Buying a second home on the Costa Blanca remains one of the most attractive options in 2026 for those looking to enjoy the Mediterranean, have a holiday home, or combine personal use with property investment.
The province of Alicante offers a highly diverse property market: seaside apartments, villas with pools, new-build homes, properties in private residential developments, and houses located in residential areas close to golf courses.
However, buying a second home requires different planning from purchasing a main residence. Taxation, mortgage financing, recurring costs and rental possibilities are some of the aspects that should be analysed before making a decision.
In this guide, we explain the main financial and tax factors you should know when buying a second home on the Costa Blanca in 2026.
The Costa Blanca has established itself as one of Spain’s leading second-home markets, especially among Spanish and European buyers.
Towns and cities such as Alicante, Benidorm, Altea, Calpe, Jávea, Dénia, Moraira, Benissa, Torrevieja and Orihuela Costa offer very different property profiles, making it possible to find homes both for holiday use and investment.
One of the Costa Blanca’s main attractions is its Mediterranean climate, characterised by mild winters and a high number of sunny days throughout the year.
Other factors also help explain the international demand for property:
Alicante-Elche Miguel Hernández Airport is also one of the main gateways for international buyers, with numerous connections to European cities.
All of this makes it possible to use a second home at different times of the year, not only during the summer months.
The Costa Blanca property market continues to see strong demand, especially in coastal areas where the supply of well-located properties is limited.
Homes with sea views, terraces, swimming pools, energy efficiency, parking and proximity to services tend to attract a large share of demand.
However, price trends vary considerably between municipalities, neighbourhoods and property types. For this reason, before buying for investment purposes, it is advisable to analyse the specific local market and avoid basing the decision solely on general price trends.
The taxes payable by the buyer depend mainly on whether the property is a resale home or a new-build property purchased directly from the developer.
In addition, certain tax benefits linked to a main residence may not apply when the property is purchased as a second home.
When buying a resale property in the Valencian Community, the transaction is generally subject to Property Transfer Tax (ITP).
Since 1 June 2026, the general rate applicable in the Valencian Community is 9% for property acquisitions, unless a specific or reduced rate applies.
When the value of the transferred property exceeds €1,000,000, the applicable rate is 11%.
For example, for a resale property purchased for €400,000, assuming a taxable base of the same amount and that no reduction applies:
€400,000 × 9% = €36,000 in ITP.
It is important to calculate the relevant taxable base in advance and check whether the property has an official reference value, as the price stated in the deed will not necessarily be the only reference used to determine taxation.
When a new-build property is purchased directly from the developer, the transaction is normally subject to VAT rather than ITP.
The standard VAT rate currently applicable to the first transfer of residential property is 10%.
Therefore, for a new-build property costing €400,000:
€400,000 × 10% = €40,000 in VAT.
In addition, the deed may be subject to Stamp Duty (AJD).
Since 1 June 2026, the general AJD rate in the Valencian Community for cases not specifically regulated is 1.4%.
As a result, the initial tax burden on a new-build property can be significant and should be included in the budget before formalising a reservation or purchase contract.
After buying a second home, there are costs that should be included in the annual budget.
IBI is a municipal tax and its amount depends, among other factors, on the cadastral value and the rate set by each local council.
Therefore, two properties with a similar purchase price but located in different municipalities may have different annual costs.
It is possible to finance the purchase of a second home with a mortgage, although lenders usually apply more conservative criteria than for financing a main residence.
The bank will assess factors such as the buyer’s income, employment stability, assets, existing debt, age, tax residence and the characteristics of the property.
For a second home, the maximum loan-to-value ratio is usually lower than what may be offered for a main residence.
Depending on the buyer’s financial profile and the lender, financing may be approximately 60–70% of the value considered by the bank, although the specific conditions can vary significantly.
This means that the buyer will need sufficient funds to cover:
For example, if a lender financed 70% of a €400,000 property, the mortgage would be approximately €280,000 and the buyer would need to contribute the remaining €120,000, in addition to taxes and other costs.
Foreign buyers who are not tax residents in Spain can also apply for mortgage financing.
In these cases, lenders usually carry out a specific risk assessment and may require a higher contribution of the buyer’s own funds.
It will normally be necessary to provide documents such as:
Depending on the country of residence, foreign documents may require translation or additional documentation.
For international buyers, it is particularly advisable to assess financing before signing purchase commitments that may involve penalties.
In addition to taxes, there are other costs associated with a property transaction.
Notary. Execution of the public deed of sale.
Land Registry. Registration of the new ownership.
Administrative services. If a gestoría is used to handle certain administrative and tax matters.
Lawyer. Particularly advisable for more complex transactions or when the buyer lives outside Spain.
Valuation. Normally required when mortgage financing is involved.
Before buying, it is advisable to request a full calculation of the transaction in order to understand the total acquisition cost, rather than limiting the budget to the advertised property price alone.
Yes. A second home can generate income when it is not being used by the owner.
However, it is essential to distinguish between conventional residential letting and tourist or holiday rentals.
Tourist rental activity is subject to specific regulations and may require authorisations, registrations, planning compatibility and compliance with additional requirements.
Therefore, if the purchase is intended to include holiday rentals, it is advisable to check before buying whether that use is legally permitted for the specific property.
