Property investment in Spain: yields, taxes and the process

Why Spain for Hungarian investors?

Spain is an EU member state, meaning Hungarian citizens can buy property without any restrictions. Ownership rights are clear and transparent, the process is legally straightforward, and the investment is denominated in euros, minimising currency risk.

The Costa del Sol is particularly attractive for investors: stable price growth, strong rental demand and a 12-month tourist season. Over the past five years new-build prices have risen by 10-14% per year.

Rental yields: what to expect

Short-term (tourist) rental

Short-term rental on the Costa del Sol can deliver 5-8% net annual yield for a well-chosen property. Beyond the high season (June-September), demand remains strong in winter months from Northern European and British visitors.

A 300,000-euro two-bedroom apartment in Estepona typically generates 20,000-25,000 euros in net annual revenue from short-term rental.

Long-term rental

Long-term letting delivers 3.5-5% net yield with lower management costs and more predictable income. This approach is ideal for those seeking stable, passive income.

Capital appreciation

Beyond rental yield, the most important element of property investment is capital growth. In prime Costa del Sol locations this runs at 8-14% per year, potentially doubling the investment value over 5-7 years.

Taxes: what you need to know

At purchase

For new-build property: 10% VAT (IVA) and 1.2% stamp duty (AJD). Total additional costs amount to 12-13% of the purchase price.

On rental income

As an EU citizen, rental income is taxed at 19% in Spain. Income can be reduced by deductible expenses (utilities, insurance, management fees, depreciation). Under the double-taxation treaty with Hungary, income already taxed in Spain is not taxed again in Hungary.

During ownership

Annual costs: IBI (local property tax, 0.4-1.1% of cadastral value), community fee (comunidad, 80-300 euros/month depending on the property), and insurance.

On sale

Capital gains tax of 19% applies in Spain for EU citizens. The taxable base is the difference between purchase and sale price, reduced by documented costs.

The investment process in 5 steps

1. 1.Free consultation: We assess your needs, budget and investment goals
2. 2.Personalised shortlist: We curate from the full Costa del Sol market
3. 3.On-site visit: Organised viewings at selected projects
4. 4.Purchase and contract: Full English-language support before the notary
5. 5.Rental management: Our local partners take over letting and operations

Next step

Request a free investment consultation. We get in touch within 24 hours to discuss your budget, goals and realistic yields.