Investing in Spain: Returns, Taxes, and Madrid Opportunities
Spain, and Madrid in particular, offers some of Europe's most attractive rental yields. With still-accessible prices and rising rental demand, 2026 is the ideal time to invest.
Why invest in Spain in 2026?
5-7%
Gross rental yield in Madrid
Compared to 2-3% in Paris and 3-4% in most European capitals.
+5.8%
Price growth in Madrid in 2025
Stable upward market, driven by international demand and the Digital Nomad Visa.
97,300
Foreign property transactions in 2025
13.8% of all sales in Spain.
0%
Inheritance tax between spouses in Madrid
The Community of Madrid exempts transfers between spouses and children.
Investing in Madrid vs London: the comparison
| Madrid | London | |
|---|---|---|
| Average price per sqm | 4,500 EUR | 12,000+ EUR |
| Gross rental yield | 5-7% | 2-3% |
| Property tax | 0.4-0.6% | Council tax (varies) |
| Non-resident rental income tax | 24% (19% for EU) | Up to 45% |
| Capital gains tax | 19-26% | Up to 28% |
Best neighborhoods to invest in Madrid
Chamberi
5-6%5,500-7,000 EUR/sqm
Charming neighborhood with strong rental demand. Ideal for long-term rentals.
Salamanca
3-4%8,000-10,000 EUR/sqm
Premium area. High capital appreciation, upscale clientele.
Retiro
4-5%5,000-7,000 EUR/sqm
Near the park, quiet and prestigious. Good balance of yield and appreciation.
Lavapies
6-7%3,500-5,000 EUR/sqm
Rapidly gentrifying. Best yields but higher risk.
Chueca / Malasana
5-6%4,500-6,000 EUR/sqm
Dynamic city center, strong demand for short and long-term rentals.
The investment process in 5 steps
- 1Define your strategy: long-term rental, short-term (Airbnb), or capital appreciation
- 2Simulate your borrowing capacity and total cost with our tools
- 3Find the property with a specialized property hunter
- 4Structure the purchase: personal name, holding company, or Spanish SL
- 5Manage the rental: turnkey management or self-managed
Taxation of rental investment in Spain
- IRNR (non-resident tax): 24% of gross rental income (19% for EU residents)
- IBI (property tax): 0.4-0.6% of cadastral value
- Capital gains on resale: 19-26% progressive
- Double taxation treaties: avoid being taxed twice
- Some expenses deductible (repairs, insurance, management)
Simulate your investment
Calculate your borrowing capacity, total buying cost, and rental yield with our free tools.
Simulate my projectWhy invest with Triadica?
Triadica is based in Madrid, specialized in supporting foreign investors. From property search to rental management.