The bylaws and resolutions of the community of owners should also be reviewed where applicable.
Owners who are tax residents in Spain must declare rental income in their Personal Income Tax (IRPF) return.
Tax treatment will depend on the type of rental, and certain expenses may be tax-deductible when the requirements established by law are met.
The tax treatment of a rental used as the tenant’s main residence is not necessarily the same as that of a tourist rental.
For this reason, investment returns should always be calculated after taking taxes into account.
Owners who are not tax residents in Spain are also subject to taxation on income from properties located in Spain.
Form 210 is used, among other cases, to declare income from property rentals and certain property-related income of non-resident taxpayers.
In addition, a non-resident individual who keeps a property in Spain for personal use or leaves it vacant may be subject to imputed property income, which is also declared using Form 210.
The specific tax treatment and the possibility of deducting certain expenses depend, among other factors, on the owner’s country of tax residence and the applicable regulations.
A second home can serve a dual purpose: enjoying the property during certain times of the year and earning rental income during the rest.
However, there is no standard return applicable across the whole Costa Blanca.
Returns will depend on variables such as:
A more expensive property may even offer a lower percentage return while providing better prospects for preserving value or appreciating over the long term.
Tourist demand is particularly concentrated in established coastal municipalities and areas.
Benidorm, due to its high level of tourist activity throughout much of the year.
Altea, particularly attractive to buyers looking for upper-mid-range and high-end properties.
Calpe, with a strong international second-home market.
Moraira and Benissa Costa, markets characterised by villas and higher-value properties.
Jávea, with a mix of apartments, villas and premium properties.
Dénia, with an established residential and holiday-home market.
Torrevieja and Orihuela Costa, with a significant presence of international buyers and a wide range of residential properties.
However, high tourist demand does not automatically mean that any property can legally be used for holiday rentals. The specific situation must be checked before buying.
One of the most common mistakes when evaluating a property investment is to consider only the gross return.
Gross return = annual rental income ÷ purchase price × 100.
For example, if a property purchased for €300,000 generates €18,000 per year:
€18,000 ÷ €300,000 × 100 = 6% gross return.
However, this figure does not reflect the actual return.
To calculate the net return, costs such as community fees, IBI, insurance, maintenance, repairs, rental management, vacant periods and taxes must be taken into account.
Therefore, comparing properties solely on the basis of gross return can provide an incomplete picture of the investment.
Before purchasing a second home, it is advisable to follow a structured approach.
First, define the purpose of the purchase: personal use, investment or a combination of both.
Next, set a budget that includes not only the property price but also taxes and associated costs.
If you need financing, assess your available mortgage capacity in advance.
Before signing the purchase agreement, check the property’s Land Registry, planning and legal status, any possible encumbrances, community debts and the relevant documentation.
If you intend to rent it out as tourist accommodation, check the applicable regulations and the specific feasibility of that use in advance.
Finally, analyse the annual maintenance costs. A villa with a pool and garden may offer greater privacy and holiday appeal, but it will normally also have higher expenses than an apartment within a community.
The right property will be the one that strikes a balance between location, price, costs, possible uses and long-term objectives.
If you buy a resale property, you will normally pay ITP. Since 1 June 2026, the general rate in the Valencian Community is 9%, while properties valued at more than one million euros are taxed at 11%, unless another specific rate applies. For a new-build property, 10% VAT generally applies and AJD may also be payable.
It will depend on the price and the financing obtained. You need sufficient funds to cover the portion of the price not financed by the bank, plus purchase taxes and costs.
Yes. Spanish banks grant mortgages to non-residents, although they normally apply specific financing and risk criteria.
A foreign buyer will need Spanish tax identification in order to formalise and properly manage the transaction and the related tax obligations.
Yes, provided the relevant regulations are complied with. If you want to use it for tourist rentals, it is especially important to check the regional and municipal regulations in advance, as well as any restrictions that may affect the property.
Yes. In addition to IBI and other possible local costs or taxes, a second home can generate tax obligations even when it remains available for the owner’s own use. In the case of non-resident individuals, there may be imputed property income that must be declared using Form 210.
It depends on your priorities. New-build properties usually offer better energy-efficiency standards, modern installations and less need for initial renovation. Resale properties may offer established locations and different pricing, but their condition and potential renovation costs should be carefully assessed.
It can be, but profitability depends on location, purchase price, costs, taxation, rental demand and the legal possibilities for letting the property. The decision should be based on the specific figures for each property rather than on general market averages alone.
Buying a second home on the Costa Blanca can be both a lifestyle decision and a long-term property investment. The key is to choose the right location and property, understand all costs before buying, and carry out an appropriate legal and tax review of the transaction.
Good planning makes it possible to enjoy the property for years and, when appropriate, also take advantage of its rental and appreciation potential.
Finding the right property is only part of the process. Location, budget, purchase costs, financing and rental potential are factors that should be analysed before making a decision.
At ESPHOUSES, we support you throughout the entire process of buying your second home on the Costa Blanca, from searching for and selecting properties to completing the purchase.
Our team has in-depth knowledge of the Costa Blanca property market and can help you find a home that suits your needs, whether you are looking for a property to enjoy during your holidays or want to combine a second home with property investment.
Contact ESPHOUSES and tell us what type of property you are looking for. We will help you find your second home on the Costa Blanca.
