For years, the Costa Blanca has been attracting people looking for a holiday apartment, a second home, or a rental property. This impression isn't solely due to the number of new investments and foreign residents. In 2025, non-Spanish residents accounted for 43.29% of apartment purchases in Alicante province – the highest figure among Spanish provinces.
The large share of foreign buyers confirms the international nature of the market, but it doesn't guarantee the profitability of every property. An apartment near the sea can be a good investment, but only if its location, maintenance costs, rental options, and legal status align with the owner's specific plans.
Therefore, it is worth starting to invest in real estate on the Costa Blanca not by looking at photos, but by determining what a given property should do for us.
Legal and tax status of the article: July 2026.
First, determine the purpose of purchasing the property
The slogan "investment property in Spain" may cover completely different plans.
For some, it will be an apartment used by a family for a few weeks a year and rented out during the remaining periods. Others are looking for a property exclusively for short-term or year-round rentals. Other buyers are primarily concerned with capital preservation and subsequent resale.
The most common models are:
- own use combined with rental,
- tourist and short-term rentals,
- medium or long-term rental,
- purchasing real estate with the intention of increasing its value,
- renovation and subsequent sale,
- purchase of a premises in an investment managed by an operator.
Each of these models requires a different type of property. A seafront apartment might be perfect for a vacation, but it might not always be the best choice for a tenant planning a multi-month stay. Meanwhile, an apartment in a year-round part of the city might generate more stable interest in the off-season, even though it's not directly on the beach.
Profitability is not just about the rental price
One of the most common mistakes is to calculate the refund based solely on the purchase price and the expected booking revenue.
If an apartment costs €250,000 and its potential annual income is €20,000, this does not automatically mean a profitability of 8%.
The following must be deducted from revenues:
- periods without reservation,
- platform and intermediary commissions,
- lease management,
- cleaning and preparation of the apartment,
- energy, water and internet, if paid by the owner,
- community fees, i.e. comunidad,
- local property tax IBI,
- insurance,
- repairs, air conditioning service and equipment replacement,
- taxes on rental income,
- financing costs if the purchase is made with a loan.
Only after taking these items into account can we talk about net profitability.
When considering a vacation rental property, it's also important to remember that high occupancy in July and August doesn't necessarily mean equally high demand throughout the rest of the year. Therefore, when analyzing rentals, it's important to use realistic rates and actual data for similar properties, rather than relying solely on a best-case scenario.
The location should correspond to the investor's plan
The Costa Blanca is not a single, uniform market. Large cities like Alicante and Torrevieja operate differently, while year-round resorts like Orihuela Costa operate differently, and smaller holiday resorts operate differently still.
When choosing a location, it is worth checking not only the distance from the beach, but also:
- whether the area operates all year round,
- how far away are shops, restaurants and services,
- is it possible to get around without a car,
- what is the access to transport and the airport like,
- are there schools, medical facilities and workplaces nearby,
- whether parking during the season is not a problem,
- what investments are planned in the immediate vicinity,
- whether the property is located on a busy street or in a place that operates at night.
The building itself is also important for renting. An elevator, terrace orientation, parking space, air conditioning, number of bathrooms, and convenient access to the beach often influence interest more than the designer accessories visible in photos.
Primary or secondary market?
Both solutions may make investment sense, but they involve different costs and risks.
Property from the primary market
New apartments often offer modern common areas, improved energy efficiency, elevators, garages, and features sought after by vacation rentals.
When purchasing a new apartment from a developer, VAT is generally charged at a rate of 10%. In the Valencian Community, a general rate of 1.4% currently applies to notarial deeds subject to the AJD, unless a preferential rate applies.
Before signing the contract, you should check, among other things, the building permit, land ownership, payment schedule, guarantees for the funds paid, scope of equipment and the investment completion date.
Property from the secondary market
The resale market offers the opportunity to view a specific apartment, building, and neighborhood. It's often easier to assess the true costs of the community, the condition of the common areas, and the rental potential.
From June 1, 2026, the general ITP rate for property purchases in the Valencian Community is 9%. If the property value exceeds one million euros, the rate is 11%, unless specific rules or exemptions apply.
