Rental yields on the Costa del Sol, town by town: long lets, holiday lets and the tax

Gross rental yields on the Costa del Sol, town by town, as they stand in October 2026. This guide works out the yield for fourteen towns from Manilva to Nerja from the asking rents and asking prices that the property portal idealista published for September 2026, and shows the sum for each. It then sets out what a gross figure leaves out, how a long let and a holiday let differ, the tenancy rules Spain changed by decree in October 2026, and the tax on the rent for a resident and for a non-resident. None of it is a forecast or a promised return. The figures describe what landlords and sellers were asking in one month, and the return on any particular home depends on that home.

How the figure is worked out

A gross yield is a year’s rent as a share of the price. Idealista publishes two monthly reports for every main town on this coast: the asking rent per square metre a month and the asking price per square metre. Taking both from the same month keeps the comparison fair. The sum is:

gross yield = monthly rent per m² × 12 ÷ asking price per m²

For Mijas in September 2026, that is €17.10 × 12 = €205.20 of rent a year for each square metre, and €205.20 ÷ €3,717 = 5.5%.

Two points about the source matter. Idealista’s published methodology says its index measures the asking price on active listings, not the price a home sold for or the rent a tenant actually pays. And since July 2026 the rental index filters out seasonal and holiday lets, so that it measures the ordinary residential market. A yield worked from these figures is a long-let yield on asking prices.

Gross yields in September 2026

Idealista rental and sale price reports, September 2026. Idealista reports Torre del Mar separately from the rest of Vélez-Málaga.

Three things stand out. The spread is narrow, from 4.5% to 6.1%. Rents rise with prices, but not as fast, which is why Marbella has the highest asking rent on the coast at €23.60 a square metre a month and one of the lower yields. And the four highest yields, in Vélez-Málaga, Mijas, Manilva and Torremolinos, are all in towns priced below the provincial average of €4,317, with Mijas the highest of the main resort towns. A low price is not enough on its own: Nerja and Rincón de la Victoria are below that average too, with yields of 4.6%.

These are one month’s figures, and the smaller towns move most. Nerja’s asking rent rose 5.8% between August and September alone, and Benahavís’s fell 2.5%. The sale prices differ a little from the 2026 averages on the area pages too, and in Estepona, where asking prices rose 17.1% in a year, by more. Read the table as a picture of September, not a fixed ranking.

What the gross figure leaves out

The gross figure is the rent against the asking price and nothing else. Here it is worked on an 80 m² apartment at the September town averages in Mijas and Marbella.

The buying costs are the first thing the gross figure leaves out. On a resale I tell buyers to budget 10 to 11% on top of the price, the 7% transfer tax plus the notary, the registry and the lawyer. A new build carries 10% VAT and 1.2% stamp duty instead, so 12 to 14% in all. Both are worked line by line in what a Costa del Sol purchase really costs.

Then the running costs come out of the rent: the IBI property tax, the community fees, insurance, repairs, replacing what wears out, and a letting agent if you use one. Each depends on the building and the town, and the sum for a typical home is set out in what it costs to own a home in Spain each year. After that come the weeks between one tenant and the next, the gap between an asking rent and the rent agreed, and the tax on what is left, which has its own section below.

Long lets

A long let is a tenancy under the national tenancy law, the Ley de Arrendamientos Urbanos. A let to a tenant as their permanent home runs for whatever term is agreed, but if that is less than five years, or seven when the landlord is a company, article 9 extends it year by year to that minimum unless the tenant gives at least 30 days’ notice. It suits an owner who wants a steady income from the same tenant for years and does not need the home for their own holidays.

The rules around it changed twice by decree in the weeks before this guide was written, and they may change again.

• Temporary lets. Real Decreto-ley 29/2026, in force since 8 October 2026, requires a let for a limited period to rest on a real, provable reason for the tenant to be away from their usual home. It must run for more than 31 days and, as a rule, no more than twelve months. A longer term without a reason, or more than two successive contracts between the same parties for the same home, turns it into a permanent let from the first contract. The same decree limits rent increases on existing lets until the end of 2027.
• Renewals. Real Decreto-ley 28/2026, due to take effect on 15 November 2026, renews a long let automatically for further five-year periods once the minimum term ends, seven for a company landlord. A landlord who ends it must give six months’ notice and compensate the tenant, unless an exception applies, such as the landlord needing the home to live in or for close family.
• Congress. A royal decree-law has to be confirmed by a vote in Congress. Congress repealed the September version, Real Decreto-ley 26/2026, on 2 October 2026. When this guide was checked, the official gazette recorded no vote yet on either October decree.

