Guide · Holiday homes

Holiday home in Spain: Costa Blanca, Costa del Sol and more compared

As of November 2026 · about 8 minutes' read

“A house in Spain” can mean many things: a flat with a sea view in a large complex, a villa on Mallorca, a finca among olive trees or an apartment in the Canary Islands where even January is warm. The regions differ greatly in price, climate, travel and above all in whether you are allowed to let to holidaymakers. This overview helps you narrow down your choice.

The regions at a glance

The prices are given roughly, relative to each other. Within each region there are big differences between the seafront and ten kilometres inland.

The mainland coasts

Costa Blanca. The coast of the province of Alicante is the classic region for German buyers. Around Dénia, Jávea, Moraira, Calpe and Altea there is a large German-speaking community with doctors, tradespeople and clubs. The north is hilly and greener, the south around Torrevieja and Orihuela Costa is flatter, more densely built up and much cheaper. There are direct flights to Alicante from almost every German airport. The property transfer tax in the Valencia region fell to 9 per cent in June 2026.

Costa del Sol. The coast around Málaga, Marbella, Estepona and Nerja is more international, with a stronger British and Scandinavian character. Málaga has a great many flight connections and is a lively city in its own right. Prices on the coast have risen sharply in recent years. In Andalusia the property transfer tax is a single 7 per cent.

Costa Brava. The rocky coast north of Barcelona is the only one you can easily reach by car from southern Germany. The climate is less hot, winters are noticeably cooler, and many places are quiet then. At 10 per cent and more, Catalonia has the highest property transfer tax of the regions listed here and is considered particularly strict on holiday letting.

Costa Cálida (Murcia). On the Mar Menor and around Mazarrón, prices are often lower than on the Costa Blanca. There are many new-build and golf complexes. The region is very dry and the summers are hot. If you look at the Mar Menor, check the water quality of the lagoon, which has repeatedly been an issue in recent years.

Mallorca and the Canary Islands

Mallorca and the Balearic Islands. Mallorca is close, well connected and has been popular with Germans for decades, so the German-speaking infrastructure is correspondingly large. But it is also the most expensive region on this list. The property transfer tax is tiered and rises to as much as 13 per cent for expensive properties. Holiday letting is heavily restricted, and new licences are almost impossible to get.

Canary Islands. The islands are the only region with swimming weather all year round, which makes them attractive for people who want to spend the winter there. In return, the journey is much longer, at around four to five hours' flying time. Many Germans live on Tenerife and Gran Canaria, while Lanzarote and Fuerteventura are barer and windier. The Canary Islands have their own taxes (IGIC instead of VAT) and, since 2025, a law that largely stops new holiday flats in residential areas.

Inland areas and fincas

A few kilometres inland, prices drop considerably. A finca with land in the hinterland of the Costa Blanca, in Andalusia or on Mallorca often costs less than a flat on the promenade. The downsides: you always need a car, water sometimes comes from a well or by tanker, and waste water goes into a septic tank.

The biggest risk in the countryside is the planning status. Many fincas stand on land that may not be built on, and extensions were added over decades without permits. Check this carefully before you buy. What matters here is explained in the article Buying a house in Spain.

Holiday letting: licences and limits

If you want to let to holidaymakers in Spain, you need a holiday rental licence (“vivienda de uso turístico”, VUT or VT for short). The regions are responsible for this, and the municipalities can set additional limits. In recent years the rules have become stricter almost everywhere:

• Owners' community: since April 2025, in a residential complex you need the express consent of the community if you want to start holiday letting. A three-fifths majority is required. Existing lettings are generally not affected.
• Balearic Islands: new licences hardly available, ruled out for blocks of flats in Palma.
• Catalonia: in many municipalities with a tight housing market, existing licences are expiring. Barcelona wants to end all holiday flats by November 2028.
• Canary Islands: a 2025 law severely restricts new holiday flats on residential land, and municipalities must submit their own plans.
• Valencia and Andalusia: licences are still available, but some cities such as Málaga, Alicante and Valencia have suspended new licences entirely or in parts of the city.

On 1 July 2025 the Spanish state also introduced a national register for short-term rentals, which platforms such as Airbnb had to check registration numbers against. In May 2026 the Supreme Court declared the registration procedure void because the state had no competence for it. The regional licences remain unchanged. The legal situation is moving fast. Before you buy, ask the town hall and the region's tourism authority whether a licence is possible for this specific property, and if necessary make the purchase conditional on it.

You must pay tax on rental income in Spain: as an EU citizen, 19 per cent on the profit after deducting costs. If you live in Germany, this income is generally tax-free there under the double taxation agreement.

Taxes when you use it yourself

Even if you only use the house yourself, Spain charges an annual tax. Non-residents pay income tax (IRNR) on a notional rent, the “imputación de rentas”:

• The income is deemed to be 1.1 per cent of the cadastral value if this has been revised in recent years, otherwise 2 per cent. You can find the cadastral value on the IBI property tax bill.
• As an EU citizen you pay 19 per cent tax on this. With a cadastral value of €150,000 and 1.1 per cent, that comes to around €310 a year.
• You file the return on form Modelo 210, usually in the following year. Many owners have a gestoría do this for them.

On top of this come property tax, waste collection charge, community fees and insurance. The article Costs and taxes for a holiday home abroad gives an overview of all running costs.

This article gives a general overview and is not a substitute for legal or tax advice. The rules on holiday letting in Spain are currently changing often and vary by region and municipality. Check them with a local lawyer before you buy.