Holiday Home Investments in Spain: Top 5 Locations for Maximum ROI

Did you know that buying a holiday home in Spain has increased twice in the last decade, as such homes represent 14.6% of all housing in Spain. Due to the country’s attractive points, favourable policies, and increased luxury residential projects by esteemed developers like DarGlobal, the Spanish real estate market is quickly becoming a hotspot for substantial return on investment (ROI).

Whether envisioning a beachside villa for seasonal escapes or targeting the best vacation rental investments, Spain offers a landscape rich in opportunity. Buying a holiday home in Spain means tapping into one of Europe’s most resilient and high-demand property markets.

In this guide, we’ll dive into Spain’s property sector dynamics, explore the top five locations for owning vacation rental property, and walk you through everything from taxes to residency via Spain’s attractive Golden Visa. 

Understanding the Housing Market in Spain

Spain’s property market has rebounded strongly post-pandemic, mostly driven by international demand, low interest rates, and a growing trend toward owning vacation rental property. In 2024, the property sector in Spain grew strongly, with 641,919 houses sold, a 10% rise from one year earlier. 

Another major segment that contributed to the housing market's success in Spain is foreigners, who account for 14.5% of transactions, amounting to some 93,000 properties.

The demand for housing has been increasing in Spain, especially along the coast and in cities. From the sun-soaked villages of Andalusia to the buzzing urban centers of Madrid and Barcelona, Spain offers a dynamic and highly profitable market. 

By investing in Spain real estate, you can get short-term returns particularly in tourist hotspots, making Spain among Europe's best vacation rental investments destination. And with rising rental returns and great property appreciation, investors are turning their short term returns to long-term gains.

Top Places to Buy Property in Spain

If you're after strong and consistent rental income or long term value growth, you must invest in a holiday home that only delivers exceptional returns. Here are the top five high-performing destinations in Spain.

Madrid

The capital of Spain is not only a cultural hub, it's also a financial beacon for investors. Madrid has an ever-increasing population combined with global business significance, which has resulted in high demand for property and excellent rental yields, upto 7%.

Madrid holiday home investment provides stability and value. The city's districts, including Salamanca and Chamberí, are famous for luxurious real estate that fetches high prices on sites like Airbnb. With a steady stream of tourists and professionals, owning vacation rental property here guarantees year-round profitability.

Barcelona

Barcelona is still among the most popular cities in Europe for tourists and investors alike. Famous for art, architecture, and seaside living, the city combines beauty with functionality in a way that's unmatched anywhere.

Although there are regulatory limitations on short-term letting, houses in authorized areas still earn high returns. Holiday home investment in Barcelona gives you access to both tourist and long-term expat demand in the region. It's a two-pronged investment scheme that consistently delivers returns.

Málaga

Málaga has changed from a tranquil beach town to a dynamic investment hub. With its economy fueled by tech, excellent infrastructure, and the best of Mediterranean atmosphere, the city is attracting a new crop of investors.

For those who are buying a holiday home in Spain, Málaga gives you value, quick appreciation, and good rental yields, which go up to 8%. Soho and El Limonar are on the verge of becoming fashionable, sought-after districts for both vacationers and digital nomads.

Alicante

If you're looking for a property value without sacrificing your lavish lifestyle, Alicante is definitely for you. This seaside gem on the Costa Blanca is renowned for its white-sand beaches, subtropical climate, and cosmopolitan expat community.

Prices of property are relatively low compared to Madrid or Barcelona, and therefore Alicante is one of the most affordable ways to enter the holiday home investment market. With such a high number of short-term letting bookings all year round, the ROI potential is excellent for investors with limited budgets.

Marbella

When it comes to luxury, the top spot is held by Marbella. Famous for its extravagant beachside villas and celebrity clientele, this Costa del Sol gem is ideal for high-end holiday home investors.

Moreover, DarGlobal's Painite Villas Design Inspired by Automobili Lamborghini has benchmarked a new luxurious standard in the region. The ROI in Marbella is driven by affluent tourists willing to pay premium rates for exclusive accommodations. If your goal is to invest in the high-end market, Marbella promises not only prestige but also profitability.

