This is the comparison almost every buyer in southern Europe ends up making, and it is usually framed as sun versus sun. It is not. On the numbers these two countries have drifted a long way apart, and the gap widened again in 2026 when Portugal introduced a flat transfer tax aimed squarely at people who buy without moving.
Both countries are open to foreign ownership without restriction, both need only a tax number to get started, and both complete a straightforward purchase in six to twelve weeks. Everything that follows is about what happens to your money once you own the place.
Side by side
| Figure | Spain | Portugal | Source and date checked |
|---|---|---|---|
| Price per m2, capital | EUR 5,900 | EUR 6,100 | Spain: idealista price index, Madrid city (Jan 2026: EUR 5,861/m2, record high; ~EUR 5,984 by May 2026) | Portugal: idealista price index (Lisbon city, median asking, May 2026)(2026-07) |
| Price per m2, rural | EUR 1,450 | EUR 900 | Spain: idealista: rural municipalities averaged EUR 1,459/m2 at end-2025 (urban areas EUR 2,906/m2) | Portugal: idealista/INE municipality map: 139 interior municipalities under EUR 1,000/m2, several under EUR 700/m2(2026-07) |
| 5-year price trend | +50% | +70% | Spain: INE house price index (2015=100): ~128 in Q1 2021 to ~192 in Q1 2026 (+12.8% y/y in Q1 2026 per Eurostat) | Portugal: INE house price index, cumulative 2021-2025 (approx. +9.4%, +12.6%, +8.2%, +9.1%, +17.6% per year)(2026-07) |
| Total buying costs | 8 to 13% | 3 to 11% | Sum of the transfer tax, notary, registration and legal ranges in each country record(2026-09) |
| Transfer tax | 6 to 10% | 0.8 to 8.8% | Spain: ITP on resales, set per region: 6% Madrid, 7% Andalusia, up to 10% Cantabria/Galicia (Catalonia progressive to 11%, Balearics top bracket 13%, Basque Country 4%); new builds pay 10% VAT + 0.5-1.5% AJD instead | Portugal: IMT 0-8% progressive (residents) plus 0.8% stamp duty; non-residents pay a flat 7.5% IMT from 1 Sep 2026 (Decreto-Lei n.º 97/2026, de 20 de maio), refundable if they become tax resident within 2 years(2026-07) |
| Rental income tax | 19% | 25% | Spain: IRNR: 19% on net rental income for EU/EEA residents (expenses deductible); 24% on gross rent for non-EU/EEA residents | Portugal: Flat IRS rate on residential rental income (28% for non-residential lets; lower rates for long-term contracts)(2026-07) |
| Capital gains tax | 19% | 24% | Spain: IRNR flat 19% on real-estate capital gains for all non-residents; the buyer must withhold 3% of the price on account (Modelo 211) | Portugal: Since 2023 non-residents are taxed on 50% of the gain at progressive rates of 12.5-48%; 24 = maximum effective rate, most sellers pay an effective 6-24%(2026-07) |
| Wealth tax, non-resident | Yes | Yes | Spain: Costaluz Lawyers, Spanish wealth tax for non-residents 2026 | Portugal: Portutax / AIMI regime (CIMI)(2026-07) |
| Gross rental yield | 6.5% | 4.3% | Spain: idealista: gross rental yield of housing in Spain, Q2 2026 (down from 7.2% a year earlier; Madrid ~4.5%, Barcelona ~4.8%) | Portugal: Global Property Guide, national average for apartments May 2026 (Lisbon approx. 3.8%, Setubal up to 4.9%)(2026-07) |
| Cost of living, EU = 100 | 91 | 87 | Spain: Eurostat price level index, actual individual consumption 2024: Spain 90.7 (EU-27 = 100; household final consumption 92.1) | Portugal: Eurostat price level index, household final consumption 2024 (EU-27 = 100)(2026-07) |
| Mortgage as non-resident | Yes | Yes | Spain: Major Spanish banks (Sabadell, Bankinter, CaixaBank, BBVA, UCI) actively lend to non-residents | Portugal: All large Portuguese retail banks run dedicated non-resident mortgage programmes(2026-07) |
| Typical completion | 6 to 12 weeks | 6 to 12 weeks | Spain: Resale purchases typically complete in 6-8 weeks from accepted offer (3-4 weeks for simple cash deals, up to 12 with mortgage or paperwork issues); new builds take far longer | Portugal: Cash purchases complete in 4-6 weeks; with a mortgage typically 2-3 months (promissory contract CPCV, then deed)(2026-07) |
| Golden visa | Ended | Active, property does not qualify | Spain: Ley Organica 1/2025 (KPMG flash alert) | Portugal: Law 56/2023 (Mais Habitacao) revoked the real-estate route; funds, research, cultural and job-creation routes confirmed still open in 2026(2026-08) |
The verdict, category by category
A table tells you what the numbers are. It does not tell you which of them should decide your purchase. That is what this section is for.
