Why is investing in the Costa Blanca and Costa Cálida a smart decision?

Investing in the Costa Blanca and Costa Cálida. More and more Dutch and Belgian citizens are considering investing in a vacation home in Spain. The Costa Blanca and Costa Cálida, in particular, are attracting an increasing number of Dutch and Belgian investors looking for a sustainable investment and a second home in the sun. What exactly makes these two regions so attractive? What should you keep in mind if you’re thinking of investing here? In this article, we’ll highlight the key benefits and considerations. We’ll discuss the favorable climate, property value appreciation, rental potential, local amenities, projects offering immediate returns, tax benefits, and provide clear advice at the end.

The Costa Blanca and Costa Cálida enjoy sunny winters and warm summers. The area around Torrevieja is even known for its exceptionally healthy microclimate; the World Health Organization has recognized it as one of the healthiest places in the world. This pleasant weather attracts tourists, winter visitors, and “digital nomads.” This creates high demand for vacation rentals.

Real estate prices on the Costa Blanca and Costa Cálida have risen significantly in recent years. New construction projects often increase in value even while they’re still under construction, sometimes by 10 to 30% before they’re completed. However, prices are still lower than in areas such as the Costa del Sol. This means there is room for further appreciation, especially on the Costa Cálida, which is still undergoing rapid development. Getting in early on new developments can therefore yield additional returns.

Renting is often crucial to your property’s return on investment. On the Costa Blanca and Costa Cálida, there is high demand for rental properties year-round. Thanks to the long season (from spring well into winter), occupancy rates are high. Popular destinations include Guardamar, Orihuela Costa, and Los Alcázares. Rental regulations vary by region, but in general, there are good opportunities:

• Vacation Rentals: Tourists and winter residents enjoy renting apartments in this region. In Murcia (Costa Cálida), you can usually obtain a tourist rental permit quickly. In Valencia (Costa Blanca), the rules are slightly stricter, but some new construction projects have permits that were applied for specifically for the building itself. This ensures the owner future rental opportunities.
• Long-term rentals: A growing number of expats and digital nomads are settling in southern Spain. This is driving steady and increasing demand for annual rentals. Gross returns of between 5% and 6% are very realistic here.

Please keep in mind that not every property is automatically suitable for rental. It’s best to choose a project that has a rental permit and, if possible, an associated rental management service, so that everything is taken care of for you.

These regions offer everything tourists are looking for. You’ll find kilometers of sandy beaches and plenty of water sports opportunities (sailing, diving, windsurfing). Golfers can enjoy many beautiful golf courses, and the inland areas feature extensive hiking trails and nature parks. There are also bustling seaside resorts such as Guardamar, Orihuela Costa, and Los Alcázares, with lively promenades and local markets. In addition, there are modern shopping centers, healthcare facilities, and excellent connections to international airports such as Alicante and Murcia. This not only ensures a pleasant stay but also increases the rental potential and resale value of your home.

Select Vakantievastgoed and our local partner Adaleta have selected a number of new-construction projects focused on returns and hassle-free management:

• Oasis Laguna (Guardamar): Modern apartment complex with a tourist license attached to the building itself. Fully furnished, including rental management.
• Santa Rosalía Life & Lake Resort: A luxury resort featuring the largest man-made lagoon in Europe. Each apartment complex has its own swimming pool and amenities for residents. Designed for both short-term and annual rentals. Due to the high-quality finishes, the property’s value is expected to rise significantly.
• Serena Golf (Los Alcázares): A spacious new-construction complex located near the golf course and offering ocean views. Ideal for golf enthusiasts and beachgoers. The combination of location and quality makes appreciation in value likely.
• San Miguel de las Salinas: An up-and-coming location with relatively low prices. Demand for long-term rentals is growing rapidly here. This project offers affordable entry-level opportunities with the prospect of stable rental income and significant appreciation.
• Belich Apartments (Los Alcázares): A small-scale project within walking distance of the coast. Already rented out and licensed for tourist accommodation. Contemporary design, a fully managed property, and immediate rental income make this an attractive investment.

Every project in our portfolio has been selected based on a combination of construction quality, potential return on investment, and an attractive purchase price. Thanks to professional on-site rental management, you are assured of a stable return with minimal effort.

The tax rules for foreign investors in Spain are relatively favorable:

• Spain: As a non-resident, you pay 19% income tax on the net profit from rental income. (Under EU rules, you can deduct many expenses from your gross rental income, such as maintenance costs, mortgage interest, and VAT.) This 19% IRNR tax rate is attractive compared to the Dutch Box 3 tax.
• The Netherlands: In the Netherlands, your Spanish vacation home is proportionally exempt under Box 3. This means you pay little or no capital gains tax on the value of your foreign home. As a result, you are not subject to double taxation.
• Fixed expenses: Municipal taxes, homeowners’ association fees, and utility costs are generally lower in Spain than in the Netherlands. The running costs of your vacation home are therefore quite reasonable: about 5,000 euros per year is often enough to cover everything. Furthermore, these costs can be deducted from your taxable profit before the 19% income tax is levied.

This simply means that you’ll have more net income from the rental proceeds. You’ll pay relatively less tax in both Spain and the Netherlands than you would on a comparable investment in the Netherlands itself.

Investing on the Spanish coast offers not only financial benefits but also personal enjoyment. You can use the home yourself during the quieter months and enjoy some free winter sunshine. During the high season, the home can be rented out to generate additional returns.

It’s important that you receive thorough guidance throughout the purchase process and property management—from legal due diligence to rental management after closing. That’s why we work with local experts and trusted partners. This way, you can enjoy both the return on your investment and the pleasant climate without any worries.

Would you like to learn more about investing in a vacation home in Spain on the Costa Blanca or Costa Cálida? Please contact Select Vacation Real Estate. Call us at +31 (0)85 060 8575 or visit www.selectvakantievastgoed.nl. We’d be happy to advise you on the best strategy and the right project for your situation.