The Costa del Sol has seen strong growth over the past few years, but recent data highlights just how significant the role of international buyers has become.
Since 2019, tax revenue in Málaga linked to non-resident property owners has almost tripled, driven largely by real estate investment and rental income.
These figures tell a much bigger story about how the property market across Marbella, San Pedro and the wider Costa del Sol is rapidly growing, and why international demand continues to shape it.
A sharp rise in tax revenue from foreign owners
Between 2019 and 2025, revenue from non-resident income tax in Málaga province increased by around 194%, rising from approximately €93 million to €275 million.
This type of tax applies to individuals who own property in Spain but do not live there permanently – regardless of whether the property is rented out or held for personal use.
While this figure is still smaller than major taxes like income tax or VAT, it is one of the fastest-growing sources of revenue in the region – and a clear indicator of increasing foreign ownership and activity in the property market.
Why has the growth been so strong?
The increase in tax revenue is not happening in isolation. It reflects several overlapping trends that have been shaping the Costa del Sol over the past few years.
Continued growth among foreign property buyers
Málaga is one of the most international property markets in Spain. Today, over 40% of home purchases in the province are made by foreign buyers, compared to around 20% nationally.
A large proportion of these buyers are non-residents, meaning they use their property as a second home or investment rather than a primary residence. As the number of foreign owners increases, so too does the amount of taxable income generated.
Strong rental demand across the Costa del Sol
Rental demand has remained consistently high since the era of covid, driven by tourism, seasonal residents and a growing number of digital nomads choosing to spend extended periods in southern Spain.
This has led to:
- Higher occupancy rates
- Increased use of short-term and mid-term rentals
- Greater overall rental activity
For many buyers, rental income is part of the investment strategy, which directly contributes to the rise in non-resident tax revenue.
Rising rental prices
Málaga is one of the provinces in Spain where rental prices have increased the most in recent years. As rents rise, so does the taxable income generated from those properties.
In simple terms, rising rents lead to greater declared income and increased tax contributions.
Greater tax oversight and transparency
Another key factor is the improved enforcement from the Spanish authorities. There are now better tools to monitor rental income, particularly with increased data sharing between countries and stricter regulation around tourist rentals. This has made it more difficult for undeclared income to go unnoticed.
As a result, more rental income is being properly declared and taxed than in previous years.
What this tells us about the Marbella property market
For anyone looking at property in Marbella or the wider Costa del Sol, these figures reinforce a few important points that need to be considered.
Firstly, international demand is not slowing down. If anything, it is becoming more embedded in the structure of the market. Foreign buyers are driving a significant share of activity.
Secondly, the rental market remains strong. High demand and rising prices continue to make property ownership attractive, particularly for those looking to generate income alongside lifestyle use.
Finally, the market is becoming more mature. With greater regulation and transparency, there is a clearer framework for both buyers and investors to operate within.
What international buyers should keep in mind
This trend also highlights the importance of understanding tax obligations from the outset, especially for non-resident buyers.
Owning property in Spain comes with responsibilities, regardless of whether the property is rented out. Any income from rental activity must be declared, and if it’s not rented out, you’ll need to pay tax on the ‘imputed income’.
Working with the right advisors can help avoid complications later on and ensure everything is handled correctly from the start.
Thinking of buying property on the Costa del Sol?
If you’re considering purchasing property in Marbella, San Pedro or the surrounding areas, understanding the market and the financial implications is key.
Our team at Winkworth Spain can guide you through the process with clear, practical advice tailored to international buyers.
Get in touch to explore our property portfolio and take the next step with confidence.