Rent or buy in Spain in 2025? A complete Expat Guide

Deciding whether to rent or buy a property in Spain is one of the first big choices many foreigners face, and the right option will depend on their finances, lifestyle, and long-term plans.

The Spanish property market in 2025 remains strong, with demand high among both residents and expatriates. However, rising prices and new tax proposals — including a debated 100% tax on property purchases by non-EU buyers — mean it’s more important than ever to plan carefully.

Is renting in Spain a good option for expats?

Renting is the more flexible option, allowing you to settle in without long-term commitments. It’s ideal if you want to explore different regions before deciding where to buy or if you’d prefer to avoid the responsibilities of property maintenance.

2025 Rental Law in Spain: What foreign tenants need to know

If you’re thinking about renting in Spain, be aware of the latest changes that give tenants stronger protections, especially in popular expat areas like the Costa del Sol, Valencia, Madrid, Barcelona, and the Balearic Islands:

• Rent increases capped – Annual rises are now tied to the national CPI.
• Longer and more secure contracts – A minimum of 5 years if the landlord is an individual, or 7 years if a company. At the end of the contract, leases automatically renew for up to 3 more years unless notice is given. This means more stability and fewer unexpected moves.
• Lower upfront costs – Deposits are capped at 2 months’ rent, and in many cases agency fees must be covered by corporate landlords.

Understanding these rental rules is just the first step. The next question for most expats is how much they can expect to pay in different parts of Spain.

How much is rent in Spain in 2025?

Rental prices vary widely depending on location. Major cities like Madrid and Barcelona, or coastal hotspots such as Marbella and Ibiza, command higher rents than smaller inland towns. Expats often pay more in tourist-driven areas, so it’s worth comparing regions carefully as part of your overall cost of living in Spain.

Essential tips for finding a rental property in Spain safely

• Use trusted portals (Idealista, Fotocasa, Habitaclia).
• Check contracts carefully, consider legal advice.
• Confirm who handles maintenance.
• Choose a location suited to your lifestyle.
• Avoid scams: never pay before viewing/signing.

Is it better to buy property in Spain as an Expat?

Buying a property provides long-term stability, a sense of permanence, and potential investment value. Many expats also look at rental yields in Spain in 2025 to see if purchasing a property to rent out makes financial sense.

Step-by-Step Guide to buying a home in Spain

1. Secure funding – Obtain mortgage pre-approval if needed.
2. Find the right property – Search through online portals or trusted agencies.
3. Legal checks – Hire an independent lawyer to verify ownership, debts, and planning permissions.
4. Obtain your NIE – All foreign buyers must have an NIE (Número de Identificación de Extranjero), which is legally required for any property purchase.
5. Offer and deposit – Typically a 10% reservation fee is paid when signing the contrato de arras.
6. Completion – Sign the public deed (escritura) before a notary and pay the balance.

How much tax do you pay when buying a house in Spain?

• Property Transfer Tax (ITP): 6–10% depending on the region.
• Notary and registry fees: Around 1–2% of the property value.
• Legal fees: Roughly 1%.
• Other costs: Mortgage set-up, surveyor reports, and moving expenses.

Note: In May 2025, the Spanish government tabled a bill in Parliament proposing a 100% tax on homes purchased by non-EU residents as part of a strategy to curb property speculation and ease pressure on Spain’s housing market. It would apply only to resale properties, effectively doubling the cost by adding a 100% levy on top of the existing transfer tax. The proposal remains under debate and is expected to face legal challenges over discrimination and compliance with EU law. If approved, it would not take effect until 2026 at the earliest. Importantly, new-build and off-plan homes would remain exempt, as they are subject to VAT rather than transfer tax.

Other costs of buying property in Spain 

Beyond the purchase price and one-off taxes, homeowners also need to factor in ongoing expenses that come with owning a property in Spain. These can add up quickly, especially for holiday homes or properties in coastal resorts.

• Community fees: Cover the upkeep of shared areas, lifts, pools, and gardens. These are normally paid by the owner, though in some rental agreements landlords may pass them on to tenants.
• Property maintenance: Regular repairs, servicing, and general upkeep of the home.
• Insurance: Home and liability cover are strongly recommended, and often required for mortgages.

Ongoing local taxes and annual charges

In addition to the above, property owners must also budget for annual municipal taxes and state obligations, such as:

• IBI (Property Tax): A yearly municipal tax based on the cadastral value of the property.
• Refuse collection fees: Often billed separately by the local council.
• Water treatment or sewage charges: Common in many municipalities.
• Non-resident income tax (IRNR): Payable if you are not tax resident in Spain, even if the property is not rented out.

Renting vs buying in Spain: Pros and Cons for Expats

• Renting – Flexible, lower upfront costs, short-term commitment.
• Buying – Stability, long-term investment, and a permanent base.

Your choice will depend on whether you want freedom to move around, or the security of putting down roots. Many expats choose to rent at first, then buy once they’re certain of the location that suits them best.

Final Thoughts: Renting or Buying Property in Spain in 2025

With the updated rental law making tenancies safer and more predictable, renting is now more appealing than ever. But for those planning a long-term stay, buying remains a strong investment and a way to secure your place in Spain.

Do you need home insurance in Spain?

Whether you rent or buy in Spain, protecting your home is essential. For buyers, mortgage lenders often require it. For renters, it’s a smart way to cover belongings and liability risks.

One issue that concerns many expats is the illegal occupation (squatting). Some insurers, including Generali Expatriates, offer legal defence cover in case of unlawful occupation. This provides valuable peace of mind, especially for those with second homes left vacant for long periods.

Expat-Friendly insurance options with Generali Expatriates

At Generali Expatriates, our home insurance is tailored for international residents. From covering your furniture and valuables to accidental damage or legal defence against illegal occupation, we’ve designed policies to match your needs.

You can personalise your cover, so you only pay for what matters to you, giving you confidence that your home and belongings are safe.

If you’d like to review your current cover or explore your options, our expert brokers and agents are here to help. Find your nearest broker or request a quote today — and protect your home, wherever life in Spain takes you.