Investment approach
Spain or Portugal: Regimes Compared for a Property Investor
Both countries have closed residency for buying a home. Spain's entry tax depends on the region (6–13%), Portugal's on the buyer's status: 7.5% IMT for a non-resident. Prices rose in both.
The choice comes down to three questions: how much tax you pay on entry and ownership, whether the purchase gives a right to live in the country, and which rental rules apply. The answer to the second is the same for both: each country has closed residency by property purchase, Spain from 3 April 2025 and Portugal from October 2023. On the first and third the picture differs, and it depends on the region and the goal. This article does not judge which country is "better".
What has happened to prices?
Housing has become more expensive quickly in both countries. INE Spain reported a 12.2% annual rise in the housing price index for Q2 2026 (published 7 September 2026). INE Portugal published +16.5% a year for the same quarter, 1.3 points below the previous quarter (17.8%); publication date 22 September 2026. Both indices are national and the two offices do not use identical methods, so the 4.3-point gap cannot be read as "Portugal is growing faster" without caveats.
What taxes apply on purchase?
In Spain the rate depends on the region. In Portugal the scale is common to the mainland but depends on the buyer's status. For resale housing in Spain, ITP (transfer tax) is 6% in the Community of Madrid, a general 7% in Andalusia and 10% to 13% in Catalonia, where a gran tenedor (large property holder) pays 20%. A new build is taxed differently: IVA and ITP.
In Portugal, a purchase of housing other than a permanent residence is subject to the IMT scale (municipal property transfer tax): from 1% on the first part of the value, then steps up to 8% (marginal, up to €633,931). Above €633,931 and up to 1.150853 M€ a single rate of 6% applies, and above 1.150853 M€ a single rate of 7.5%. "Single" means the rate applies to the whole value, not to the part above the threshold. The scale applies to a resident buyer. For a non-resident, the rate on a residential property is always 7.5%, with no reliefs (n.º 10 of art. 17 CIMT, added by Decreto-Lei 97/2026 of 20 May 2026; Portal das Finanças text as of 12 October 2026). The exceptions are a buyer who is already a Portuguese tax resident, will become one within two years, or rents the home out on the terms of the same act; these are read in the text of the act together with a local adviser. On top of IMT there is Imposto do Selo (stamp duty) of 0.8%.
Worked example, not a forecast: a resale home at 1 M€, buyer not a gran tenedor. Portugal (not a permanent residence): IMT €60,000 and Selo €8,000, €68,000 in total for a Portuguese resident; for a non-resident with no exceptions, IMT €75,000 and Selo €8,000, €83,000 in total. Madrid: ITP €60,000. Andalusia: €70,000. Valencian Community: €90,000 (9%; the 11% rate starts only on the value above 1 M€). Catalonia: €93,000 on the first €900,000 plus 12% on the remaining €100,000, €105,000 in total. Notary, registration and lawyers are not included.
What taxes apply to ownership and rental?
Both countries levy an annual property tax. In Portugal, IMI on urban properties is 0.3–0.45% of the tax value (VPT); the municipality picks the exact rate within that range, and the law allows surcharges for vacant properties and certain zones. In Spain the ayuntamiento (town council) sets IBI, see IBI in Barcelona. Both countries also tax large holdings. In Portugal this is AIMI: according to the Portal das Finanças explanation, €600,000 is deducted from the tax value for an individual. In Spain it is the Impuesto sobre el Patrimonio, covered in the article on Impuesto sobre el Patrimonio.
A non-resident declares rental income in Spain on Modelo 210. The 19% rate applies to residents of the EU and EEA where tax information is exchanged, and 24% to everyone else (art. 25.1.a TRLIRNR). For a home that is not rented out and stands empty, a non-resident pays tax on imputed income: 1.1% or 2% of the cadastral value (depending on the date of the cadastral revision), with the same 19% and 24% applied to it. This article does not give rates for non-residents in Portugal: they are checked with the Autoridade Tributária.
What are the residency rules?
| Spain | Portugal | |
|---|---|---|
| Residence permit for buying a home | Abolished from 3 April 2025, Ley Orgánica 1/2025 (BOE); applications filed earlier and existing permits are handled under the old rules | No new applications accepted since October 2023, Lei 56/2023; existing permits are renewed |
| Preferential tax regime for new residents | Beckham law, conditions tied to relocation and employment, see Beckham law and the investor | NHR closed to new applicants from 2024 (with transitional rules for those who had already applied), replaced by IFICI: it is aimed at science, innovation and skilled roles, and the applicant must not have been a Portuguese tax resident in the previous five years (Portal das Finanças) |
| Short-term rental rules | Depend on the city and region; in Barcelona the licences are due to be phased out by November 2028 | Lei 56/2023 suspended new alojamento local registrations, Decreto-Lei 76/2024 of 23 October 2024 lifted the suspension; municipalities may set restrictions, so the rules are read city by city |
Tax residency is determined separately, by days of presence and centre of interests, and it is a question for an asesor fiscal (tax adviser) in each country.
What should you compare for each goal?
For a renovation and resale project, compare the entry tax and the exit tax, taking the region into account. For long-term rental, look at the limits on price: in Spain these are stressed-market zones under Ley 12/2023, whose list and deadlines change, and Real Decreto-ley 29/2026 of 6 October 2026 changes the rental rules further and awaits approval in Congress.
DNPI Capital works only in Barcelona and its suburbs, so Portugal is described from open data. Spanish taxes for a foreign buyer are collected on the tax map page, and you can run a project through the calculator.
Questions and answers
Where is the purchase tax lower, in Spain or Portugal?
It depends on the region, the price and the buyer's status. On 1 M€, IMT and Selo in Portugal come to €68,000 for a resident and €83,000 for a non-resident (no exceptions), ITP in Madrid is €60,000, in Andalusia €70,000, in the Valencian Community €90,000 and in Catalonia €105,000.
Does buying property give a right of residence?
Not in Spain (since 3 April 2025) and not in Portugal (since October 2023). Other grounds for residence remain, and they are checked separately.
Where are prices rising faster?
INE Portugal: +16.5% over the year to Q2 2026. INE Spain: +12.2%. The indices use different methods and say nothing about next year.
Can I rent a home out short-term?
In both countries the short-term rental rules are set by the city and region and have changed in recent years. What needs checking is the rule in force for the specific address.
