Why gross yield misleads
Gross yield is annual rent divided by the purchase price. A €300,000 property let at €1,250 a month yields 5% gross. The figure is useful for comparing areas, but it does not tell you what you will actually receive. It misleads in two ways.
- The top line is too high. Local taxes, running costs, vacancy, management and maintenance still have to come off.
- The bottom line is too low. You invest not only the price but also the purchase costs. In Andalusia, resale homes carry a transfer tax (ITP) of 7%, as of 2026. With notary, land registry, lawyer and getting the flat ready to let, the capital invested is typically 9% to 12% above the price. See also our costs page.
Three figures are therefore meaningful: gross yield on price (for comparison only), net yield before tax on total capital invested, and net yield after tax. Capital growth does not belong in any of them; you only receive it when you sell.
Indicative gross yield and selling speed by area
The figures below are estimates from our local partners based on asking prices, with data up to June 2026. Absorption is annual sales divided by properties on the market: above 100% the stock shrinks, below 80% it builds up.
| Area | €/m² (indicative) | Gross yield | Absorption | Months of stock |
|---|---|---|---|---|
| Manilva | 3,000 | 7.5% | 79% | 15.2 |
| Torremolinos | 3,620 | 7.2% | 104% | 11.5 |
| Benalmádena | 3,535 | 6.8% | 97% | 12.4 |
| Málaga city | 3,790 | 6.5% | 74% | 16.2 |
| Fuengirola | 3,565 | 6.5% | 95% | 12.6 |
| Nerja | 3,915 | 6.2% | 92% | 13.0 |
| Mijas Costa | 3,370 | 6.0% | 89% | 13.4 |
| Mijas | 3,190 | 5.9% | 83% | 14.4 |
| Estepona | 3,510 | 5.8% | 82% | 14.7 |
| Rincón de la Victoria | 3,455 | 5.8% | 97% | 12.4 |
| Marbella | 5,720 | 5.5% | 80% | 15.0 |
| Nueva Andalucía | 6,160 | 4.5% | 87% | 13.8 |
Expensive is not the same as profitable
The most expensive areas yield the least. Rents follow local incomes and housing demand; purchase prices also follow international capital and expectations of growth. In Marbella you are mainly buying market depth and an international pool of buyers, not current income.
A high yield and a quick sale do not always go together either. Manilva has the highest indicative yield but a slow market. Málaga also sells relatively slowly, because supply has grown faster than transactions. Torremolinos combines both: 7.2% and the only absorption rate above 100%. Benalmádena and Fuengirola are close behind. A higher yield in a slow market is often compensation for lower liquidity, and a 5% discount on sale can wipe out several years of extra income. See also selling speed by area.
Seven costs between gross and net
For a long-term let flat in a development, the following items together usually take 35% to 45% of the rent: property tax (IBI) and refuse charge, community fees, insurance, maintenance, vacancy, management and a reserve for special levies. For holiday letting this rises to 60%–70%. A rule of thumb: multiply the gross yield by 0.6 for a first estimate before tax.
Tax depends on where you are tax resident, not on the property. As of 2026, a non-resident living in the EU, Iceland, Norway or Liechtenstein pays 19% on net income, after deducting expenses and depreciation of 3% a year on the building value. A non-resident living outside the EEA pays 24% on gross rent, with no deductions at all. Have your own position reviewed by an independent tax adviser.
Worked example: a two-bedroom flat in Fuengirola
A 78 m² flat bought for €286,000 in cash. With transfer tax, notary, registry, lawyer and furnishing, the capital invested comes to €316,780. Long-term market rent is around €1,250 a month, or €15,000 a year. After €6,220 of costs, €8,780 remains before tax.
- Published gross yield for the area: 6.5%
- Gross on purchase price: 5.2%
- Gross on capital invested: 4.7%
- Net before tax: 2.8%
- Net after tax, EU-resident owner: 2.6%
- Net after tax, owner resident outside the EEA: 1.6%
In the same example, holiday letting brings in €24,900 gross but only €8,149 before tax, slightly less than long-term letting. See also holiday versus long-term letting and property management. All figures are indicative and not a forecast.
CostaVista guides you in modelling a specific property, using the building's actual running costs and your own tax residence as the starting point. That way you compare areas on the return you would actually receive. Get in touch or browse our current selection.
General information, as of October 2026. This is not legal, tax or financial advice; for your own situation, consult an independent specialist.