It's also important to check the property's reference value, or valor de referencia. When calculating the ITP, the tax base is generally the reference value, unless the purchase price or declared value is higher, in which case tax is charged on the higher amount.
Taxes also include individually calculated notarial fees, registry entries, legal services, any bank valuations, and loan costs. Therefore, it's not advisable to use a single percentage of additional costs for all transactions.
What should I check before paying for my reservation?
Buying a property in Spain is a safe and orderly process, provided that appropriate verification is carried out before signing the documents.
The basic document is the nota simple from the Registro de la Propiedad. It contains information about the owner and current rights and encumbrances on the property, such as mortgages, foreclosures, and easements.
You should also check:
- compliance of the area and description of the property in the register and cadastre,
- any mortgage encumbrances and other entries,
- arrears to the owners' community,
- payment of IBI tax,
- legality of extensions, terrace construction or changes inside the premises,
- a document regarding the use of the property, required in a given municipality,
- community statute and regulations,
- planned renovations of common areas and approved subsidies,
- possibility of implementing the planned type of rental.
A foreign buyer needs a NIE number, which is an individual identification number used for economic and administrative formalities in Spain.
Particular care should be taken with reservation agreements and arras agreements. They should clearly state what will happen to the deposit if a legal audit reveals a problem, the bank refuses financing, or the property cannot be used as intended by the buyer.
Being cautious doesn't mean abandoning the purchase. It just means checking your documents first and then making a financial commitment.
Tourist rentals on the Costa Blanca - what should you check?
Not every beachfront property can automatically qualify for legal tourist rentals.
In the Valencian Community, premises used as a tourist accommodation must meet the requirements of regional and municipal regulations and the rules in force in the given owners' community.
One of the basic documents is confirmation of the planned use's compliance with the municipality's urban planning regulations. The Valencian Community's tourism law requires a document confirming urban compatibility and an entry in the regional tourism register.
If tourism activities are to commence in a building owned by a community of owners after April 3, 2025, prior, express approval by the community by a three-fifths majority of the owners and shares is required. It is also necessary to check whether the building's bylaws prohibit such activities.
Additionally, the national Registro Único de Arrendamientos (Registry of Rentals) system is required to offer short-term rentals through online booking platforms. The listing must have a valid registration number assigned to the specific property or accommodation unit.
Municipal regulations may differ between Torrevieja, Alicante, Benidorm, Orihuela Costa, and smaller towns. Therefore, tourist rental options for a specific address should be checked before purchasing, not after picking up the keys.
You shouldn't assume that the "apartment is licensed" information automatically resolves all issues. It's important to check the validity of the listing, the owner's details, the consistency of the property with the documentation, and the conditions that apply after the change of ownership.
Long-term rental can be an equally good strategy
Investing on the Costa Blanca doesn't have to mean just week-long holiday bookings.
Long-term or seasonal rentals may be of interest to owners who prefer:
- fewer tenant changes,
- lower cleaning and maintenance costs,
- more predictable cash flow,
- less dependence on the tourist season.
In this case, year-round services, transportation, access to schools, hospitals, and workplaces are more important. Sometimes, an apartment located a kilometer from the beach in a year-round part of town is a better choice than an apartment in a typically seasonal complex right by the sea.
The type of contract and its termination rules should be tailored to the actual nature of the tenant's stay. Tourist, seasonal, and permanent housing leases are subject to different rules, so the name at the beginning of the document does not necessarily determine its nature.
How is rental income taxed?
An owner who remains a Polish tax resident and receives income from a property located in Spain should settle the income in accordance with Spanish regulations and take into account the rules arising from the double taxation treaty.
For residents of European Union countries, including Poland, the standard Spanish tax rate on rental income is 19%. Expenses directly related to earning income can be deducted, provided they are properly documented and meet the conditions set out in the regulations. For most other non-residents, the rate is 24%.
Settlement is carried out on the Modelo 210 form. From 2024, rental income may be grouped and settled annually in certain situations, while for periods in which the property was not rented, there may be an obligation to settle the income attributed to the property.
