Property Investment on the Costa del Sol

The real costs, non-resident taxation and the rules on holiday letting in Andalusia. Figures verified in September 2026, with their sources.

Which country are you investing from?

What you pay in tax and the paperwork you face are completely different from one country to the next. Tell me, and I will answer you personally.

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What you pay on top of the price

In Andalusia the tax depends on one thing only: is the property resale or new build. The other costs are the same either way.

Resale property

Item	Basis	Cost
ITP — transfer tax	On the deed price or the cadastral reference value, whichever is higher	7 %
Notary	Regulated scale, tapering	0.2 – 0.5 %
Land Registry	Registration of the deed	0.1 – 0.25 %
Gestoría	Paperwork and tax filing	≈ €300
Lawyer	Legal checks — optional but recommended	1 – 1.5 %
Budget for	Excluding bank costs if you borrow	≈ 9 to 10 %

New build

Item	Basis	Cost
VAT (IVA)	New home, first transfer	10 %
AJD — stamp duty	Replaces ITP on new builds	1.2 %
Notary, registry, gestoría, lawyer	Same as resale	≈ 1.8 – 2.3 %
Budget for		≈ 13 %

The reduced-rate trap. You will often read that Andalusia has a 6 % ITP rate, or even 3.5 %. True — but only for a main residence, under a value cap, and for specific profiles: under 35, large family, disability. A purchase intended for letting does not qualify: for an investor the rate is 7 %. And the caps are not tapered — one euro over and it is 7 % on the whole amount.

Holiday letting: what you need before the first guest

In Andalusia holiday letting is not something you improvise. The rules have changed three times since 2024, and this is where most owners are unknowingly in breach.

The VUT code

The property must be declared to the Andalusian Tourism Registry through a declaración responsable. You are issued a VUT code: it must appear on every listing you publish.

Your building’s consent

Since 3 April 2025, a property held under horizontal ownership needs the approval of 3/5 of owners representing 3/5 of the shares. A detached villa is not affected.

The town hall can say no

Municipalities may suspend new registrations and require a planning compatibility declaration. Málaga, Seville and Cádiz are actively restricting.

Capacity

Whole property: 15 guests maximum, 4 per bedroom. Room-by-room letting: 6 in total, 4 per room.

The national register no longer exists. The Single Register for short-term lets (NRUA), meant to apply across Spain, was struck down by the Supreme Court on 19 May 2026: the State had no competence to create it. Your Andalusian code is therefore the one that counts. If a provider is still charging you to register nationally, ask them why.

What you will pay on your rental income

This is where your country of residence changes everything — and it is the question I am asked most.

You live	Rate	Taxable base
In the European Union, Iceland or Norway	19 %	Net rent: mortgage interest, IBI, insurance, service charges, repairs, management fees and 3 % depreciation are all deductible
Outside the European Union	24 %	Gross rent. No expenses deductible at all

A Dutch owner and a British owner receiving the same rent do not pay the same tax, nor on the same base. That is the first figure to put into any yield calculation — before you even discuss the purchase price.

Filing. Returns are made on form 210. Rental income is now grouped annually rather than quarterly: the return is filed between 1 and 20 April of the following year. A property that is not let does not escape tax either: the tax office imputes a notional income of 2 % of the cadastral value, reduced to 1.1 % if that value was revised in the last ten years.

When the project goes beyond property

Structuring a purchase from abroad, fitting a property investment into the rest of your wealth, planning succession: that is no longer my trade, it is Paul Fourcade‘s — president of Apex Capital, a wealth management firm focused on the international market, particularly France, the Emirates and the United Kingdom. He works with me and sees clients in Marbella several days a month.

I am not a wealth adviser and I receive nothing for this introduction. I introduce you, you decide.

I want advice from Apex Capital

Holiday let or long term

The real question is not only which one earns more. It is also what each one demands of you.

	Holiday letting	Long term
Observed gross yield	6 to 10 %	4 to 7 %
Authorisation	VUT code + building consent + planning compatibility	No tourism paperwork
Regulatory risk	High: the town hall can freeze new licences	Low
Management	Cleaning, linen, check-ins, messages, incidents — all year	Occasional
Vacancy	Seasonal, high out of season	Between tenants
Wear and tear	Fast, high turnover	Slow

What “gross yield” means. Rent collected over the year divided by the purchase price, before acquisition costs, running costs, management and tax. It is the industry’s usual measure and also the most flattering one: go back to the two tables above to see what is left.

These ranges are what I observe on the Costa del Sol. They depend on the property, its location, the season and the management. No yield is guaranteed, and I am wary of anyone who promises you one.

The day you sell

The 3 % retention

A buyer purchasing from a non-resident withholds 3 % of the price and pays it straight to the Spanish treasury (form 211). It is not an extra tax: it is a payment on account of your capital gain, refundable if the tax due is lower. But you only receive 97 % of the price on completion day.

Plusvalía municipal

A local tax on the increase in land value, payable by the seller and calculated by the town hall. It varies from one municipality to another: ask the town hall before setting your price.

Investment opportunities

The properties I am currently offering to investors. Each one has been visited and checked — I do not list a property I have not seen.

Signing a property mandate between adviser and client

Let’s talk about your project

Tell me where you are writing from and what you are looking for. I answer personally, and I tell you frankly when a project does not look good to me.

Contact us

+34 621 24 17 24

Frequently asked questions

Do I need a NIE to buy in Spain?: Yes. The foreigner identification number is required to sign the deed, open a bank account and file your taxes. You obtain it at a Spanish consulate or in Spain.
Can I buy without coming to Spain?: Yes, through a notarised power of attorney. It is still worth visiting before you sign.
Can you holiday-let anywhere on the Costa del Sol?: No. The town hall may suspend new registrations, and your building may refuse. Both need checking before you buy, not after.
Is the yield guaranteed?: No, and be wary of anyone who says it is. It depends on the property, its location, the season, local regulation and the quality of the management.

Sources

Figures gathered on 8 September 2026. Spanish tax and tourism rules change often: this page is dated and kept up to date. It gives general information and is not personalised tax or legal advice — your own situation should be checked with a lawyer or tax adviser.