The investor's guide to Spain

Introduction

Spain attracts thousands of international property investors every year. Whether you're looking to diversify your assets, generate rental income or prepare for retirement in the sun, investing in property in Spain offers a wealth of opportunities. But you still need to know the rules of the game: taxation, legal framework, optimisation strategies, etc. This SEO guide, specially designed for property investment in Spain, answers all your questions.

🏠 Why invest in property in Spain?

  • Madrid: dynamic capital, favourable regulations
  • Barcelona: international metropolis with strong potential
  • Valencia: up-and-coming city, good value for money
  • Malaga & Andalusia: sunshine, economic growth, urban projects
  • Balearic Islands and Canary Islands: high heritage value

Buying property in Spain can be motivated by ..:

  • A second home
  • Long or short-term rental investment
  • An investment in commercial property or coliving
  • Long-term asset enhancement

⚖️ Legal framework for property investment

1. Accessibility for non-residents

  • NIE (Identification Number for Foreigners)
  • Spanish bank account
  • Tax representative

2. Stages in the acquisition process

  1. Property search
  2. Deposit payment (señal / arras)
  3. Legal due diligence
  4. Compromise contract
  5. Notarial deed
  6. Land register registration

3. Notary vs lawyer

The notary authenticates, but the lawyer secures the transaction.

💶 Taxation of property investment in Spain

1. Taxes on purchase

Type of property Purchase tax Other costs
New property VAT 10% + AJD 1-1.5 8-12% miscellaneous costs
Old property ITP 6-10% depending on region Notary and registration

2. Property tax

  • IRNR: 19% (EU) or 24% (non-EU)
  • IBI (property tax)
  • Wealth tax
  • Capital gains on resale (IRPF + Plusvalía)

3. Tax optimisation

Set up a Spanish company (S.L.) and take advantage of the France-Spain tax treaty.

🏢 Types of property investment

  • Long-term rental: stable market, 3-6% profitability
  • Tourist lettings: high profitability, strict regulations
  • Renovation: potential capital gains, local grants
  • Coliving/commercial: new urban trends

⚠️ Mistakes to avoid

  • Neglecting charges and town planning
  • Lack of due diligence
  • Lack of independent legal advice
  • Incorrect assessment of post-purchase costs

📒 Practical advice

  • Appoint a local lawyer
  • Analyse taxation and transfer
  • Use property comparators: Idealista, Fotocasa, etc.

🌐 Investment areas 2025

  • Madrid
  • Valencia
  • Alicante / Costa Blanca
  • Malaga / Seville
  • Balearic & Canary Islands

❓ FAQ - Investing in Spain

Do I have to live in Spain?
No, investment is open to everyone.
Can foreigners take out a mortgage?
Yes, up to 70% financing.
Average rental yield?
3% to 6% (long-term), up to 10% (seasonal).
Taxation on resale?
IRPF + municipal capital gains tax.
Can you invest through a French company?
Yes, but a Spanish company may be more advantageous.

📆 Conclusion

Investing in property in Spain is a profitable strategy if you get it right. Get professional help (lawyers, tax specialists, notaries). LegalImmo Spain offers comprehensive support at every stage of your project.