Introduction
Irish expats and investors are increasingly looking beyond the island for holiday homes, retirement retreats, or rental income assets. Two Mediterranean neighbours dominate the shortlist: Spain and Portugal. Both enjoy sunshine, good connectivity to Ireland, and a long‑standing reputation as safe, affordable havens for overseas buyers. Yet the markets are diverging in price growth, foreign‑buyer demand, tax incentives and rental‑yield potential.
This article breaks down the latest data (2024‑2025) and practical considerations so you can decide which country aligns best with your budget, lifestyle and investment goals.
1. Spain’s Property Market – 2024 Snapshot
| Metric |
2024 Figure |
Key Insight |
| Total homes sold |
641,919 (↑10% YoY) |
Third‑highest annual volume since 2007 |
| New‑build transactions |
135,052 (↑23.4%) |
Strong developer confidence |
| Second‑hand transactions |
506,867 (↑6.9%) |
Balanced market |
| Foreign‑buyer share |
14.5% of all sales |
UK remains top foreign market (8,031 deals) |
| Average price – Costa Blanca |
€162,132 (↑7% YoY) |
10th consecutive year of growth |
| Average price – Costa del Sol |
€5,501 / m² (↑4.16% Q) |
Luxury segment thriving |
| Top growth regions (Dec 2024) |
La Rioja (+77.5%), Basque Country (+61.5%), Valencian Community (+51.2%) |
Regional hotspots beyond the coasts |
1.1 Regional Highlights
- Costa Blanca (Alicante province) – 43.5% of transactions were by foreign buyers in H1 2024, attracted by affordable luxury and excellent transport links.
- Costa del Sol (Málaga province) – 30% of purchases were foreign‑held, with Marbella leading price growth (+5.6% quarterly) and a €3.2 bn luxury‑segment turnover.
- Balearic Islands & Canary Islands – High demand for holiday villas, but price growth has slowed to ~2% as supply catches up.
1.2 Financing & Taxes
| Item |
Detail |
| Mortgage rates (2024) |
3.1%‑3.8% for non‑resident borrowers (10‑30‑year terms) |
| Property transfer tax |
6‑10% depending on region (e.g., 8% in Andalusia, 10% in Catalonia) |
| Annual property tax (IBI) |
0.4%‑1.1% of cadastral value |
| Capital gains tax |
19%‑23% for non‑residents (progressive) |
| Golden Visa |
€500,000 investment threshold; still active, fast‑track residency for non‑EU buyers |
2. Portugal’s Property Market – 2025 Outlook
| Metric |
2025 Figure |
Key Insight |
| National median price |
€2,065 / m² (↑19% YoY) |
|
| Total sales volume |
41,608 dwellings (↑15.6% YoY) |
|
| Lisbon median price |
€4,865 / m² |
|
| Porto median price |
€3,309 / m² |
|
| Foreign‑buyer premium (Lisbon) |
+61.9% vs. domestic |
|
| Foreign‑buyer premium (Porto) |
+29% vs. domestic |
|
| Top Lisbon parish price |
Santo António €7,289 / m² |
|
| Top Porto parish price |
Aldoar‑Foz do Douro‑Nevogilde €4,716 / m² |
|
| Inland growth (Baixo Alentejo) |
+38.7% YoY (Q2 2025) |
|
2.1 Regional Highlights
| Area |
Median Price (€/m²) |
Growth 2024‑25 |
Foreign‑buyer share |
| Lisbon (city centre) |
€5,300‑€7,300 |
18% YoY |
30%‑35% of transactions |
| Porto (central) |
€3,000‑€4,700 |
12% YoY |
20%‑25% |
| Algarve (coastal) |
€3,200 |
14% YoY |
45%‑50% (British, Dutch, German) |
| Alentejo (inland) |
€1,500 |
38% YoY |
Growing interest from retirees & remote workers |
2.2 Financing & Taxes
| Item |
Detail |
| Mortgage rates (2025) |
3.3%‑4.0% for non‑residents (15‑30‑year terms) |
| Property transfer tax (IMT) |
1%‑6% (lower for primary residence) |
| Stamp duty (IS) |
0.8% of purchase price |
| Annual municipal tax (IMI) |
0.3%‑0.5% of tax‑valued price |
| Capital gains tax |
28% for non‑residents (flat) |
| Golden Visa |
Suspended for Lisbon, Porto & Coimbra (2022‑2025); still available in the Algarve, Alentejo & interior regions (€500k investment) |
| Non‑Habitual Resident (NHR) tax regime |
10‑year personal income tax exemption on foreign‑sourced income, attractive for retirees |
3. Key Comparison Factors
3.1 Price Levels & Growth
| Aspect |
Spain |
Portugal |
| Average price (2024‑25) |
€162k for a typical home in Costa Blanca; €5,500 / m² in Costa del Sol |
€2,065 / m² nationally; €4,865 / m² in Lisbon |
| YoY price growth |
7% (Costa Blanca) – 4% (Costa del Sol) |
19% nationally, 18% in Lisbon |
| Affordability |
More affordable in coastal Spain for larger properties; lower entry price for 2‑bedroom apartments (€150‑200k) |
Higher price per sqm in Lisbon/Porto but still competitive for inland towns (e.g., Alentejo €1,500 / m²) |
3.2 Foreign‑Buyer Demand & Premiums
- Spain: 14.5% of all sales were foreign‑owned in 2024; UK leads with 8,031 transactions. Premiums are modest (typically 5‑10% above domestic price).
