Property Buying Cost
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How to calculate the real return on Spanish rental property

Most yield figures you see online are gross yield: annual rent divided by the purchase price. The real return is lower once you add buying costs of 8% to 13% on top of the price, annual running costs and tax. This calculator does the full calculation for your region and tax residency.

Property purchase costs in Spain by region

Resale homes pay regional transfer tax (ITP) on the price or the official reference value, whichever is higher: 4% in the Basque Country, 6% in Madrid and Navarra, 7% in Andalucía, 9% in Valencia and 10% in Cataluña, rising to 13% on the most expensive homes in Cataluña and the Balearic Islands. New builds pay 10% VAT (7% IGIC in the Canary Islands) plus regional stamp duty (AJD) of 0.4% to 2%. On top of the tax, budget for notary (about 0.3% of the price), land registry (about 0.2%), an administrative agent (about €500) and an independent lawyer (typically 1% plus VAT).

How residency affects rental income tax in Spain

EU and EEA residents pay 19% on rental profit after deducting expenses such as community fees, insurance, IBI, maintenance and management. Under current Spanish law, non-EU residents, including UK owners, pay 24% of gross rent with no deductions. In July 2025 the Audiencia Nacional ruled that non-EU owners should be able to deduct expenses; the ruling is not yet final, so the calculator shows its effect as a separate line rather than in your main result.

Gross yield, net yield and return on your cash

Gross yield is rent divided by price: the number agents quote. Net yield subtracts running costs and tax. Return on your cash compares what you earn with the cash you actually put in; with a mortgage it can be higher than net yield because of leverage, and lower if the mortgage costs more than the property earns.

Short-term vs long-term letting in Spain

Short-term letting usually earns more gross rent but costs more: cleaning, booking-platform fees, furnishing and management. It also carries rising regulatory risk. Since April 2025 a new tourist let in a building needs the approval of three-fifths of the owners, the Balearic Islands ban new tourist lets in apartment buildings, and Barcelona's tourist-apartment licences end in 2028. Long-term letting earns less but is simpler and more stable.

How Dubai property returns work

Dubai is the rare market where gross and net yield sit close together. There is no income tax on rental income for individuals holding property as a personal investment, no capital gains tax when you sell and no annual property tax. What separates gross from net is operating cost: service charges, management, maintenance and, for short-term lets, platform commission.

Dubai buying costs

Budget 6% to 8% above the price: the Dubai Land Department transfer fee of 4%, agency commission of about 2% plus VAT, a trustee fee of about AED 4,000 and title-deed fees. Mortgage registration adds 0.25% of the loan. Off-plan buyers pay no rent during construction, usually two to four years, which the calculator models with a first rental year.

Dubai vs Spain: which produces the better net return?

Dubai usually wins on net yield because rental income is not taxed locally. Spain often wins on financing: Spanish banks typically lend non-residents 60% to 70% of the price, against about 50% for non-residents in the UAE, and at lower rates. Which is better depends on your cash, your tax residency and whether you want income or leveraged growth. Run both and compare.

Tax rates, transfer duties and market defaults last reviewed 25 October 2026.