Note
How to calculate rental yield in Spain
Quick answer
Gross yield is yearly rent divided by the price. Net yield uses the rent you keep after costs, vacancy and tax, divided by the total cost of buying. Use real quotes for each input, include the taxes on purchase, and test a worse year before you rely on the result.
Applies toBuyers who want to work out a yield for a specific Spanish home.
On this page: 9 sections
§ 1Two numbers
The gross yield is the yearly rent divided by the purchase price. The net yield is the yearly rent actually kept, after costs, vacancy and tax, divided by the total cost of buying. The first is a filter, and the second is the measure. This page belongs to the chapter in rental yields explained.
§ 2The worksheet
Write the following in a table. First, the price. Second, the costs of buying: the taxes, the notary and registry, the lawyer and any works. Their sum is the total cost. Third, the yearly rent at a cautious level. Fourth, the number of months the home will be empty. Fifth, the yearly costs: local property tax, community fees, insurance, repairs and agent fees. Sixth, the income tax on the rent. The net income is the rent received, minus the yearly costs, minus the tax. Divide it by the total cost.
§ 3The inputs
Take the purchase taxes from the costs section, which gives the rates by region. Take the rent from agreed leases, not adverts. Take community fees from the accounts, and local property tax from the bill. Where you do not know, use a cautious figure and say so. More on yields by city explains how to gather local figures.
§ 4Vacancy and repairs
Assume empty months, even for a good home, and a repair budget. A home that is let all year with no repairs is a rare case. Test a bad year with extra empty months and a large repair.
§ 5Tax
Include the tax on the rent. For a non-resident the base is, for most, the gross rent without deduction of expenses, so the tax does not fall when your costs rise. Net yield after tax explained explains the effect. Tax on a later sale is outside the yearly figure but belongs in the total return.
§ 6Financing
If you borrow, compute the return on the money you put in, after interest, and check that the rent covers the instalment in a bad year. The mortgages section explains the costs and the risks.
§ 7Check the result
Compare the net figure with what you could earn on a safer use of the money, and with the risks listed in the investment section. A small gap is a warning.
§ 8Keep records
Keep the worksheet and update it each year with real figures. It will show whether your assumptions were right.
§ 9Common errors
Using the asking price instead of the price paid, forgetting taxes and fees, taking the best month for the rent, and ignoring community fees. Another error is to include mortgage interest in the property’s yield and then compare with a cash buyer. Keep the property’s yield and the return on your money separate.
FAQRelated questions
How do I work out a gross yield?
Divide the full year’s rent by the price you pay, and express it as a percentage. It ignores costs and empty months, so it is only a first filter and can look much better than what you actually keep.
What goes into the net yield?
Rent actually received after empty months, minus community fees, local tax, insurance, repairs, agent fees and income tax, divided by the price plus purchase costs. Mortgage interest is a financing cost, shown separately.
Should I include the mortgage?
Show the yield on the property first, without the loan. Then show the return on your own money with the loan, so that you see the effect of borrowing and its risk. The mortgages section explains the costs of the loan.
Sources
- Agencia Tributaria: Rental income of non-residents: specific questions on property (official source, opens in a new window), Rates, gross base, deductible expenses, imputed income for unlet monthsLast checked 17 October 2026
General information only. This is not legal, tax or financial advice. Check your own situation with a qualified adviser.