies here in the UK where we could work mostly remotely as long as we had a good internet connection. So, my next task is figuring out what the tax implications will be if we live in Tenerife whilst remaining employed by our UK firms....

[junglejim]

Your EHIC will not cover you if you are resident abroad , if you are employed in UK you will need private medical cover unless you become self employed in Tenerife and contribute to social system - if you don´t pay in you don´t get anything -also a couple of useful sites for you to look at .
Internet is around €42 per month with speed around 2- 5 MBs depending on where you live - fibre optic is coming to south but don´t hold your breath!


http://diana-mcglone.com/

http://www.nhs.uk/NHSEngland/Healthcareabroad/EHIC/Pages/about-the-ehic.aspx

[benthic]

okay great - thanks junglejim

So, looks like we may well need to add (to the budget) private medical insurance for the family.

Say 50 euros/month would cover medical/dental for the 3 of us?

I'm finding it difficult to find a quick and easy reference/quote on the web for our particular situation, so we'd love to hear any insurance ranges for people that are paying for it in Tenerife.


Regarding the internet - thanks for the useful numbers. More than what we are paying here in London, but I think we can still cover that in the 'other' category of our budget.

[golf birdie]

insurance will be a minimum of 120€ a month and you will still need to pay most of the dental costs.

[bonitatime]

Friends who work remotely have recently changed from working in Spain to working in the UK although they live here. Because if costs for social security etc it was a big saving

[benthic]

Friends who work remotely have recently changed from working in Spain to working in the UK although they live here. Because if costs for social security etc it was a big saving

Hi bonitatime - you're saying that you think a Canary domiciled person with UK income tax and NI deductions on GBP income will be less than an equivalent EUR salary paid that was liable for the spanish income tax and equivalent NI deductions? That's interesting. Any idea the approx saving overall? 5%, 10%? (depends on level of income, I guess, but say £25,000)

Also on the topic of tax. If we rent an apartment/house privately, what are the taxes in Tenerife that we might have to pay that would be equivalent to council tax here in the UK? Anybody know?

Thank you!!!

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Friends who work remotely have recently changed from working in Spain to working in the UK although they live here. Because if costs for social security etc it was a big saving

Hi bonitatime - you're saying that you think a Canary domiciled person with UK income tax and NI deductions on GBP income will be less than an equivalent EUR salary paid that was liable for the spanish income tax and equivalent NI deductions? That's interesting. Any idea the approx saving overall? 5%, 10%? (depends on level of gross income, I guess, but say £25,000)

Also on the topic of tax. If we rent an apartment/house privately, what are the taxes in Tenerife that we might have to pay that would be equivalent to council tax here in the UK? Anybody know?

Thank you!!!

[bonitatime]

http://felixmaocho.wordpress.com/2013/07/02/no-seas-tonto-crea-tu-empresa-en-inglaterra-y-no-en-espana/

Is a blog comment where it's talked about
You will need to translate
If you need an accountant to comment. Will ask but I have no idea about how much you save but the autonomo payment here is a lot and not related to how much you earn

House tax varies, Adeje is expensive and for a 2 bed flat we pay about 250€

[Tom & Sharon]

Won't your "council tax" be covered in your rent?

If not, it can be fairly expensive. We pay almost 700€!

Also, why would you spend 6,000€ a year on hiring a car? Why not buy one?

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Won't your "council tax" be covered in your rent?

If not, it can be fairly expensive. We pay almost 700€!

Also, why would you spend 6,000€ a year on hiring a car? Why not buy one?

[junglejim]

http://felixmaocho.wordpress.com/2013/07/02/no-seas-tonto-crea-tu-empresa-en-inglaterra-y-no-en-espana/

Is a blog comment where it's talked about
You will need to translate
If you need an accountant to comment. Will ask but I have no idea about how much you save but the autonomo payment here is a lot and not related to how much you earn

House tax varies, Adeje is expensive and for a 2 bed flat we pay about 250€

Our 2 bed tax on a Touristic Complex is €340 - surely if you are residing in Canaries for more than 183 days you will be a fiscal resident here and liable to pay taxes here and not UK ? I thought the deductions in Canaries would be around 35% in total ? Very confusing !

[doreen]

Our 2 bed tax on a Touristic Complex is €340 - surely if you are residing in Canaries for more than 183 days you will be a fiscal resident here and liable to pay taxes here and not UK ? I thought the deductions in Canaries would be around 35% in total ? Very confusing !

Equivalent of Council Tax is only paid by owners, not tenants in Spain (in UK Council tax paid by all occupiers regardless of whether they own the property)

The 183 days is the general rule, but for someone earning most of their income from outside Spain, the rule of "centre of your economic interests" can be applied - for this you must have a property available to you to at all times to live in, in the UK (so either own a property that you have not let out, or have a full time rental contract in your name in the UK)

[benthic]

Tom & Sharon - Very good point about the car! So, our thinking is that we would rent for at least the first year as we are settling in - mostly to avoid having the hassle of buying/insuring/fixing a car. But longer term, I agree, this could be a significant opportunity to reduce overall expenditure.

