Rental Yields by Town: Marbella vs Estepona vs Fuengirola

Rental yields on the Costa del Sol vary far more by town than most brochures admit. This guide compares rental yields in Marbella, Estepona and Fuengirola, three of the coast’s most-searched markets, and then shows how Spanish tax and licensing turn a headline percentage into the net return that actually reaches your bank account. If you are a foreign buyer weighing a new-build apartment for letting, the town you choose changes the gross figure, but the paperwork changes the net one.

Why rental yield varies so much along one coastline

Gross rental yield is simply annual rent divided by purchase price. Two things pull it in opposite directions along this coast. Prime towns command higher rents but even higher prices, which compresses the yield. Value towns have cheaper stock and dependable tenant demand, which lifts it. Layered on top is the split between long lets (a stable twelve-month tenancy) and short holiday lets (higher nightly rates but seasonal gaps, management costs and a licence requirement). A realistic comparison has to keep those two strategies separate, because a short-let headline of 8 percent and a long-let headline of 4 percent can describe the very same flat.

Rental yields by town: Marbella vs Estepona vs Fuengirola

The table below sets out indicative gross yield ranges reported for 2026. Treat them as market signals, not guarantees: actual yield depends on the specific unit, its sea view, its distance from the beach and how well it is managed.

Marbella

Marbella typically shows the lowest gross yield of the three on a long let, roughly 3.5 to 5.5 percent, because prices are high ³. Its case rests on capital appreciation and premium short-let performance, where well-managed units can reach 6 to 9 percent gross ³. If your priority is a resilient asset in a globally recognised location rather than the highest income multiple, Marbella fits, but you should not expect a value-town yield.

Estepona

Estepona is repeatedly named among the 2026 winners for pure rental yield, with expected gross returns commonly in the 5.5 to 7.5 percent band and often quoted around 6 to 7 percent ¹². Infrastructure upgrades, beachfront redevelopment and a lively old town have widened tenant demand without pushing prices to Marbella levels yet, which is what keeps the yield attractive ¹. For many foreign buyers it is the balance play: better income than Marbella, more growth headroom than the older resort towns.

Fuengirola

Fuengirola is the occupancy story. Competitively priced apartments and strong, year-round demand from both long-term tenants and holidaymakers make it a favourite for income-focused buyers rather than trophy-hunters ¹. Yields here are led by high occupancy and low entry prices rather than headline rents, so the net figure often holds up well once costs are deducted. It suits a buyer who wants dependable cash flow close to the airport.

The tax that decides your net yield: IRNR and Modelo 210

Every non-resident who earns Spanish rental income must declare it through the Impuesto sobre la Renta de no Residentes (IRNR) on form Modelo 210 ⁴. The rate is 19 percent for residents of the EU, the EEA, Iceland, Liechtenstein and Norway, and 24 percent for non-EU residents, which since Brexit includes the United Kingdom ⁴. The difference is not only the rate. EU and EEA landlords are taxed on net income and may deduct costs such as IBI, community fees, insurance, mortgage interest and depreciation, while non-EU landlords have historically been taxed on gross income with no deductions ⁴. A 2025 court ruling opened the door for non-EU owners to deduct expenses too, but implementation is still being clarified, so non-EU buyers should model both scenarios ⁴.

Reporting is also tightening. Regulation HAC/623/2026, published in June 2026, widens what a let property must disclose on the IRNR return: precise identification of the property, gross income, the deductible expenses applied and the resulting net income ⁷. Keep clean records from day one. When you later sell, non-resident capital gains are taxed at 19 percent, and the buyer must withhold 3 percent of the sale price on account and pay it via Modelo 211, which you reclaim or offset when you file ⁴. Related reading in this series covers Modelo 210 in depth and the non-resident selling process.

Purchase costs that set your entry price

Your yield denominator is the all-in purchase price, so the acquisition taxes matter. For a new-build bought from a developer you pay IVA (VAT) at 10 percent plus AJD (stamp duty) ⁶. In Andalucía the general AJD rate is 1.2 percent, confirmed by the Junta de Andalucía as in force since 28 April 2021 under Ley 5/2021 ⁵. A resale property is different: instead of IVA and AJD you pay ITP (transfer tax), set at a general 7 percent in Andalucía ⁵. You never pay both regimes on the same purchase. Budget for notary, land registry and legal fees on top, and for the NIE you will need before completion. Our purchase-cost and buying-process guides break these line items down.

Financing as a non-resident

If you borrow, the loan-to-value ceiling shapes both your entry cost and your deductible interest. Non-resident buyers in 2026 typically borrow between 60 and 70 percent LTV, with the higher end reserved for stronger financial profiles and EU applicants, and non-EU applicants often nearer 50 to 60 percent ⁸. Active lenders on the coast include Banco Sabadell, Bankinter, CaixaBank and UCI ⁸. Because EU and EEA owners can deduct mortgage interest against rental income, financing can improve the net yield as well as spread the capital outlay ⁴⁸. Plan for a valuation and factor the mortgage AJD and arrangement costs into your model.

Tourist licences and the short-let question

Much of the gap between long-let and short-let yield depends on whether you can legally operate a holiday rental. In Andalucía a holiday home is a Vivienda con Fines Turisticos (VFT), governed by Decreto 28/2016 and updated by Decreto 31/2024 and Decreto-ley 1/2025 ⁹¹⁰. Registration is a declaracion responsable submitted to the Registro de Turismo de Andalucia, not a discretionary permit, but the recent reforms added capacity caps, an urban-compatibility declaration and, since April 2025, a requirement for explicit community-of-owners consent ⁹¹⁰. Since late 2025 VFT properties must also appear in the national NRUA registry ⁹. Operating without registration risks heavy fines, so confirm a specific unit’s eligibility, and its community rules, before you underwrite a short-let yield ¹⁰. If your building blocks holiday lets, model the long-let figure instead.

Turning a headline yield into a net figure

To compare the three towns honestly, work top-down. Start with the gross yield for your chosen strategy, then subtract IRNR at 19 or 24 percent on the taxable base, recurring IBI and community fees, insurance, management (typically higher for short lets), and any mortgage cost ⁴. Estepona often leads on gross yield among the three, Fuengirola tends to defend its net figure through occupancy and low prices, and Marbella asks you to accept a lower income multiple in exchange for growth and prestige ¹²³. The right answer depends on whether you are buying for cash flow, for appreciation, or for personal use with income on the side. For lifestyle context, the coast is served year-round by Malaga airport with dense European connections, alongside established international schools and private healthcare, all of which underpin tenant demand across every town here.