Rental income on the Costa del Sol: what can you expect in 2026?

For many of our clients, letting is a central part of the sums when they consider buying on the Costa del Sol. The idea is usually to use the home yourself for a few weeks or months a year and let it the rest of the time, so that it helps pay for itself. The question we hear most often is how much you can realistically expect to keep.

That depends on location, standard and how much work you put in. As a rule of thumb, in our experience gross yields on short holiday lets in 2026 are typically 4-7 per cent of the purchase price a year. Long-term letting, to a tenant who makes the home their main residence, normally gives a little less, around 3-5 per cent gross, but the income is more predictable and needs far less follow-up.

How non-residents are taxed

Tax is where many overseas owners get caught out. If you are tax resident in another EU country, or in Iceland, Norway or Liechtenstein, you pay 19 per cent non-resident income tax on your net rental income, that is, after deducting expenses directly linked to the letting. Everyone else, including UK residents since Brexit, pays 24 per cent on the gross income, with no deduction for expenses. In the periods when the home is not let, you are also taxed on imputed income based on the property's cadastral value. Your home country may also tax the same income, so check with an adviser there too.

Non-residents declare rental income on Form 210, and the deadlines have just changed. Under Order HAC/623/2026, rental income is now declared and paid in the first 20 days of April of the following year, so 2026 income falls due between 1 and 20 April 2027. Some income from earlier in 2026 that is declared separately keeps the old quarterly deadlines, so ask your adviser.

New national rules from October 2026

A royal decree-law of 6 October 2026 adds two changes. From 1 December 2026, furnished lets of up to 30 nights, other than the owner's own main home, lose their VAT exemption and are charged at 10 per cent. And lets of more than 31 days that are not ordinary long-term tenancies must state a real, provable reason why the tenant is temporarily away from their usual home. The decree is in force but still has to be confirmed by the Spanish parliament, so check the status with your adviser.

Registration

From 1 July 2025, Spain had a national register for short-term rentals, and homes needed a national registration number to be advertised on platforms such as Airbnb and Booking.com. In May 2026 the Supreme Court annulled the register, including the procedure for issuing that number, because the State lacked the power to create it. The state's digital data portal and the platforms' duty to report data remain. In Andalucía, the home must still be registered with the Andalusian tourism register (RTA) before it is marketed as a holiday let, and town halls can limit the number of holiday lets by building or area. Our article on tourist licences on the Costa del Sol explains the local rules.

In our experience, demand for holiday homes on the Costa del Sol is still very high, driven by visitors from across northern Europe. But a realistic estimate of return needs knowledge of the specific area, the seasons and the current rules, not just general percentages.

If letting is part of your plan, we are happy to work out what is realistic for the exact home and area you have in mind. Read more about investing on the Costa del Sol, browse homes for sale, and get in touch with us at Solkystmegleren for a no-obligation chat.