Buying property in Spain complete guide for investors
Buying property in Spain continues to attract investors who want reliable returns, a second home or a combination of both. Spain offers sunshine throughout the year, beautiful coastal areas, strong cultural appeal and a lifestyle that attracts millions of visitors and residents. These qualities create a solid foundation for long term real estate opportunities.
Spain’s academic, economic and tourism growth has helped the country become one of the most appealing places in Europe for buyers exploring buying property in Spain as an investment strategy.
1. What are the requirements to buy a property in Spain
The requirements for buying a property in Spain will depend on your financial situation and your objectives when buying.
If you are an investor who can pay for the property without a mortgage, it will be essential to have an identity document that proves you are of legal age (DNI, NIE or passport), legal capacity to enter into contracts (in this case, the purchase contract) and sufficient funds.
In the event that you need or prefer to take out a mortgage, these requirements are, in addition to other necessary documents that the bank will probably ask you for, such as a risk report – the latest income tax return, an up-to-date employment record and recent bank statements. If you are an employee, the bank will also require your employment contract and the last three pay slips.
2. How much tax do you pay when buying a property in Spain
Spanish tax residents who rent out a property must report the rental income in their annual IRPF return. The tax is calculated according to the total taxable income of the owner, since IRPF applies a progressive scale. Deductions apply when the activity qualifies as long term residential rental, and the rules depend on the region of residence.
Non residents who are tax residents in another country of the European Union or the European Economic Area must pay Non Resident Income Tax on rental income from Spanish property at a rate of 19%. The tax applies to net income, which means they can deduct the expenses that Spanish law accepts as directly linked to the rental. The income is normally declared through Modelo 210.
Non residents who are tax residents outside the European Union or the European Economic Area are generally taxed at a rate of 24% on rental income under the same Non Resident Income Tax. A ruling of the Audiencia Nacional dated 28 July 2025 clarified that these owners can also deduct necessary and directly related rental expenses if the tax treaty between Spain and their country includes a non discrimination clause. This allows many non EU or non EEA investors to calculate the tax on net income rather than gross income.
3. How to find a property in Spain?
Finding a property in Spain can be done in several ways.
One of them is to go to a real estate agency, which has been the traditional method. The real estate agent will review the properties in their portfolio for sale and select those that meet the criteria indicated by the person interested in buying.
However, for several years now, the most widely used method in Spain to find a property has been the use of web portals such as Idealista, Fotocasa and Habitaclia, among others. These portals offer a very broad portfolio of properties that can be filtered by different criteria, such as price, square metres, rooms or others.
4. Where to buy property in Spain
While all areas of the country offer good opportunities, it is also true that some areas offer better options, and the individual preferences of the investor must be taken into account.
The main cities and their surrounding areas are usually the best options, as they have a lot of dynamism and economic activity, accompanied by high rates of tourism.
The main cities where to buy property in Spain are Madrid, Barcelona, Valencia, Seville, Malaga and Mallorca, many of which can guarantee a good return on investment.
Madrid
Madrid is the capital of Spain and attracts millions of tourists and citizens from all corners of the world, who come to the city to study or to work.
Its economic potential, together with its cultural and business activity makes it very attractive for this type of investment. Currently, the average price is 4,200€/m2, but keep in mind that prices in different district can vary significantly.
Barcelona
Barcelona is Spain’s other major economic, tourist and cultural powerhouse. Millions of tourists visit the city every year, and it attracts a multitude of talent from other European countries and the rest of the world. The good climate, the beach, the modernist architecture and the city’s own atmosphere make Barcelona one of the most attractive cities in the world. The average price is 4,500€/m2-5000€/m2.
Valencia
Another major city in which to invest in property is Valencia. The city is one of the main attractions in terms of tourism, both national and international, due to its endless kilometres of beach. The average price is 2,180/m2.
Seville
Seville, as the third most populated city in Spain and the capital of the largest autonomous community of the country (Andalusia), is one of the favourite destinations to buy a property in Spain. Its climate, economic dynamism and city life make it very attractive for the real estate sector. The average price is 2,315€/m2.
Malaga
Malaga is one of the main cities in the south of Spain, with a good climate, stunning beaches and an enviable lifestyle. It also has a great artistic and cultural heritage. The average price is 3,220 €/m2.
Mallorca
Palma de Mallorca, the capital of the Balearic Islands, has always been one of the main tourist destinations for both Spanish and other European citizens, mainly because of its beautiful beaches and nightlife. The average price is 4,300€/m2.
5. What are the pitfalls of buying property in Spain?
When buying a property, whether in Spain or elsewhere, a series of aspects should be reviewed to avoid potential future problems.
Firstly, it is necessary to find out if the property we are going to buy has any type of debt associated with it.
One of the biggest problems, although not very common in Spain, is properties that have been purchased but have not been finished or even built.
To avoid this type of inconvenience, at least the most obvious ones, it is necessary to check that the company from which we bought exists and that the building permit has been granted by the Town Hall.
In addition, we can ask for documents certifying that, in the event that the property is not built, the money already paid will be returned.
Some tips to avoid further complications are: do not sign a contract that you do not understand and hire a translator if the agreements are reached in a language that is not your own.
6. Why buy property in Spain
Buying a property in Spain is definitely a good idea.
Firstly, for economic reasons, as the return on investment in property in Spain can reach 10%.
Secondly, if our idea is not to invest but to take the property as a second home, there are many other reasons.
The climate, the cultural diversity, the modern infrastructures, its privileged position with good land, sea and air communications, the healthy lifestyle and its geographical diversity, which includes both the beach and the mountains within a few kilometres of any part of the country in which the property is located, are some of the main reasons that invite you to buy a property in Spain.
Furthermore, Spain has some of the most cosmopolitan cities in the world, such as Madrid and Barcelona. Not forgetting such thriving cities as Valencia, Seville and Malaga.
In case you are new and still deciding where to buy property in Spain, and you are new to the short-term rental market, check our rental calculator to calculate the daily rental rate of your property.
7. Can foreigners buy property in Spain
Yes, both foreigners from EU and non-EU countries can buy a house in Spain, as Spain is not a country that places restrictions on property rights.
In fact, for some years there have been incentives for foreigners to buy homes.
8. Is it worth buying a property in Spain
Recent figures show that the Spanish property market remained strong through 2024. Nationwide house prices increased by around 7% in the first half of the year, and new homes recorded growth of more than 10%. Rental prices also rose sharply in many cities with increases of 10% or more due to steady demand and limited supply. More than seven hundred fifteen thousand homes were sold during 2024 which marked a clear rise compared with 2023. These trends point to continued interest from both domestic and international buyers and they help support a solid outlook for long term rental income and capital growth across much of the country. Returns still vary by region so investors should always compare local conditions before making a decision.
9. Is now a good time to buy property in Spain?
Absolutely. The supply of housing in Spain is small compared to the demand. The real estate crisis that Spain suffered 14 years ago left a country with a certain fear of building more housing, so supply has been lagging behind demand, creating an imbalance that now offers good opportunities and attractive returns.
Also, low-interest rates, high expected inflation and high economic growth over the next few years make this a very good time to buy property in Spain.
It should be noted that most rented properties are updated in line with the CPI. Currently, high CPIs are expected, so by buying property in Spain you are protecting your capital from the risk of losing purchasing power due to inflation: the moment there is high inflation, it will be passed on to the rents, which will be the income of the landlord who bought a property in Spain.
10. Invest with GuestReady in Spain
GuestReady has years of experience working with property investors. We know where the best real estate return on investments are and we help investors with insightful information. We also present them with short-term rental management plans for their hassle-free new business.