In the UK, I've been running a Ford Fiesta for 10 years, which I bought almost new. I am a bit obsessive about budgeting then actually recording expenses, so I know that to run the Fiesta has cost almost £30,000 all-in (purchase price/ petrol - 8k miles per yr / insurance / repairs / tax). So £3000 per year is my benchmark for running a small car per year. In Tenerife I imagine the running costs might be a little less, due to petrol being cheaper, and the fact that I would probably drive a little less overall per year. So, I'm thinking that if I did a budget that included purchasing a car rather than renting one, I could probably almost halve from 6000 EUR to 3000 EUR a year.

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Does 3000 EUR / year (on average) sound about right to people for buying and then running a small car in Tenerife?

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Equivalent of Council Tax is only paid by owners, not tenants in Spain (in UK Council tax paid by all occupiers regardless of whether they own the property)

The 183 days is the general rule, but for someone earning most of their income from outside Spain, the rule of "centre of your economic interests" can be applied - for this you must have a property available to you to at all times to live in, in the UK (so either own a property that you have not let out, or have a full time rental contract in your name in the UK)

Thanks doreen. My partner and I are still somewhat confused about what our optimum tax situation will be. Both of our companies are multinationals that are active in Spain, so we are going to ask them what they recommend...

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And on the topic of cutting down the budget that I outlined in my original message - how do you all feel about Wingate vs. local spanish schools?
My son is almost 2, so I figure if I start him very early in the Spanish system he would be fine. But I really don't have a good feeling about what the spanish schools in Tenerife would be like.
And in terms of costs, I am assuming we would have to pay tax in Spain to be able to use the Spanish educational system. Is this correct?
Is the schooling system completely free? Or are there costs that we would need to budget for?
Thanks everyone!

[paulpaul]

I have a related question - is it possible to be employed at a UK company(perm), and also open a company in Tenerife and hire yourself there(for say 2-3h/day). In this case the rule of "centre of your economic interests" would still apply? That 183 days must be the total number of days that you live in a year in Tenerife?

[junglejim]

We have someone on our complex that has a significant company in UK and a Spanish S.L. for his property portfolio on lettings , he visits here maybe 20 days in year and as far as I am aware pays his Spanish taxes here .

[lynnangela]

You can long term hire a car for 200 euro a month which includes all expenses except fuel of course, message me if you need contact details, but Ashroautos will be a good start

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I have a related question - is it possible to be employed at a UK company(perm), and also open a company in Tenerife and hire yourself there(for say 2-3h/day). In this case the rule of "centre of your economic interests" would still apply? That 183 days must be the total number of days that you live in a year in Tenerife?
If you employ yourself in Tenerife you need to factor in the cost of social security payment, ive no idea how much that is but somewhere between 250 to 400 a month I believe

[doreen]

I have a related question - is it possible to be employed at a UK company(perm), and also open a company in Tenerife and hire yourself there(for say 2-3h/day). In this case the rule of "centre of your economic interests" would still apply? That 183 days must be the total number of days that you live in a year in Tenerife?

I'm not really sure what you are trying to achieve here & which tax system you want to be "in" ... deciding your "centre of interest" (economic & otherwise) can include where your spouse & children live ...

[Tom & Sharon]

I think you're making it more complicated than necessary for now.

If it were me, I wouldn't tell anyone anything at first. You've no need to. Before you go getting involved with lawyers, accountants, the Spanish tax system, autonomo, medical care, residency etc., come over and give it a try first.

You can rent an apartment and try the "working remotely" idea first, say for a period of 6 months initially. At that stage you don't need to start telling official bodies where you are, you can leave everything as it currently is.

You'll be covered for emergency medical cover by your EHIC, or take out a long stay travel policy such as this here:-

http://www.staysure.co.uk/travelinsurance/longstay.php

and your little boy is still too young to need to go to school, so just put him in a private nursery.

It will give you time to try it, see if the idea works for you, see if you like it! Then after that time, you can decide the best way forward for you. You'll know an awful lot more after being here for 6 months.

Don't rush into a system that will be a nightmare to extricate yourself from if it doesn't work.

[paulpaul]

Well my main interest would be to get a mortgage, in about 6 months, and i'm not sure which would suit me better. Plus i do want to open a company there even if i don't get employed to it, prob i'll rent an office. Is this possible?

[LUCKY]

Well my main interest would be to get a mortgage, in about 6 months, and i'm not sure which would suit me better. Plus i do want to open a company there even if i don't get employed to it, prob i'll rent an office. Is this possible?

This link maybe helpful :flatcap:

http://www.islandconnections.eu/1000004/1000036/5/0/property-to-rent-sort-newest.html

[paulpaul]

Ok thanks. It appears most are in Puerto de la Cruz, do you know any site that has in south too?