As we step into the summer of 2025, property activity in the Granada and Costa Tropical region is heating up. In this month’s update, we explore the surge in demand in the mid-market range, the proposed 100% purchase tax increase for non-EU buyers, and the potential implementation of a 21% VAT on short-term holiday rentals. Let’s break down what these developments mean for buyers and sellers alike.
Mid-Market Demand Heats Up
There’s been a substantial spike in demand for properties priced between €350,000 and €750,000. Hola Properties has seen an influx of enquiries in this range, driven by international factors such as economic uncertainty and currency fluctuations. Buyers from the U.S., Eastern Europe (notably Romania), and the UK are leading the charge. Despite the dollar being weaker against the euro, Americans are acting decisively to secure property in Spain.
At the same time, UK interest has climbed as the pound strengthens, encouraging British buyers to move quickly amid improving stability. However, the supply of suitable homes in this price bracket isn’t keeping up, making it an ideal time for owners in this range to consider selling.
100% Purchase Tax Proposal for Non-EU Buyers
One of the most talked-about issues in recent weeks is the proposed doubling of the property purchase tax (ITP) for non-EU buyers not relocating permanently to Spain. While this has triggered concern and even panic among potential buyers, it’s essential to understand the context.
This is currently just a proposal in Parliament and appears unlikely to pass. Spanish Prime Minister Pedro Sánchez does not hold a parliamentary majority, and all opposition parties have indicated they won’t support the measure. Furthermore, this change would only apply to a small portion of the market—about 7%—who are non-EU, non-resident buyers.
Exemptions exist for buyers who are moving to Spain full-time, and some Andalusian regions already offer reduced tax rates for properties intended as a permanent residence. You can watch our full video analysis on this topic here:
21% VAT on Short-Term Rentals
Another policy proposal gaining traction is the introduction of a 21% VAT on short-term holiday rentals. This move aims to cool the saturated tourist accommodation market and encourage more long-term rental options for locals. In areas such as Málaga, Granada, and Barcelona, authorities have already begun revoking tourist licences and tightening regulations.
While this sounds like a meaningful shift, it may not have the desired effect. Many landlords are reluctant to rent long-term due to the risk of squatters (*ocupas*), which has become a pressing concern in Spain. Landlords fear long eviction processes and financial losses, meaning that many will choose to sell instead.
So far, no clear strategy has been proposed to make abandoned or underused properties rentable. Local councils could play a stronger role by offering support to revitalise these homes. You can learn more about the impact of rental policy changes in our upcoming video.
What Does This Mean for You?
If you’re a seller with a mid-market property, this is a golden moment. The demand is high, stock is low, and serious buyers are ready. Proper preparation—especially professional video marketing—can help your property stand out and achieve a faster sale at a better price.
If you’re a buyer, don’t let the headlines spook you. The market remains vibrant, and well-advised buyers are finding great opportunities despite the proposed changes.
At Hola Properties, we’re committed to keeping you informed with accurate insights, not scare tactics.
Want to know more about how these developments affect your property plans?
Get in touch for a friendly, no-obligation chat at https://www.holaproperties.com.
You can also explore more updates and video insights on our YouTube channel: https://www.youtube.com/@holaproperties
