Investing in a holiday home in Spain with rental? How it really works.

"Can I really reclaim the VAT?" — "Can I use it myself as well?" — "And is that return actually realistic?" These are questions we've been getting from clients more and more often in recent months. Honestly, we had those same questions ourselves.

As a Property Finder we see dozens of new-build projects pass by every year. Beautiful brochures, attractive photos and promises about rental and returns. But we believe we can only advise our clients well if we understand exactly how such a concept works. So we looked into it thoroughly: we spoke with developers, rental organisations and tax advisers, and examined the contracts, the terms and the way the rental is organised.

And really we reached one conclusion: this is not an ordinary holiday home.

A different way of investing

Many people think of an apartment in Spain as a second home they visit a few times a year themselves. That is still the most common form of purchase. But there is now another option too.

At various new-build projects on the Costa Blanca and Costa Cálida, apartments are specially developed for tourist rental. Not as a hotel, but as high-quality holiday homes that are fully professionally managed. So you don't just buy an apartment — you buy a property that is ready for both rental and personal use from day one.

Everything is already arranged

During our visits to various projects, one thing immediately stood out: almost everything is already arranged before the first owner receives the keys. The property is delivered fully furnished — furniture, kitchen equipment, lighting, décor, bedding, towels, air conditioning. Even the small household items are there. The apartment is literally ready to welcome guests.

That is a big difference from a regular holiday home, where you often first invest thousands of euros in furnishing it completely.

But can I still use it myself?

Honestly, that was one of our first questions too. Fortunately, the answer is usually: yes. In the projects we reviewed, the owner may use the property themselves. At a current project near Torre de la Horadada, for example, that is up to four months a year, spread across the year. In July and August a maximum of two weeks per month applies, so that sufficient rental opportunities remain in the high season too.

For many buyers that turns out to be more than enough: they enjoy their apartment several times a year, while the property is professionally rented out for the rest of the year.

And who manages the rental?

That may well be the biggest difference: you don't have to do anything yourself. No adverts, no Airbnb account, no cleaning, no key handovers, no phone calls when an air conditioner breaks down. At the project we reviewed, a professional organisation handles bookings, guest reception, cleaning, maintenance, linen, inspections and periodic reports, among other things.

For many people, that complete peace of mind is precisely the main reason to choose this type of concept. One thing does always remain the owner's responsibility: the legal guest registration via SES Hospedajes. We can take care of that too, completely, with our check-in app.

And what about the return?

That is perhaps what we're asked about most often. Our answer is always the same: never be swayed by an attractive percentage alone. A brochure can show a return projection, but ultimately factors such as location, occupancy rate, rental prices, management costs and market conditions determine the actual result.

That is why we always look beyond the figures alone. Is the location good? How experienced is the rental organisation? Are the terms clear? What does the contract look like? Only when the overall picture is right do we consider a project interesting.

A tax benefit many people don't know about

During our conversations with specialists, we discovered something else that surprises many buyers. With some tourist rental concepts, the property is bought as part of a VAT-taxed rental activity. As a result, depending on the chosen structure and your personal tax situation, it may be possible to reclaim the Spanish VAT paid.

That can make a considerable difference. Suppose an apartment costs € 395,000 — 21% Spanish VAT is charged on that. When all conditions are met and this VAT can be reclaimed, the net investment turns out considerably lower than for a comparable property bought purely for private use. This does not mean that every buyer automatically gets this amount back.

That sounds attractive, but we think it's important to be honest about it: this is not a standard arrangement that automatically applies to every buyer. It depends on the chosen structure, the applicable legislation and your personal situation. So always seek guidance from a specialised tax adviser. The project documentation also indicates that tax registration and periodic returns are required for this. Read more about the VAT side of rental in our guide on VAT and tourist rental in Spain.

Who is this interesting for?

We notice that these buyers in particular are enthusiastic about this concept: people who want to spend a few months a year in Spain themselves, buyers who don't want any worries about rental and management, investors who value professional management, and people who want to buy a property now for later.

And who is it not for?

It's just as important to us to say when this concept is less suitable. Do you want to be able to use your property freely at any time of year? Do you want to spend six or eight months a year in Spain yourself? Or do you want to arrange the rental entirely yourself? Then a regular property probably suits your wishes better. And we will always say so honestly.

Why we look into this

As a Property Finder we don't sell standard properties. We guide people through one of the most important purchases of their lives. Part of that is critically examining new concepts before we recommend them.

That is exactly why we take the time to study the terms, ask the right questions and look together with our clients at what really suits them. Can't come and view yourself? With CasaScout we visit both the project and its surroundings for you. And with our buyer's guidance you can be sure the legal and tax side is right too.

Our conclusion

A tourist rental concept is no miracle solution. But it is also much more than an ordinary holiday home. For the right buyer it can be a smart combination of personal use, professional management and an investment for the future.

That is why we think it's important that you don't just see the brochure, but also understand how the concept works. Only then can you make a well-considered decision. And that is exactly what we're happy to help you with.