Buying a holiday home in Spain that you don't let out: what it costs to own each year
The real question about a Spanish holiday home you’ll never let out isn’t what it earns. It’s what you’ll happily pay each year to keep it entirely your own.
In October 2026, Spanish Property Insight reported that Spain had added 10% VAT to short-term holiday lets, on top of the licensing rules most municipalities have tightened for years. If your plan was to let the place out when you weren’t there and cover the running costs that way, the maths just got harder. This guide is about a holiday home that is kept for your own use and not let. The running costs and taxes below apply to that case.
The letting shortcut is closing, and you may not want it anyway
The familiar logic, buy it, let it when you’re away, let the rental cover the costs, is being taxed and regulated out of its appeal. The 10% VAT sits on top of tourist-licence limits and tightening municipal rules. Spanish Property Insight’s H1 2026 report also put foreign demand across Spain down around 13% on its record highs, so the assumption that a let will always find takers no longer holds everywhere.
None of that matters much to the buyer who was never going to let. For many people moving money and family to Spain, the house is a multi-generational base: somewhere the children and grandchildren gather. What they want is the use of it. Priced that way, the honest budget is a pure annual running cost, and once you know that figure the decision gets simpler.
So the objection, “why buy something I can’t even let to cover its costs?”, answers itself. You are not throwing money away. You are buying private use and paying a known price for it, the way you would for anything else you own and enjoy.
What an empty villa still costs you every year
A house on the Costa del Sol costs money every month whether anyone is in it or not. Budget for these, at least:
- IBI, the town hall’s annual property tax, roughly the UK’s council tax. On a €1m to €2m villa it commonly runs into several thousand euros a year, set by the local cadastral value and the municipal rate.
- Community fees (the comunidad de propietarios), if the house is on a gated urbanisation with shared pool, gardens or security. On a prime development these can be substantial.
- Basura, the refuse collection charge, billed separately by the town hall.
- Home insurance, buildings and contents, which is higher for a property left empty for stretches.
- Utility standing charges: electricity and water cost a base amount each month even with the house shut up.
- Pool and garden upkeep, which continues all year. A pool doesn’t pause when you fly home.
- Keyholding or property management, if you want someone local to check the house, deal with the post and let in trades while you’re away.
For a €1m to €2m villa these recurring costs together often land in the low tens of thousands of euros a year before any tax, depending on the plot, the pool, the urbanisation and how much management you want. Treat any single figure as indicative and get it confirmed property by property.
Older stock adds to the sum. Spanish Property Insight puts around 94% of Spanish homes as energy inefficient, and European energy targets are tightening, so an older villa carries heavier running costs now and a likely renovation bill later. Both belong in the budget before you buy.
Do you pay Spanish tax on a home you never rent out?
Yes. This is the cost most buyers miss, and the honest answer is that Spain taxes non-resident owners on an imputed rental value even when the property earns nothing. The home is deemed to produce a notional income simply by being yours, and you declare it through Modelo 210, the non-resident income tax return.
Here is how it works, as at October 2026. The taxable base is a percentage of the cadastral value (the official value on the town hall’s records, usually well below the market price): 1.1% where that value has been revised in recent years, otherwise 2%. The tax rate on that base is 24% for owners resident outside the EU, which includes the UK, and 19% for EU and EEA residents[1].
Say you are a UK resident who buys a villa near Marbella with a cadastral value of €500,000, revised recently enough to use the 1.1% figure. The imputed income is €5,500. At the non-EU rate of 24%, the Spanish tax is about €1,320 for the year, declared on Modelo 210[1]. Change the cadastral value, or fall into the 2% band, and the number moves. The assumptions here are illustrative; your own cadastral value and residence status decide the figure.
If you become Spanish tax resident, this imputed income is reported inside your Spanish income tax return (IRPF) rather than on Modelo 210. Either way, a home you never let still generates a tax bill.
Correct as of October 2026. Tax rules change. How you are taxed depends on your individual circumstances and may change in the future. For your own position, check with an asesor fiscal or a regulated financial adviser.
Where you buy changes the yearly bill
Two identical budgets can produce very different annual bills depending on where and what you buy. By Spanish Property Insight’s figures, buying costs alone vary across Spain’s regions by as much as €65,000 on a €1m purchase, driven mainly by the transfer tax and stamp duty rates each region sets for itself. That is a one-off, but it shows how much location moves the maths.
The annual side varies too. IBI rates are municipal, so two towns a short drive apart can tax the same value differently. At the top end there is wealth tax to consider. Andalusia applies a near-total rebate on its regional wealth tax, so most owners pay none of it. The national solidarity tax on large fortunes still applies to net wealth above €3 million, so a high-value villa held by a non-resident can bring it into view[2]. Treat that as a flag to check with an asesor fiscal, who should run your own numbers.
A home, not a yield
Budget and buy the holiday home as a lifestyle purchase priced on true annual running cost, not on rental yield, and commit knowing the real figure.
If you’re thinking about buying a home on the Costa del Sol, get in touch.
This article is provided solely for informational purposes, reflecting Northern Estate’s interpretation of current legal frameworks and market practices, which are inherently subject to change. It does not purport to offer, nor should it be interpreted as offering, professional investment, financial, or real estate advice. Individuals considering any form of investment or financial planning in relation to luxury real estate should consult with a qualified professional advisor to tailor advice specifically to their circumstances. Northern Estates has endeavored to ensure the accuracy of the information herein; however, we cannot accept liability for any errors or omissions.
Sources
[1] Agencia Tributaria, ‘Impuesto sobre la Renta de no Residentes: rentas obtenidas sin establecimiento permanente’, Agencia Estatal de Administración Tributaria, accessed 24 October 2026. Available at: https://sede.agenciatributaria.gob.es/Sede/en_gb/no-residentes.html
[2] Jefatura del Estado, ‘Ley 38/2022, de 27 de diciembre, para el establecimiento de gravámenes temporales energético y de entidades de crédito y establecimientos financieros de crédito y por la que se crea el Impuesto Temporal de Solidaridad de las Grandes Fortunas’, Boletín Oficial del Estado, 28 December 2022. Available at: https://www.boe.es/eli/es/l/2022/12/27/38