Prices
Depends entirely on where you look
The capitals are close and expensive: Madrid averages around EUR 5,900 per square metre against roughly EUR 6,100 in Lisbon, so Portugal is marginally dearer at the top. The two diverge sharply below that. Spanish coastal property averages about EUR 3,150 per square metre while the Algarve sits near EUR 3,870, so Spain is the cheaper coast. Inland the order flips hard: Spanish rural areas average about EUR 1,450 per square metre, and Portugal has 139 interior municipalities under EUR 1,000. If you want a cheap coastal flat, Spain. If you want a cheap house with land, Portugal.
Buying costs
Portugal, unless you are a non-resident buying after 1 September 2026
On paper Portugal wins comfortably: total costs of 3 to 11 percent against 8 to 13 percent in Spain, because Spanish transfer tax on resales runs 6 to 10 percent by region while Portuguese notary and registry fees are fixed amounts that barely register on a larger purchase. The catch is Decreto-Lei 97/2026. From 1 September 2026 non-resident buyers pay a flat 7.5 percent IMT, which lands them near the top of that Portuguese range and erases most of the advantage. It is refundable if you become a Portuguese tax resident within two years. So: Portugal if you are moving, close to a wash if you are not.
Ongoing taxes
Portugal, mainly because of Spanish wealth tax
Annual property tax is similar in effect, IBI at 0.4 to 1.1 percent of cadastral value against IMI at 0.3 to 0.45 percent of taxable value. The difference is what sits on top. Spain charges non-residents wealth tax on Spanish net assets above EUR 700,000, with a state solidarity tax of 1.7 to 3.5 percent above EUR 3 million that regional relief does not remove. Portugal's AIMI only bites above EUR 600,000 of residential taxable value and then at 0.7 percent. On rental income Spain is cheaper for EU and EEA residents at 19 percent of net income, against a flat 25 percent in Portugal, but non-EU owners pay 24 percent of gross rent in Spain with no deductions at all, which is usually worse.
The buying process
Spain, narrowly, on market depth
The mechanics are close. Spain needs an NIE, Portugal a NIF; both take six to twelve weeks; both offer non-resident mortgages at around 70 percent loan to value. Spain edges it on the size and professionalism of the market serving foreign buyers: more independent lawyers who do this daily, more competition among agents, and a regulated notary tariff that makes costs predictable. Portugal's Casa Pronta one-stop service is genuinely simpler and cheaper, but the pool of advisers is smaller. Neither country's notary checks the property on your behalf, so hire your own lawyer in both.
Residency
Neither, if you were hoping to buy your way in
This is where both countries disappoint the same buyer. Spain ended its golden visa entirely on 3 April 2025 under Ley Organica 1/2025. Portugal kept a programme but removed every real-estate route in October 2023, leaving a EUR 500,000 fund investment with no property exposure, job creation, or cultural and research contributions. Buying a house grants residency in neither country. Non-EU citizens are limited to 90 visa-free days in any 180-day period in both. If residency against property is the goal, this comparison is the wrong one to be reading.
Rental yield
Spain, by a clear margin
Spain's gross rental yield averages 6.5 percent against 4.3 percent in Portugal, and that is a large enough gap to change what the purchase is for. Both markets are tightening on short lets, though differently: Spain layers a regional licence on top of the national registration number introduced on 1 July 2025, with Barcelona intending to end tourist flats by the end of 2028, while Portugal's Decree-Law 76/2024 handed control back to municipalities and made existing licences permanent and transferable again. Portugal is the more predictable regime; Spain is the higher number.
So which one should you buy in?
If you are relocating, buy in Portugal. The transfer tax surcharge refunds itself when you become tax resident, there is no wealth tax waiting above EUR 700,000, inheritance passes to a spouse or child without tax, and the entry price inland is genuinely low in a way no Spanish region matches.
If you are buying a second home you will visit rather than live in, buy in Spain. Portugal's 7.5 percent flat IMT is a permanent cost for exactly that buyer, while Spain gives you a deeper market, a cheaper coast, and a gross yield of 6.5 percent against 4.3 percent if the place will be let when you are not in it. Accept in return that Spanish wealth tax is real above EUR 700,000 and that tourist letting is getting harder every year.
The one profile that fits neither: the non-EU buyer who wants residency out of the purchase. Both doors are shut. Look at Greece or Cyprus instead, and read Greece versus Cyprus for the choice between them.
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