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What’s the average price of a property in Spain in 2021?

What’s the average price per square metre for a new build and a second-hand home in Spain? 

Published: 19 July 2021 12:03 CEST
What's the average price of a property in Spain in 2021?
The fishing village of Lastres in the northern Spanish region of Asturias. Photo: Sara Riaño/Unsplash

Spain’s property market has not yet experienced the drop in prices that many budding house owners were hoping for in 2021. 

Some may therefore prefer to not wait for any potential downturn in the market and just go for it and purchase the Spanish property of their dreams. 

But what’s a normal price to pay for a property? This of course depends on numerous factors but Spain’s Property Appraisal Society recently shed some light on what you can expect to pay for a 90 square meter home in Spain – approximately the average size of a residential flat – depending on whether it’s completely new or it’s second hand. 

How much can you expect to pay for a brand-new property in Spain in 2021?

According to Spain’s Property Appraisal Society, the average price of a new home in Spain so far in 2021 is €223,380.

That’s equal to $263,169 or £191,683.

The average per square metre price of new homes in Spain stands at €2,482 sqm after a slight annual variation of 0.4 percent and a six-month variation of 0.2 percent across 16 of Spain’s 17 regions.

This is the highest value new builds in Spain have achieved since 2010, when the average square metre was going for €2,537/sqm. 

As the map below reflects, the Spanish regions where the value of new builds is highest are Catalonia (€3,992/sqm), Madrid (€3,682/sqm)  and the Basque Country (€2,762/sqm). 

On the other side of the spectrum are regions like Extremadura in southwestern Spain and Murcia in the southeast, where the average square metre price is €1,209/sqm and €1,265/sqm respectively. 

Spain’s Property Appraisal Society collected data between March and June 2021, using the values ​​of nearly 38,000 homes from 2,900 new developments across the country.

What’s the average price of a property in Spain overall in 2021?

Spain’s Property Appraisal Society doesn’t have data exclusively for second-hand homes for 2021, instead calculating the average price of new and second-hand homes together. 

This at least serves to know what the average price of a 90 sqm property in Spain is. 

The average cost of a residential property in Spain in Q4 2020 was €150,750, the latest available data shows. That’s equal to $177,470 or £129,483.

The average per square metre price of all types of homes in Spain stands at €1,675 sqm, representing a drop of 0.4 percent in the first six months of 2021 but an annual increase of 0.7 percent on last year’s average price.

Madrid, Catalonia and the Basque Country again have the highest prices for second-hand properties, followed closely by the Balearic Islands. 

The average price per square metre for residential properties is below the national average of €1,675 sqm in all of Spain’s other 13 regions. 

What’s the average price of a second-hand property in Spain in 2021?

According to leading Spanish property search engine Idealista, the price of second-hand homes has increased by 10.1 percent during the past 12 months. 

As of July 2021, the average price for a second-hand property in Spain stood at €1,816/sqm.

For a 90sqm used property in Spain, the price is therefore an average of €163,440 – equal to $192,472 or £140,253.

The Balearic Islands, with an annual increase of 2.7 percent, is the Spanish region with the highest price for second-hand housing: €3,169 euros/sqm. 

Next in line are Madrid with €2,945/sqm, the Basque Country with €2,668/sqm and Catalonia with €2,325/sqm. 

On the opposite side of the table, the cheapest regions to buy a second-hand property are Castilla La Mancha (€875/sqm), Extremadura (€933/sqm) and Murcia (€1,056/sqm).

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PROPERTY

Is it better for landlords in Spain to rent to temporary or long-term tenants?

If you own property in Spain that you don’t live in yourself, it’s likely that you’ll be renting it out, but is it best to rent it out on a temporary or long-term contract?

Published: 16 February 2024 11:14 CET
Is it better for landlords in Spain to rent to temporary or long-term tenants?

Your decision to rent out to temporary or long-term renters will of course be influenced by whether or not you intend to use your property yourself during parts of the year, but if not, it’s worth keeping in mind what the differences are. 

Besides the duration of the contract, the laws that govern each situation are different and the tax implications differ too.

READ ALSO: What are the requirements for landlords to rent out a property in Spain?

