Property Investment on the Costa Blanca

Why the Costa Blanca

The Costa Blanca accounts for around 21% of all foreign-buyer property transactions in Spain — more than the Costa del Sol and the Balearics combined. Three things drive that: 300+ days of sunshine, a 244 km coastline within 90 minutes of two international airports, and pricing that remains 30–60% below comparable Côte d'Azur, Tuscan or Algarve property. Average price per m² across the province sits at €2,950 in 2026, up 7.2% year-on-year.

For investors, the appeal is the combination of capital growth and rental demand. The northern Costa Blanca (Dénia to Altea) attracts second-home buyers and long-term retirees — premium prices, slow but steady appreciation. The southern Costa Blanca (Torrevieja to Pilar de la Horadada) trades on volume and yield — lower prices, faster turnover, stronger holiday-let returns.

Average prices and yields by town

Strategies that actually work in 2026

• ✦Buy-to-let (long-term residential) — 4–6% gross yields, low management overhead, protected by LAU rental law. Best in Alicante city, El Campello, university towns.
• ✦Holiday-let (tourist licence required) — 6–8% gross yields if managed well, 4–5% if outsourced. Best in Calpe, Benidorm, Orihuela Costa, Jávea.
• ✦New-build off-plan — 15–25% capital appreciation between reservation and delivery if you pick the right developer and area; downside is illiquidity for 18–24 months.
• ✦Renovation flips — €60–€90k margins on a €250k house in the northern villages; needs hands-on management and a trusted builder.
• ✦Golf-community resale — buy, hold, rent annually to winter-escaping Northern Europeans; stable 4–5% yields with low vacancy.
• ✦Commercial — beach-front cafés and tourist-zone retail; high gross yields (7–10%) but high operational risk.

Financing as a non-resident

Spanish banks lend up to 60–70% of valuation to non-residents (versus 80% to residents), at fixed rates of 3.2–4.1% in mid-2026. The valuation (tasación) is binding — banks lend on the lower of price or valuation, so a property bought 10% above valuation requires that extra equity upfront. Typical mortgage cost: 1–2% of the loan in arrangement, valuation, notary and AJD tax.

Required documents: 3 months of payslips or business accounts, 12 months of bank statements, two years of tax returns, debt schedule, NIE certificate. Spanish banks favour Northern European applicants — UK, Dutch, German and Scandinavian salaried buyers consistently get the best terms.

All-in transaction costs

Ongoing costs — what eats the yield

• ✦IBI (council tax): 0.4–1.1% of cadastral value annually — typically €400–€1,800/year.
• ✦Community fees: €40/month (small apartment block) to €350/month (premium gated community with pool, gym, security).
• ✦Insurance: €250–€600/year for buildings cover; mandatory if mortgaged.
• ✦Property management (long lets): 8–10% of monthly rent.
• ✦Property management (holiday lets): 18–25% of revenue + cleaning per turnover.
• ✦Tourist tax (where applicable): €0.50–€2.00/person/night.

Tax for non-resident landlords

Non-resident landlords pay 19% income tax on net Spanish rental income (EU/EEA residents) or 24% on gross (non-EU/EEA — including UK post-Brexit and US). Quarterly returns via Modelo 210. Capital gains on a future sale are taxed at 19% (EU) or 24% (non-EU), with a 3% withholding by the buyer at completion (Modelo 211) that you reclaim against the actual liability.

Becoming Spanish tax-resident — usually triggered by spending 183+ days per year here — switches you to the residents' progressive scale (19–47%) but unlocks deductions, allowances and treaty credits that often produce a lower effective rate, especially if you have multiple properties.