How to estimate the net rental yield on a new build in Spain
Gross yield divides the rent by the price. Net yield is what matters: subtract vacancy, management, running costs and Spanish tax, and divide by the full cost of buying, including IVA and AJD. Here is the method, with an illustrative example.
By Investidad advisory team · Last reviewed 16 Oct 2026
Gross and net yield
Gross yield is the annual rent divided by the purchase price. It is quick to compare but flatters every property. Net yield is the rent you actually keep after costs and tax, divided by everything you paid to own the home. Two homes with the same gross yield can differ by several points net, depending on occupancy, fees and the type of let.
- Total cost to buy: price plus IVA (10%, or IGIC 7% in the Canaries), AJD for the region, notary, registry and legal fees, and furniture.
- Realistic rental income: nightly or monthly rent multiplied by the occupancy you can actually achieve.
- Minus operating costs: management, cleaning, platform commission, utilities, community fees, IBI, insurance and maintenance.
- Minus Spanish tax on the rent.
- Net yield = what remains ÷ total cost to buy.
Costs to deduct
- Management
- HOLIDAY LETOften a significant share of the rent, plus cleaning per stay
- LONG-TERM LETUsually lower, or none if you manage it yourself
- Platform commission
- HOLIDAY LETYes, on most bookings
- LONG-TERM LETNo
- Utilities and internet
- HOLIDAY LETPaid by you
- LONG-TERM LETUsually paid by the tenant
- IBI and refuse tax
- HOLIDAY LETYes; a surcharge may apply to tourist homes in stressed areas
- LONG-TERM LETYes
- Insurance
- HOLIDAY LETHome plus holiday-let liability cover
- LONG-TERM LETHome, often plus rent-guarantee cover
- Furniture replacement and repairs
- HOLIDAY LETHigher wear
- LONG-TERM LETLower
- Vacancy
- HOLIDAY LETSeasonal; low months can be very quiet
- LONG-TERM LETGaps between tenants
| COST | HOLIDAY LET | LONG-TERM LET |
|---|---|---|
| Management | Often a significant share of the rent, plus cleaning per stay | Usually lower, or none if you manage it yourself |
| Platform commission | Yes, on most bookings | No |
| Utilities and internet | Paid by you | Usually paid by the tenant |
| Community fees | Yes; can be raised by up to 20% for tourist homes | Yes |
| IBI and refuse tax | Yes; a surcharge may apply to tourist homes in stressed areas | Yes |
| Insurance | Home plus holiday-let liability cover | Home, often plus rent-guarantee cover |
| Furniture replacement and repairs | Higher wear | Lower |
| Vacancy | Seasonal; low months can be very quiet | Gaps between tenants |
A new build helps on the cost side: the LOE warranty periods cover defects in the early years, and an A-rated home with aerothermal heating keeps utility bills down when you pay them. Compare the full running costs in the cost of ownership calculator.
Spanish tax on the rent for non-residents
Non-residents pay IRNR on Spanish rental income, declared on Modelo 210:
- EU, Iceland, Norway, Liechtenstein
- RATE19%
- TAXED ONRent minus deductible expenses linked to the letting
- Anywhere else (including the UK and US)
- RATE24%
- TAXED ONGross rent, with no expenses deducted under the statute
| OWNER RESIDENT IN | RATE | TAXED ON |
|---|---|---|
| EU, Iceland, Norway, Liechtenstein | 19% | Rent minus deductible expenses linked to the letting |
| Anywhere else (including the UK and US) | 24% | Gross rent, with no expenses deducted under the statute |
The gap between 19% on net and 24% on gross is large. In July 2025 the Audiencia Nacional allowed a US resident to deduct expenses under the non-discrimination clause of the Spain–US tax treaty; whether you can rely on that depends on your country and your case, so ask a tax advisor. For months the home is not let, a non-resident is also taxed on an imputed income based on the cadastral value. How the Spanish tax is treated at home depends on your country of residence: see the market pages and a home-country advisor.
An illustrative example
Illustrative figures only, for a two-bedroom new-build apartment on the Costa del Sol let long term to one tenant, owned by an EU resident. Every number is an assumption; replace each with real quotes for the home you are considering.
- Price
- ILLUSTRATIVE AMOUNT€300,000
- IVA 10% + AJD 1.2% (Andalucía)
- ILLUSTRATIVE AMOUNT€33,600
- Notary, registry, lawyer (estimate) and furniture
- ILLUSTRATIVE AMOUNT€15,000
- Total cost to buy
- ILLUSTRATIVE AMOUNT€348,600
- Rent: €1,300 a month, 11 months let
- ILLUSTRATIVE AMOUNT€14,300
- Community fees, IBI, refuse tax, insurance, maintenance
- ILLUSTRATIVE AMOUNT– €3,000
- Letting agent fee (assumed)
- ILLUSTRATIVE AMOUNT– €1,000
- Net before tax
- ILLUSTRATIVE AMOUNT€10,300
- IRNR at 19% on net (EU resident, simplified)
- ILLUSTRATIVE AMOUNT– €1,957
- Net after Spanish tax
- ILLUSTRATIVE AMOUNT€8,343
| ITEM | ILLUSTRATIVE AMOUNT |
|---|---|
| Price | €300,000 |
| IVA 10% + AJD 1.2% (Andalucía) | €33,600 |
| Notary, registry, lawyer (estimate) and furniture | €15,000 |
| Total cost to buy | €348,600 |
| Rent: €1,300 a month, 11 months let | €14,300 |
| Community fees, IBI, refuse tax, insurance, maintenance | – €3,000 |
| Letting agent fee (assumed) | – €1,000 |
| Net before tax | €10,300 |
| IRNR at 19% on net (EU resident, simplified) | – €1,957 |
| Net after Spanish tax | €8,343 |
The point is not the result but the gap: a 4.8% gross yield becomes about half that once purchase costs, running costs and tax are counted. Neither figure is a forecast; rents, occupancy and costs change, and we make no promise of income or capital growth.
Questions buyers ask
- Should I calculate yield on the price or on the total cost?
- On the total cost. IVA, AJD and fees are money you have invested and do not get back, so leaving them out overstates the return.
- Is a holiday let always more profitable than a long-term let?
- Not necessarily. Higher nightly rents are offset by vacancy, management, cleaning and platform fees, and a licence may not be available. Model both before you buy.