Long term contracts

Renting out long-term is governed under the Urban Leasing Law (LAU), which aims to provide shelter to families permanently and indefinitely.

It is possible to update the rent each year, depending on the price index or specific regulations at the time.

For example, in 2024, there is currently a three percent price cap. This means that you won’t be able to raise the rent on contracts that are already in force above three percent. The rental cap, however, does not apply to new contracts signed, or those signed after 2019.

Long-term contracts have a minimum duration of five years, however, your tenants can leave any time after six months as long as they give 30 days’ notice.

If you decide you need the property for yourself, you must wait until one year has elapsed on the contract and then give your tenants two months to vacate the property.   

If you decide to sell the property on the other hand, your tenant has the right to stay for up to three months or until the property is sold.

READ ALSO – Renting in Spain: When can a landlord legally kick out a tenant?

Temporary contracts

Regarding temporary rental, the law frames it under the label “rental for use other than housing”.

Temporary contracts must be for a minimum of 32 days, any shorter than this and they would be considered tourist rentals. Rentals to tourists are covered under a completely different set of rules and regulations and in many places require a tourist licence too.

READ ALSO: The rules for getting a tourist licence to rent out your Spanish property

Temporary contracts must also not be longer than 11 months. Beyond that time it would be considered a long-term rental and a long-term contract up to five years like above, would need to be issued.                                                                                                 

There is more flexibility when setting rents for temporary contracts. These are typically higher than long-term rents because of various factors, such as the addition of furniture, bills and wi-fi being included and the fact that they’re often rented out in high season. 

It’s worth keeping in mind that a high tenant turnover carries a slightly greater risk than when you rent your property out long-term. You or a management company will need to be more involved too.  

READ ALSO: Why you should consider renting out your property in Spain to students

It’s important to consider taxes when deciding to rent out to temporary or long-term renters. Photo: Andrea Piacquadio / Pexels

Declaring tax on rent from long-term contracts

You must pay taxes on your net income if you rent out long-term.  

This means adding up all the gross income for the year and deducting all the expenses involved with the rental. The following expenses are deductible:

– Waste collection fee
– Real Estate Tax (IBI)
– Insurance in case your tenants can’t pay the rent
– Home Insurance
– Community expenses
– Mortgage interest
– Real estate commissions

As the apartment serves as the tenants’ habitual residence, the tax authorities will also apply a 60 percent bonus on the net income before subjecting it to tax. This means the amount subject to personal income tax is only 40 percent of the net rental income.

These bonuses may be even higher if the conditions of the new Housing Law, introduced in 2023, are met.

Declaring tax on rent from temporary contracts

You must declare the income from all the temporary contracts that occur during the same fiscal year.

Expenses can be deducted just as before, but these may be different such as cleaning services between tenants and household bills, if they’re included.

You are also taxed on your net income, however, there are no bonuses applied like with long-term contacts as it is not considered to be the tenants’ main residence.

This means you will pay tax on 100 percent of the net income and not 40 percent like above.

You will also be charged tax on any time the apartment has been empty. This amount will depend on the cadastral value of the home and the number of days there hasn’t been anyone staying in it.

Declaring tax on rental income as a non-resident

If you’re a non-resident who owns a property in Spain and rents it out, the rules on taxes will be slightly different.

As a non-resident, you must pay income tax on rent earned in Spain as well as local property taxes such as waste tax and IBI.

If you rent your property out temporarily then you will need to submit quarterly tax returns, not just annual ones. You will also be charged tax for the periods when your property was empty. 

Those from the EU will be charged 19 percent, while everyone else will be charged 24 percent.

It’s very important to remember that if you’re from a non-EU country, such as the UK, the US or Canada you will not be allowed to deduct any expenses from your rental income, therefore you will pay tax on the full gross amount you earn.

To find out more, read our guide to non-resident tax in Spain.

Conclusion

The answer as to whether temporary or long-term contracts are best for landlords will completely depend on your situation and your preferences.

Long-term contracts are easier because you won’t have so much turnover and won’t have to be as involved. There are also various bonuses and tax breaks you can benefit from.

You can earn more from temporary contracts, but this means you will also pay more in taxes too and won’t get any bonuses. It will also take up more of your time, however, it’s a good option for those who want to use their property themselves for part of the year. 

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