The exact settlement method depends on the owner's tax residency, ownership interest, apartment use, and the type of expenses incurred. It's worth discussing this with an accountant or advisor before the rental begins to ensure accurate collection of invoices and payment confirmations from the outset.
Is property value increase guaranteed?
No. Properties on the Costa Blanca can increase in value, but this depends on the location, building condition, supply of new developments, financing costs, and the economic situation.
Properties with features that cannot be easily replicated typically have a greater potential to retain value:
- a really good location,
- open view,
- convenient access to the beach,
- large terrace or private solarium,
- parking space in a densely built-up area,
- functional layout,
- low and predictable maintenance costs,
- regulated legal status.
Just saying "five minutes from the sea" isn't enough. The access route, terrain, neighborhoods, parking options, and what might be built in front of your windows in the future are also important.
The most common mistakes when buying an investment property
The first mistake is choosing a property solely because the buyer likes it. An apartment intended for rental should also meet the needs of future guests or tenants.
The second is to calculate profitability based on the highest price per night in the season, without taking into account empty dates and costs.
The third is the purchase of premises for tourist rental without prior verification of city regulations, the urban compatibility document and the position of the owners' association.
The fourth is the omission of the reference value when calculating the ITP tax.
Fifth, the assumption is that a "no-renovation" property won't require any expenses. Even a well-maintained apartment needs regular maintenance, equipment refreshment, and a reserve for repairs.
It's also worth being cautious about claims of guaranteed returns. If a developer or operator offers a guaranteed income, be sure to check the duration of the guarantee, how the amount is calculated, the scope of costs deducted from the income, the owner's ability to use the apartment, and the contract termination policy.
What does a sound investment process look like?
A well-conducted purchase can be divided into several stages:
- Determining the purpose of the investment and its planned use.
- Establishing a total budget including taxes and costs.
- Selection of the location and group of future tenants.
- Analysis of real revenues and all expenses.
- Checking the documents and possibilities of the selected rental type.
- Signing a contract containing appropriate safeguards.
- Finalization of the transaction at the notary's office and entry in the Registro de la Propiedad.
- Real estate preparation, lease management and tax settlements.
This process may seem less glamorous than spontaneously falling in love with a terrace while on vacation, but it significantly increases the chance that the purchase will serve the owner well for years to come.
Is it worth investing in real estate on the Costa Blanca?
The Costa Blanca boasts a strong international real estate market, a diverse range of offerings, and many destinations that operate beyond peak season. However, this doesn't mean that every apartment is automatically a good investment.
The best results are achieved by combining three elements:
a well-chosen location, a properly calculated financial model and thorough legal control.
At Baju Baju Properties, we analyze properties not only from a purchase perspective. Thanks to our experience renting apartments through Vamos España, we also know what guests are looking for, which solutions work best in practice, and what costs should be considered before making a decision.
It's not about finding any apartment by the sea.
It's about choosing a property that meets the owner's specific plan.
FAQ - Investing in real estate on the Costa Blanca
What tax will I pay when purchasing a property on the secondary market?
As of June 1, 2026, the general ITP rate in the Valencian Community is 9%. For properties valued at over €1 million, the general rate is 11%. The tax base may be the reference value if it is higher than the purchase price.
What taxes apply when purchasing a new apartment?
When purchasing a new residential property from a developer, 10% VAT and the AJD generally apply. The general AJD rate in the Valencian Community is currently 1.4%, unless the buyer is eligible for a preferential rate.
Can every property be rented for tourist purposes?
No. You must check municipal regulations, urban planning compliance, eligibility for inclusion in the tourist register, the association's statute, and the requirements for its consent. Advertising short-term rentals on online platforms also requires the correct registration number.
Does buying a property in Spain require a NIE number?
Yes. The NIE number is a foreign national identifier used for Spanish legal, tax and administrative purposes.
Does investing on the Costa Blanca guarantee profit?
No property guarantees a profit solely because of its location on the Costa Blanca. The outcome depends on the purchase price, location, costs, management, legal rental options, and market conditions.