The practical point is to check the rules in force on the day a tenancy is signed, because they set how long the tenant can stay and how far the rent can rise.

A tenant who stops paying is not a squatter in law. Recovering the home is a civil eviction for non-payment, and the guide to Spain’s squatting law explains the difference.

Holiday lets

A holiday let sits outside the tenancy law and under Andalucía’s tourism rules. Under those rules, set out in the tourist licence guide, the home has to be registered with the regional government and the town’s planning rules have to allow tourist use at that address, and several towns now limit new registrations. Since 3 April 2025 the community of owners also has to have approved it, by three fifths of the owners holding three fifths of the shares, under article 17.12 of the law on communities of owners.

There is no yield for holiday lets in the same series, because idealista leaves them out. The income is the nights let times the nightly rate, and both move with the season. Against it go the costs a long let does not carry: cleaning and linen between guests, a manager to hand over keys and answer the phone, the platform’s commission, the utilities, and the furniture and equipment the rules require. Anyone quoting a holiday-let yield should be able to show the nights and the costs behind it.

One change is due on 1 December 2026. Under Real Decreto-ley 29/2026, a furnished home let to the same guest for 30 nights or fewer loses the VAT exemption that applies to rents, unless it is the landlord’s own home, and is charged VAT at 10%, the rate hotels charge. Like the rest of the decree, it stands or falls with the vote in Congress.

The tax on the rent

If you are tax resident in Spain, rent is income from property in your annual return, as the Spanish tax agency sets out. You deduct the costs of the let: the interest on a loan used to buy or improve the home, repairs and upkeep, the IBI and the rubbish charge, insurance and depreciation. The interest and the repairs together cannot exceed the rent from that home, and any excess carries forward four years. The net rent then goes into the general scale described in income tax in Spain in 2026.

A long let earns a reduction on that net rent. For a contract signed since 26 May 2023 it is 50% in general, higher in a few narrow cases, and for a contract signed before that date it is 60%, according to the tax agency’s 2025 manual. Holiday lets and seasonal lets get no reduction. For contracts signed from 1 December 2026, Real Decreto-ley 29/2026 replaces the 50% with a scale from 15% to 100% that turns mainly on the rent charged against the previous rent or the official reference index, if Congress confirms it. Whether you are resident at all is set out in tax residency in Spain.

If you live elsewhere, you pay non-resident income tax on the rent. A resident of the United Kingdom, the United States or anywhere else outside the EU, Norway and Iceland pays 24% on the gross rent, with no costs deducted. A resident of another EU country, Norway or Iceland deducts the costs of the let and pays 19% on the rest. On the Mijas example, a full year let to a tenant at €16,416 means €3,940 of tax for a United Kingdom resident. The return is Modelo 210. How it is filed, and what is due for the weeks the home stands empty, are set out in Modelo 210 for non-resident owners.

Where the figures point

The higher gross yields on this coast are in towns priced below the provincial average. Most of the new builds on file that start under €300,000 are in Mijas and Fuengirola, with others in Manilva and the towns east of Málaga. The list is in new developments under €300,000, and the schemes are grouped town by town in Mijas and La Cala, Casares and Manilva and Málaga and the east coast. A new build starts from a higher cost base because of the VAT and stamp duty, so its yield on what you paid is lower than the same rent on a resale.

A yield is one way to read a home, not the only one. A town where rents are high against prices is not a better place to own for that reason alone, and none of these figures is a return anyone can promise.

How I handle it

For a buyer who intends to let, I work the sum on the actual home rather than the town average. That means the asking rents for comparable homes in the same building and street, the community’s rules and any tourist registration already in place, the running costs from the community accounts and the last IBI receipt, and the tax at the rate that applies to you, checked with your adviser. You see the figure net of all of that before an offer is made.

My approach is the same at every price point: proper research on the property and its area, a straight assessment of what it is genuinely worth, and careful negotiation on your behalf. Where a home works better as a home than as a let, I say so. If you would like to talk through a town or a particular property, book a call. Buying with me sets out how I work.

Figures checked on 24 October 2026 against idealista’s September 2026 reports and the official texts linked above. Asking prices and asking rents are not agreed prices and rents, and the tenancy and VAT changes of October 2026 depend on the vote in Congress. General guidance, not tax or legal advice.

Common questions