Navigating Spain's Real Estate Market with GOGO Estates

1. Rental Market Changes: What Expats Should Know

Stricter Rules for Tourist Rentals

Spain's coastal and urban areas are tightening regulations on tourist rentals. Key updates include:

• Limits on issuing new tourist licenses in popular locations
• Restrictions on short-term rentals within residential buildings
• Higher community fees applicable to tourist rental properties
• Mandatory registration and compliance with local licensing laws

Owners listing on platforms like Airbnb or Booking.com must ensure their properties are fully compliant to avoid fines or license revocations.

Changes in Long-Term Rental Regulations

Spain is enhancing tenant protections, impacting landlords and investors:

• Rent increase caps in designated high-demand cities and regions
• Stricter documentation and contract transparency requirements
• Extended minimum lease terms to increase tenant stability
• Tax incentives for landlords offering affordable rents under specific conditions

These changes are particularly relevant for buyers purchasing rental properties as investments.

2. Understanding Taxes: ITP, AJD, and VAT

Property Transfer Tax (ITP)

When buying resale properties, the ITP is a significant cost to consider. In 2025/2026:

• Closer scrutiny on declared purchase prices to prevent undervaluation
• Heightened monitoring of transactions involving foreign buyers or second homes
• Regional variations in ITP rates and procedures becoming more pronounced

Be sure to budget for ITP alongside notary, land registry, and legal fees.

AJD Tax and VAT on New Builds

Purchasers of new-build properties must pay VAT (IVA) plus AJD (Stamp Duty), with AJD rates generally between 1% and 1.5% depending on the region.

In 2025/2026, authorities are enforcing:

• Verification of urban planning and construction licenses
• Compliance with updated energy efficiency and environmental standards
• Longer processing times in some areas due to stricter permit controls

3. Notary and Financial Compliance

Spanish notaries have increased anti-money laundering measures affecting international buyers:

• Requests for proof of funds and source of income
• Disclosure of tax residency and bank statements
• Additional documentation if purchasing through corporate structures

Digitisation is streamlining processes, featuring electronic signatures and faster communication between authorities, but buyers should prepare for detailed due diligence.

4. Professionalisation of Real Estate Agencies

Recent regulatory efforts aim to make Spain's real estate sector more transparent and consumer-friendly. Changes include:

• Mandatory professional liability insurance for agents
• Clear disclosure of commissions and services provided
• Requirements for official registration or licensing in some regions
• Enforcement of thorough documentation standards for all transactions

This enhances buyer protection and fosters trust throughout the purchase process.

5. Spanish Property Market Outlook

Despite regulatory tightening, Spain remains a top destination for lifestyle buyers, retirees, and investors. Popular areas with sustained international demand include:

• Costa Cálida
• Costa Blanca
• Almería
• Murcia
• Andalucía

The limited supply of new-build properties near the coast continues to create opportunities, especially for buyers seeking quality homes with rental potential.

6. Pro Tips for Expats Relocating to Spain

• Engage a bilingual real estate professional: Multilingual agents help navigate local laws and language barriers.
• Budget carefully for all transaction costs: Include taxes, notary fees, land registry costs, and legal expenses.
• Verify property licensing and compliance: Confirm tourist rental permits or new-build certifications if applicable.
• Understand tenancy laws before investing in rental properties: Stability and rent controls vary by region.
• Prepare necessary documentation early: Especially proof of funds and residency details for smoother notary proceedings.

Frequently Asked Questions

Q1: Do I need a NIE number to buy property in Spain?

Yes, a Número de Identificación de Extranjero (NIE) is required for property purchases and any official transactions.

Q2: Are non-residents taxed differently when buying property?

Non-residents may face additional tax obligations, such as non-resident income tax on rental earnings. Tax rules can vary by region and personal circumstances.

Q3: Can I rent out my property as a holiday rental?

It depends on local regulations. Many municipalities have tightened restrictions on tourist rentals, so it’s essential to comply with licensing and registration requirements.

Q4: How long does the property purchase process take?

Timeline varies but typically ranges from 1 to 3 months, depending on notary, registration, and financing arrangements.

Q5: Should I hire a lawyer when buying in Spain?

Engaging a local real estate lawyer is strongly recommended to review contracts, verify property status, and ensure compliance with all legal requirements.

Q6: Are there restrictions on buying property through a company?

Purchasing via a company is allowed but involves additional documentation and tax considerations. Professional advice is advisable.