Property News from Spain

Relocating to Spain offers an enriching lifestyle and new opportunities, but careful financial planning is essential to making the most of your move. As an expat, understanding how residency status, tax obligations, and managing foreign income will impact your finances can help you build a stable foundation. This guide provides an overview of the basics you’ll need to know, from determining your residency status and visa type to handling taxes on income earned abroad.

Navigating residency and visas

When moving to Spain, choosing the right visa is an important first step. Residency status affects your eligibility for work, the tax you pay, and your access to public services. Below, we explain some basic concepts on this subject.

Visa types for expats in Spain

The visa you need depends on your income and plans in Spain. Here are the main options:

• Non-Lucrative visa: Designed for retirees or those with passive income from outside Spain, this visa allows you to live in Spain but not to work.
• Work visa: Necessary if you plan to work for a Spanish employer or start a business in Spain.
• Other visa types: Spain offers additional options, such as student visas, entrepreneur visas, and family reunification visas for expats joining family members.

For a detailed overview of each visa type, requirements, and application steps, refer to our complete guide to Spanish visas.

Understanding tax residency

Tax residency is determined by where you live and where you have economic ties. In Spain, you’ll generally be considered a tax resident if:

Spain's housing market is experiencing one of its most dynamic periods, with the price of free-market housing surging by a remarkable 12.7% in the second quarter of 2025, according to the National Institute of Statistics (INE). This marks the largest annual increase since the first quarter of 2007 and the second-highest on record.

A Market Driven by Imbalance

Multiple sources and experts point to a fundamental imbalance between supply and demand as the primary driver of this trend. While demand remains robust, the supply of available homes has decreased significantly, with some reports indicating a 20% reduction in homes for sale over the last 12 months. This scarcity is a key factor pushing prices higher.

Key Drivers of the Price Surge:

Chronic Supply Shortages: Spain's construction sector has struggled to keep pace with demand. New housing completions are well below the number of new households being formed, creating a structural deficit of hundreds of thousands of homes. This is due to a combination of factors, including rising construction costs, labor shortages, and extensive bureaucratic processes for building permits.

Strong and Diverse Demand: Demand is coming from various sources, including domestic buyers and a surge in foreign investment. International buyers now account for over 20% of all property transactions nationwide, with some coastal regions seeing foreign buyer participation as high as 40-45%. This is driven by Spain's attractive lifestyle, climate, and perceived affordability relative to other European countries.

Favourable Lending Conditions: The European Central Bank's interest rate cuts throughout 2024 and early 2025 have made mortgages more attractive and increased buyer purchasing power. This has encouraged more people to enter the property market, further stimulating demand.

Regional and Property Type Disparities:

The price increases are widespread, with all autonomous communities showing double-digit annual rates. Hotspots for growth include Murcia, Aragon, La Rioja, Madrid, and the Valencian Community. The price of used homes has seen a steeper rise (12.8%) compared to new homes (12.1%), although new builds are still highly sought after due to their energy efficiency and modern amenities.

Future Outlook and Market Forecasts:

While the market is hot, analysts are not calling it a speculative bubble like the one that preceded the 2008 crash. Instead, they see the current situation as a structural issue of high demand and limited supply. Forecasts for the coming years vary slightly but generally predict continued, albeit moderating, price growth.

Most experts agree that prices will continue to rise by 4% to 9% through the rest of 2025.

For 2026, growth is expected to moderate to around 3-5% as the market stabilises.

The long-term outlook suggests that structural factors like chronic undersupply and demographic trends will continue to exert upward pressure on prices for the foreseeable future.

The search for a home in Spain has become a challenge for many, as the market's strong performance, driven by a powerful mix of economic strength and limited housing stock, shows no signs of slowing down.
 

As a highly sought-after location for a sunshine-filled life overseas, property for sale in Mallorca is usually snapped up very quickly – making it a great investment. This also means the largest of the Balearic Islands is among Spain's most expensive places to buy a home – but did you know that there are still plenty of houses and apartments for sale in Mallorca for under €200,000?

It's true that homes in this price bracket are more limited in number, but they're not as rare as you would think, especially if you don't need much space, or you're able and willing to renovate them.

Low-cost Mallorca holiday homes

Whether you're seeking a sunny retreat for relaxing and unwinding, or a sound long-term investment you can let out to other holidaymakers, you'll find plenty of apartments for sale in Mallorca for under €200,000. Better still, many are near beaches, have access to communal pools, or both.

Studio flats big enough for a single person to live in year-round, or for a couple on extended holidays, are found in popular coastal areas like Palma, Alcúdia, and Manacor beach for between €100,000 and €135,000. With all amenities close by, and the splendid Mediterranean weather, you won't need to spend much time indoors. But these properties are typically modern and stylish, so your comfort's assured on those days when you don't feel like venturing outside.

Everywhere in Mallorca is, at most, a short drive from the beach, but if you're not directly on the coast, your money goes further. Property for sale under €200,000 offers more space in attractive inland towns like Manacor and Inca. Here, two-bedroom flats start from about €140,000.

Affordable Mallorca homes to renovate

Putting your own stamp on a new home can be hugely satisfying and, when it's in a Spanish holiday hotspot, a superb investment. Depending upon how much extra you're able to spend, you can catch a bargain.

Property for sale in Mallorca under €200,000 frequently includes spacious villas in major tourism belts needing refurbishment. They may already have the necessary mains utility systems in place, but require new fixtures and cosmetic upgrades. Upon completion, you'd have a comfortable, high-class home suitable as a family residence, and make a significant resale profit.

Check out our selection below of properties for sale under €200,000 in Mallorca for inspiration.