Emerging Hotspots for Property Investment

Beyond the traditional mainstream cities, there are several emerging destinations in Spain that are quietly gaining traction for investors looking for early-mover advantages.

Casares

Casares, located on Spain’s Costa del Sol, is gaining recognition as a prime spot for holiday home investment, thanks to its serene Mediterranean charm and growing luxury appeal. 

Elevating Casares’ status further is the exceptional DarGlobal project, Marea, Interiors by Missoni, a luxury residential development that fuses high fashion and real estate. For anyone buying a holiday home in Spain, Marea offers a unique chance to own a property and a high-performing asset.

Seville

Seville offers a unique mix of tradition, warmth, and profitability. Known for flamenco, festivals, and authentic Spanish charm, Seville is drawing attention as a best vacation rental investments contender.

Tourist interest in Seville has grown exponentially in the past five years. Its architectural wonders and cultural depth make it a year-round destination. For investors, the lower property costs and increasing tourist inflows translate to high ROI with manageable overheads.

Girona

Girona is a rising destination in Catalonia that tends to be under the radar. Its proximity to Barcelona and the Pyrenees makes it prime for summer and winter rentals.

The charming medieval town, vibrant gastronomy culture, and growing global visibility (thanks to the Game of Thrones series) make Girona a wise choice for owning a vacation rental property. With growing infrastructure and tourism, early investors can anticipate good appreciation and consistent rental returns.

Understanding Costs and Taxes When Buying in Spain

Before exploring the aspects of making a holiday investment in Spain, it's essential to consider the cost of owning a holiday home. The Spanish system is relatively open but complex, from legal fees to taxation.

Firstly, property acquisition taxes range from 6% to 10%, depending on whether the property is new or resale. Add notary fees, registration costs, and legal services to that, and you’re looking at around 12–15% in total acquisition expenses.

Operating expenses involve property tax (IBI), paid yearly by municipalities, and are region-specific. Community fees, if purchasing within a development, and rental income tax (24% for foreign nationals) must also be included. Deductible expenses can help limit taxable income, making it more affordable for smart investors.

It's best to speak with a Spanish real estate attorney or tax consultant before signing any agreement. Spain also requires an NIE (Número de Identificación de Extranjero), a tax ID for foreign buyers that is the key to legal transactions.

Pathway to Spanish Residency: Golden Visa Explained

Spain's Golden Visa scheme is a significant inducement for non-EU investors. Investing €500,000 or more in Spanish property makes you eligible for residency with a range of advantages.

The procedure is quite simple: Once you buy the property, you apply through the consulate or in person in Spain. The visa permits free travel within the Schengen Area, and unlike other residency paths, there’s no requirement to live in Spain full time.

Golden Visa holders may also bring immediate relatives and ultimately apply for permanent residence or citizenship. For holiday home investors, it's a win-win; it's high-ROI property ownership combined with the freedom of European residency.

Conclusion

From the historic streets of Barcelona to the luxury villas of Marbella, holiday home investment in Spain has got something for every kind of investor. With cities like Málaga and Valencia showing remarkable growth, and with regulatory benefits like the Golden Visa, the time has never been better to invest.

Our flagship projects like Marea, Interiors by Missoni, and Tierra Viva, Designed Inspired by Automobili Lamborghini, have changed the entire landscape of holiday home investment in Spain. We have designed experiences that offer high returns, architectural elegance, and locations primed for growth. Ready to explore your investment opportunities? Reach out today to learn more about DarGlobal’s premium projects in Spain.

FAQs

Is it better to rent or buy a property in Spain?

When you buy, it gives you long-term ROI, stability, and the potential for passive income. On the other hand, renting may be more suitable for short stays or those who want to test the market.

Can I live in Spain permanently if I buy a house?

If your investment exceeds €500,000, you’re eligible for Spain’s Golden Visa, and this can lead to permanent residency.

Is it better to buy property in Spain or Portugal?

Spain offers more diverse locations and stronger rental yields in some areas, while Portugal has slightly lower property taxes and cost of living.

Are property taxes high in Spain?

Property taxes are moderate, typically around 0.4%–1.1% annually, depending on the region. There are also additional taxes that may be applied at purchase, such as transfer tax or VAT.