The advantages of the Spanish market: Why invest in property in 2025?

The Spanish market is becoming increasingly attractive to French investors, particularly in the property sector. With robust economic growth, favourable taxation and an exceptional quality of life, Spain is establishing itself as a prime destination for diversifying one's assets. IMMO 365 Costa Brava, an expert in property investment on the Catalan coast, reveals the many advantages of the Spanish market and why 2025 represents a unique opportunity to invest in regions such as Roses, Empuriabrava, Platja d'Aro and Cadaqués.

A booming Spanish property market

An economic dynamic favourable to investors

The Spanish property market is undergoing remarkable growth. Prices rose by 11.2% in 2024, reaching an average of €2,271 per square metre, a level not seen since 2007. This increase reflects the strength of the Spanish economy and the country's attractiveness to international investors. For 2025, experts are forecasting more moderate but steady growth, with increases of between 4.5% and 5.3%, offering further promising prospects for asset appreciation.

This dynamic can be explained by a persistent imbalance between supply and demand. Spain faces an estimated deficit of 1.2 million homes, creating tension in the market that benefits owners and investors. Coastal areas, particularly the Costa Brava, are seeing particularly interesting growth, with localised increases of between 7% and 9% in certain sought-after areas.

Competitive property prices compared to France

One of the most attractive advantages of the Spanish market is the unrivalled value for money offered by its property. The average price per square metre in Spain is €2,498, which is 35% less than in France, where it exceeds around €3,800. This difference is even greater in metropolitan areas: while Paris has prices exceeding £10,000 per square metre, Madrid and Barcelona remain around £4,000 to £4,800 per square metre.

On the Costa Brava, IMMO 365's flagship destination, the average price is around €3,000 per square metre, three times lower than on the French Riviera for a similar lifestyle. In Roses and Empuriabrava, it is still possible to buy two-bedroom flats for less than €100,000 or houses for around €120,000 in certain areas. This affordability, combined with 40-50% higher purchasing power for French people investing in Spain, is a considerable advantage.

Tax advantages: an attractive tax system for French investors

An advantageous tax regime for non-residents

The Spanish tax system is one of the most significant advantages of the Spanish market for foreign investors. Non-residents of the European Union benefit from a tax rate of 19% on property income and capital gains, compared to 20% to 45% in France for income tax. For capital gains on property, the difference is even more striking: 19% in Spain compared to 36.2% in France for properties held for less than 22 years.

The IRNR (Non-Resident Income Tax) regime also allows up to 35% of gross rent to be deducted for certain expenses, including renovation work, maintenance, electricity, Internet, property tax and loan interest. This tax optimisation significantly improves the net profitability of rental investments.

No wealth tax and Franco-Spanish tax treaty

Unlike France, Spain does not tax real estate assets. The absence of an equivalent to the French IFI (property wealth tax) is a major advantage for property investors. In addition, the tax treaty between France and Spain avoids double taxation, allowing taxes paid in Spain to be deducted from French tax returns.

For substantial investments, it may be advisable to set up a Spanish limited company (SL), with a corporate tax rate of 25%, offering advantages in terms of tax deductions and facilitating the transfer of assets. This structural flexibility is one of the advantages of the Spanish market that savvy investors know how to exploit.

Rental profitability: higher returns than in France

Exceptional returns in tourist areas

The Spanish rental market offers remarkable returns. Investors can expect gross annual returns of between 5% and 8%, or even 8% to 12% for certain well-positioned projects. By way of comparison, the average rental yield in France ranges from 3% to 5%.

On the Costa Brava, rental demand remains strong throughout the year thanks to diverse international tourism and an exceptional climate with 3,300 days of sunshine per year. Towns such as Roses, Empuriabrava and Platja d'Aro benefit from an extended tourist season, allowing owners to maximise their rental income. Periods of high demand, particularly from May to September, generate high occupancy rates and optimal rates.

According to Idealista, rental profitability reached an average of 7.16% nationally in 2024, demonstrating the vitality of the Spanish rental market. The coastal areas of Catalonia perform even better, with yields of up to 8% to 10% for strategically located properties.

Seasonal and long-term rentals: two winning strategies

The Spanish market offers remarkable flexibility in terms of rental strategy. Seasonal rentals, which are very popular in tourist areas, allow you to optimise your income during the high season. On the Costa Brava, well-maintained properties have occupancy rates of over 70% during the summer season, with attractive daily rates.

For investors who prefer stability, long-term rentals also offer advantages. Spanish tax residents who rent out their property on a long-term basis can deduct 60% of their earnings, in addition to property-related expenses. This exceptional tax provision further reinforces the advantages of the Spanish market for long-term rental investment.

The Costa Brava: a privileged market within the Spanish market

Geographical proximity and accessibility

The Costa Brava enjoys a strategic geographical location for British investors. Located just 1 to 2 hours from the British border, this region offers unrivalled accessibility. Girona-Costa Brava and Barcelona-El Prat airports offer regular connections to major British cities, facilitating rental management.