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Second home as a non-resident: what banks assess

Buying a second home in Spain is the most common reason among non-resident buyers. The sunshine, quality of life and competitive prices attract thousands of Europeans every year. But banks analyse this type of transaction with its own nuances.

Fernando HierroBy Fernando Hierro|
Guide6 min read
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How the bank approaches a second home

For the bank, a non-resident's second home is a moderate-risk transaction. It is not the primary residence (if there are financial problems, it is the first thing to stop paying), but the typical buyer tends to have a solid financial profile.

Typical conditions for a non-resident second home: 60-70% financing, 20-25 year term, and interest rate 0.3 to 0.5 points above the standard for residents.

The good news: if you can demonstrate that the property has holiday rental potential (Airbnb, Booking), some banks view this positively as potential supplementary income, although they do not count it directly.

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Taxes specific to second homes

As a non-resident owner of a second home in Spain, you will face several recurring taxes, whether you use the property or not:

The IRNR (Non-Resident Income Tax) applies even if you do not rent out the property. In that case, you are taxed on an "imputed income" of 1.1-2% of the cadastral value. If you rent it, you are taxed on net income.

On top of this, there is the municipal IBI property tax and, if applicable, community fees. Budget between 1,000 and 3,000 EUR per year in recurring costs depending on the location and size of the property.

See the full guide on taxes and purchase costs for a detailed breakdown.

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Can I rent the property when I am not there?

Yes, but with important caveats. Holiday rentals in Spain are regulated at the regional level, and rules vary significantly between communities.

In the Balearic Islands and Barcelona, restrictions are strict and you need a tourist licence. On the Costa del Sol or Costa Blanca, the process is smoother but still requires registration.

From a mortgage perspective, the bank does not usually place restrictions on renting. However, bear in mind that rental income is taxed in Spain through the IRNR, and you will need to file quarterly returns.

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Frequently asked questions

Is it easier to get a mortgage for a second home than for an investment?

Generally yes. The bank perceives a second home as a more stable use: the owner has an emotional connection to the property and is less likely to default. For investment purchases, the analysis tends to be somewhat more conservative.

Can I deduct the mortgage costs in my country?

It depends on the double taxation agreement between Spain and your country. Generally, mortgage interest on a foreign second home is NOT deductible in most European countries. Consult a tax adviser in your country.

Do I need specific insurance for a second home?

The bank will require home insurance as a condition of the mortgage. Additionally, insurance covering periods of vacancy, water damage and public liability is highly recommended, especially if the property is empty for several months each year.

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Fernando Hierro
Fernando Hierro

Editor de contenidos hipotecarios

Publicación: marzo 2026

Última actualización: marzo 2026

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