- Portugal: Foreign buyers command a significant premium – up to 62% above local price in Lisbon – reflecting limited supply and strong demand from UK, Germany, France and the USA.
3.3 Residency & Tax Incentives
| Incentive |
Spain |
Portugal |
| Golden Visa |
Active, €500k investment, fast‑track EU residency, path to citizenship after 5 years |
Suspended for Lisbon/Porto; still open for Algarve & interior (€500k) |
| Tax-friendly regimes |
No special expat regime; non‑resident income tax 24% on Spanish‑source rental income |
NHR – 10‑year exemption on foreign income, 20% flat tax on Portuguese‑source “high‑value” professions |
| Inheritance tax |
Regional differences; some autonomous communities offer exemptions for close relatives |
Generally lower than Spain; exemptions for spouses and direct descendants |
3.4 Rental Yield & Investment Potential
| Market |
Typical Gross Rental Yield* |
| Costa del Sol (Spain) |
4.5%‑5.5% (holiday rentals) |
| Costa Blanca (Spain) |
5%‑6% (long‑term) |
| Lisbon (Portugal) |
4%‑5% (city centre) |
| Porto (Portugal) |
5%‑6% (city centre) |
| Algarve (Portugal) |
6%‑8% (seasonal holiday lets) |
| Alentejo (Portugal) |
5%‑7% (rural retreats) |
*Yield calculated as annual rent ÷ purchase price, before taxes and management costs.
3.5 Legal & Transaction Process
| Step |
Spain |
Portugal |
| Pre‑contract (arras) |
10% deposit, binding; 10‑day cooling‑off period |
10% deposit; 10‑day cooling‑off (optional) |
| Notary & registration |
Mandatory notary; registration at Land Registry (≈€1,000) |
Notary required; registration at Conservatória (≈€800) |
| Time to completion |
30‑45 days (new build may be longer) |
30‑60 days (especially for Golden‑Visa‑eligible projects) |
| Legal representation |
Recommended to use a Spanish solicitor (abogado) |
Portuguese solicitor (advogado) advisable, especially for NHR registration |
4. Which Market Suits Different Irish Buyers?
| Buyer Profile |
Ideal Market |
Why |
| First‑time holiday home buyer (budget €200‑300k) |
Costa Blanca, Spain |
Lower entry price, large selection of apartments/villas, strong rental market for short‑term lets. |
| Retiree seeking a tranquil lifestyle & tax efficiency |
Alentejo or Algarve, Portugal |
NHR regime waives tax on foreign pensions; affordable inland properties with scenic surroundings. |
| Investor chasing high capital growth |
Lisbon, Portugal |
19% YoY price rise, strong foreign‑buyer premium, robust demand for short‑term rentals. |
| Luxury buyer wanting prestige & EU residency |
Marbella, Costa del Sol, Spain |
Golden Visa still active; high‑end market, world‑class amenities, 5‑year residency path. |
| Remote worker needing good connectivity |
Porto, Portugal |
Growing tech hub, excellent broadband, lower cost of living than Dublin, attractive rental yields. |
| Family looking for a secondary residence close to Ireland |
Northern Spain (Costa Brava) or Central Portugal (Lisbon suburbs) |
Shorter flight times, English‑speaking communities, well‑developed schools and healthcare. |
5. Practical Steps for Irish Buyers
- Define your objective – holiday use, retirement, or rental income.
- Set a realistic budget – include purchase price, 10‑15% for taxes, notary, legal fees, and a 5% contingency for renovations.
- Choose a reputable local solicitor – they will verify title, ensure no debts, and handle the notary deed.
- Open a local bank account – needed for mortgage payments, utility bills and tax filings.
- Secure financing – compare Irish banks offering foreign‑property mortgages with Portuguese/Spanish lenders.
- Consider residency programmes – evaluate Golden Visa eligibility, NHR registration (Portugal) or Spanish residency routes.
- Perform due diligence on the development – check builder reputation, completion guarantees, and community fees.
- Plan for rental management – if you intend to let, engage a local property manager (typical fee 15‑20% of gross rent).
- Understand tax obligations – both in the host country and with the Irish Revenue (foreign‑income reporting).
- Visit the property – spend at least a few days living in the area to confirm lifestyle fit before signing the contract.
Conclusion
Both Spain and Portugal offer compelling opportunities for Irish overseas property buyers, but they cater to slightly different priorities:
Spain shines for affordable coastal living, a well‑established Golden Visa, and a large, diversified market where foreign‑buyer premiums are modest. It is ideal for first‑time holiday‑home owners and those seeking a classic Mediterranean lifestyle.
Portugal stands out for rapid price appreciation, higher foreign‑buyer premiums, and especially the tax‑friendly NHR regime that makes it a haven for retirees and high‑net‑worth individuals. Its emerging tech cities and inland gems provide attractive yields and a modern lifestyle.
Ultimately, the “better” market hinges on your personal goals, budget, and appetite for residency benefits. By following the practical steps outlined above and consulting local experts, you can make an informed decision and secure a property that delivers both enjoyment and financial reward for years to come.
