Everything you need to know about property investment in Spain

Investing in Spanish property remains a popular choice, both for people looking for a second home and for investors seeking profitable opportunities. Here's everything you need to know about the buying process, regulations, requirements such as the NIE number, and the key developments for 2026.

1. Why invest in Spanish property?

Spain's property market offers a range of advantages, including a mild climate, strong tourist appeal and consistently rising property prices. The Costa Blanca closed 2025 with average price growth of over 10% year-on-year, peaking at 18% in the city of Alicante; for 2026, analysts expect more moderate but still healthy growth of around 4 to 8%. Demand for rental properties also remains high in tourist areas, giving investors the chance to benefit from both capital appreciation and rental income.

2. Key documents and requirements: the NIE number

An NIE number (Número de Identidad de Extranjero) is essential for foreigners looking to buy property in Spain. It's required for all financial transactions, such as opening a bank account, signing property deeds and paying taxes. You can apply for an NIE number through a Spanish consulate in your home country or directly in Spain at a police station.

Get in touch with us for help obtaining an NIE number.

3. Legal and financial aspects: mortgages and taxes

Non-residents in Spain can take out a mortgage covering up to 60-70% of the property's value. Interest rates vary depending on your status and the property's location. Alongside the mortgage, several taxes apply:

• Property transfer tax (Impuesto de Transmisiones Patrimoniales - ITP): for resale properties, this tax ranges between 6-10%, depending on the autonomous region.
• VAT (Impuesto sobre el Valor Añadido - IVA): for new-build properties, the VAT rate is 10%.
• Notary and registration fees: these costs are usually between 1-2% of the purchase price.

You'll also pay annual property tax (Impuesto sobre Bienes Inmuebles - IBI), which varies by municipality and is calculated based on the property's cadastral value.

Tip: hiring a local lawyer experienced in Spanish property transactions can help you navigate these legal and financial aspects.

4. The buying process: step by step

1. Preparation: obtain an NIE number and open a Spanish bank account.
2. Property selection: search for a property that meets your needs and carry out a thorough inspection.
3. Reservation agreement: sign a reservation agreement and pay a deposit (usually 10% of the property price).
4. Legal checks: have a lawyer verify the title deed and check for any outstanding charges.
5. Transfer of ownership: confirm the transfer at the notary, pay the remaining amount and register the property.

Tip: make sure all documents are correct and that there are no outstanding debts or legal disputes relating to the property.

5. The end of the 'Golden Visa' programme

The Golden Visa programme, which since 2013 granted foreign investors a residence permit in exchange for a minimum investment of €500,000 in Spanish property, was formally abolished on 3 April 2025. No new applications have been accepted since then, though anyone who obtained the visa before that date can still renew it. The Spanish government made this decision in response to mounting pressure on the housing market, particularly in cities such as Barcelona and Madrid.

This doesn't mean investing in Spanish property has become less attractive — only the automatic right to a residence permit tied to a purchase has ended. Still considering an investment and want to know which options remain open? Get in touch with us for personal advice.

6. Taxes for non-residents

Non-residents who own property in Spain must pay tax on rental income and any capital gains on sale. For rental income, EU/EEA residents pay 19% on net income (after deductible expenses), while non-EU nationals pay 24% on gross income, with no right to deduct costs. You're also required to file an annual declaration for property tax (IBI) and any other applicable local taxes.

Tip: it's advisable to hire a local tax advisor to ensure you meet all tax obligations and can benefit from any available deductions.

7. Outlook for 2026 and beyond

Regulation around short-term rentals continues to shift. Since July 2025, a mandatory national registration number (NRUA) was required for anyone letting property through platforms such as Airbnb or Booking.com, but Spain's Supreme Court struck down this national registration requirement on 20 May 2026. The annual information return for those who already hold an NRUA number still applies, however. More important for investors: regional authorities in popular coastal areas such as the Costa Blanca, Mallorca, Málaga and Barcelona are introducing increasingly strict rules of their own, with licensing requirements (VUT) that vary by region. Sustainability also remains a growing theme, with increasing focus on energy efficiency in new builds and renovations. These developments aim to stabilise the property market and strike a balance between investment and the needs of local residents.

Investing in Spanish property offers plenty of opportunities, but it's essential to stay informed about current regulations and upcoming changes. Want to know more about the best investment options and how to make the most of the current market? Get in touch today with our team for professional advice and access to the best property opportunities in Spain!