Foreign investment

Foreign buyers remain highly active in Spain’s housing market, with over 70,000 transactions recorded in the first half of 2025 alone, according to the latest notary data.

Vox, a right-wing political party in Spain, has submitted a proposal to Congress to increase taxes on foreign property buyers. The money raised would be used to fund tax breaks for Spanish citizens and to support the construction of affordable housing.

Salto de Castro, a village in Zamora that has lain abandoned for more than 30 years, is set for a remarkable comeback thanks to American entrepreneur Jason Lee Beckwith.

Foreign home purchases in Spain continue to rise. Notary data shows that in the first half of 2025, foreigners bought 71,155 properties, up 2% from the same period in 2024.

British interest in Spanish property remains strong, with 5,731 homes purchased by UK buyers in the first half of 2025.

Lately, there has been a lot of talk and hype in the media regarding a Spanish ruling that opens the way to end tax discrimination against non-residents on filing the annual Non-Resident Imputed Income Tax (NRIIT).

What is the profile of home buyers in Spain? What trends are currently shaping the market, and what can we expect in the coming months?

The Spanish housing market is reaching a historic peak, with sales and rental prices expected to hit record levels in June 2025, according to idealista. Purchasing a property as an investment can offer substantial returns, but it also carries risks and requires careful planning.

Rental properties in the Balearic Islands (29.1%), Alicante (27.4%), Málaga (25.7%) and Santa Cruz de Tenerife (21.9%) are seeing strong international demand, each accounting for more than 20% of total rental interest in Q1, according to a study by idealista.

Germany remains the pace-setter on the buying side, while the US leads the rental hunt.

According to the Association of Registrars, foreign demand for housing in Spain has slightly decreased in percentage terms but remains stable, accounting for 14.1%, still at the higher end of the historical range.

Benidorm has become the preferred residential destination for European buyers aged 45 to 59, particularly from the Netherlands, Belgium and Poland. This group seeks modern, sustainable and well-connected homes for long-term stays or permanent residence. Developments such as Breeze, in Balcón de Finestrat, cater directly to this demand, offering sea views, A-class energy efficiency and an environment designed for year-round comfort.

“We need to attract foreign capital; domestic funds alone won’t meet current demand,” said Q Living CEO Rosa Gallego at a conference on the housing crisis organised by the Madrid Association of Economists.

Spain’s property market continues to attract a significant number of British and Irish buyers, with new data from leading homebuilder Taylor Wimpey España shedding light on buyer trends over the past two years.

When political noise takes priority over concrete housing policies, proposals like this tend to surface – in this case, a plan to limit the purchase of residential property in Spain by non-resident, non-EU foreigners.

According to the latest Colliers report, Europe now hosts seven of the world’s top ten destinations for foreign investment in commercial real estate. Amid growing geopolitical uncertainty, investors are favouring safer, more stable markets, making Europe the leading global region, surpassing North America and Asia-Pacific. Spain has risen three spots since Q1 2024 to rank fifth worldwide, entering the global top five for the first time.

Germans are playing an increasingly prominent role in the Spanish property market. In 2024, they were the third-largest group of foreign property buyers in Spain and also ranked third in terms of the highest average purchase prices.

Foreign demand for second homes in Spain remains strong, with 51,800 sales in 2024, highlighting Spain’s appeal as a secure, attractive investment amid global inflation and geopolitical uncertainty.

The Spanish housing market remains firmly on the radar of international investors, although affordable rentals have taken a back seat. The spotlight is now on housing projects intended for sale.

The Costa del Sol is playing a key role in the transformation of the Spanish property market. Once mainly a holiday spot, it is now one of the most dynamic and desirable areas for both investment and living, especially among foreign buyers. This change is driven by its climate, the rise of remote work, global mobility, and Málaga’s air links to over 140 destinations.

Valencia’s historic centre is increasingly popular with international buyers. According to Engel & Völkers, 66% of the property sales the agency handled in Ciutat Vella during Q1 2024 involved foreign purchasers. In total, the firm completed 57 sales in the area – a 39% rise compared to the same period last year.

Foreigners bought more homes in Spain in the second half of 2024 and paid record prices.

The purchase of homes by foreigners in Spain reached nearly 93,000 transactions in 2024, a record figure never before seen in the country, according to quarterly data from the Registrars, compiled by idealista/news.

The European Commission has confirmed in a letter to the government of Andorra that it may include provisions in the association agreement to limit the acquisition of real estate by non-residents, similar to the system in Malta, specifically targeting second homes.

Spain’s property market is witnessing a significant shift, with demand for newly constructed homes far outpacing that for older properties. According to recently published Q4 2024 figures from Spain’s Association of Registrars, sales of new homes surged by 21.6% year-on-year.