If you own a home in Málaga or on the Costa del Sol and it is let to a tenant, you have probably asked yourself the same question as many of our clients this autumn: should I keep renting it out, or is it time to sell? Prices are at record highs and, in barely a week, Spain's rental rules have been approved, repealed and approved again by decree. Deciding whether to sell rented property is no longer just a financial choice: it is about how much control you want to keep over your own assets in the years ahead.
In this article we use data to explain what is happening in Spain's housing market in October 2026, what changes for you as a landlord, how much your rented home really earns and why, in many cases, selling now is the more profitable option. We also tell you when it does make sense to keep renting, because there is no one-size-fits-all answer.
📈 1. What Is Happening in Spain's Housing Market (October 2026)
Housing has never been so expensive in Spain. The average price of open-market housing reached €2,355/m² in the second quarter of 2026, 12.5% more than a year earlier, according to the Ministry of Housing (Rankia, September 2026). On the Costa del Sol the rise is even more visible:
| Area | Sale price (September 2026) | Annual change |
| Málaga province | €4,317/m² (all-time high) | +6,6% |
| Marbella | €5,967/m² (all-time high) | +3,2% |
| Benahavís | €5,602/m² | +6,5% |
| Estepona | €5,021/m² | +17,1% |
| Málaga city | €3,969/m² | +4,1% |
At the same time, the number of transactions is starting to slow: notaries signed 65,395 home sales in July, 11.1% fewer than a year earlier (General Council of Notaries). In Marbella, annual growth has also eased month after month, from 6.3% in April to 3.2% in September. Record prices with fewer sales usually signal a maturing market: whoever sells now does so while demand is still strong and before having to compete with more supply.
⚖️ 2. Spain's New Rental Rules: What Changes for You as a Landlord
2026 is proving to be the most unstable year for landlords since the Housing Act. In six months, Congress has struck down two rental decrees (Royal Decree-law 8/2026 in April and Royal Decree-law 26/2026 on 2 October), Parliament has been dissolved and a general election has been called for 29 November. On 7 October, the Government published two new decrees (Provivienda, OCU):
📜 Royal Decree-law 29/2026: in force since 8 October
- 💶 Rent almost frozen until 2028: until 31 December 2027, unless a new agreement is reached, the annual update is capped at 2%, and if your rent is already above the reference index, you cannot raise it.
- 🔒 Extraordinary extension of up to two years: a tenant who is up to date with payments can request it if their contract ends before 31 December 2028. You can only refuse in specific cases, such as needing the home for yourself or a relative, and wanting to sell is not one of them.
- 🛠️ More obligations: you must answer repair requests within 15 calendar days and, in new contracts, you can no longer pass the IBI property tax on to the tenant.
- 📅 Tougher rules for temporary lets: they require a real, documented reason and a term of between 31 days and 12 months, and more than two consecutive contracts with the same tenant count as a main residence.
⏳ Royal Decree-law 28/2026: planned for 15 November
It will only come into force if the Standing Committee of Congress ratifies it, but its content is what worries landlords most: mandatory renewals in five-year cycles (seven if the landlord is a company), a six-month notice period for non-renewal and compensation for the tenant if you do not renew, equal to the greater of 12 months' rent or one month per year of tenancy.
With an election ahead, nobody can say which rules will still apply in 2027. And for anyone with a rented home, that uncertainty is also a cost.
🧮 3. The Numbers: How Much Your Rented Home Really Earns
To decide whether to sell rented property or keep it, the first step is to calculate its real return. Using average rental and sale prices for September 2026 (idealista), the gross yield looks like this:
| Area | Rent (€/m² per month) | Sale (€/m²) | Gross yield |
| Marbella | €23.6 | €5,967 | 4,7% |
| Estepona | €21.1 | €5,021 | 5,0% |
| Benahavís | €21.2 | €5,602 | 4,5% |
| Málaga city | €16.5 | €3,969 | 5,0% |
| Málaga province | €18.8 | €4,317 | 5,2% |
But gross yield is misleading. From the rent you have to deduct IBI, community fees, insurance (and rent-default insurance, if you have it), maintenance, empty months and tax. If you are not resident in Spain, rental income is taxed under non-resident income tax: 19% on net income if you live in the EU, or 24% on gross income, with no deductible expenses, if you live outside it.
💡 Worked example: a 120 m² apartment in Marbella
- Market value: 120 m² × €5,967 ≈ €716,000.
- Market rent: 120 m² × €23.6 ≈ €2,830 a month, about €34,000 a year (4.7% gross).
- Costs and voids: if they take 25-30% of the rent, you keep about €24,000-25,500 before tax, roughly 3.4-3.6% net.
- Rent growth: capped at 2% a year until the end of 2027, while your costs (community fees, insurance, maintenance) rise with inflation.
In other words, you have over €700,000 tied up in an asset that returns around 3.5% net, with the rent practically frozen and a tenant who, under the new rules, may stay longer than you planned. The figures for your own home may differ, which is why we always recommend running the numbers with real data.
🏷️ 4. 7 Reasons to Sell Your Rented Property in 2026
1️⃣ Prices are at record highs
Málaga province and Marbella both set new records in September 2026. Selling at the top lets you lock in years of appreciation, instead of betting that the cycle keeps rising at the same pace.
2️⃣ International demand is still strong
Buyers from Northern Europe, the United States and the Middle East are still looking for a second home or a permanent move to the Costa del Sol. They buy to live in, and they value move-in-ready homes, as we explain in our guide on how to sell your house in Málaga to international buyers.
3️⃣ Your return has a legal ceiling
With the 2% cap until 2027 and the ban on raising rents above the reference index, your rental income is capped by law, while the sale value is not.
4️⃣ You lose control over your own home
The extraordinary extension of up to two years is already in force, and if Royal Decree-law 28/2026 is ratified, getting your home back could mean paying compensation of at least one year's rent. The longer you wait, the harder it will be to sell with vacant possession.
5️⃣ A vacant home sells better
Any buyer can purchase an empty home: families, international buyers or investors. A home with a sitting tenant only appeals to investors, who discount the price for the capped rent and the time until they can use it. The moment your tenant leaves is therefore a golden window to sell.
6️⃣ Political uncertainty is not going away soon
Three rental decrees in six months, two of them repealed, and an election on 29 November. Whatever the result, rental regulation will remain at the heart of the debate. Selling takes you out of that equation.
7️⃣ Liquidity for new opportunities
Turning an asset with a capped return into cash lets you diversify, reduce debt, help your family or reinvest in a home you can actually enjoy. Always with proper tax planning first.
🔑 5. How to Sell Rented Property: Your 3 Options
| Option | How it works | Pros | Cons |
| Sell with the tenant in place | The buyer takes over the contract and keeps the tenant on the same terms. | Immediate sale, no waiting. | Only appeals to investors and the price is usually lower. The tenant may have a right of first refusal unless they waived it in the contract. |
| Wait until the contract ends | You give notice of non-renewal within the legal period and sell the home empty. | Highest price and every type of buyer. | The tenant can request the extraordinary extension of up to two years, and selling is not a reason to refuse it. |
| Agree an early exit | You negotiate an early departure with the tenant, usually with compensation, and sign it in writing. | Speed and the price of a vacant home. | Requires negotiation and an agreed cost. |
💡 Key point: check your contract's end date today and whether your tenant has requested any extension. With Royal Decree-law 28/2026 pending ratification, non-renewal notices sent before 7 October keep their effect and do not trigger compensation.
💶 6. Taxes When Selling a Rented Home in Spain
When you sell, you pay tax on the capital gain: the difference between the sale price and the purchase price, plus documented costs and improvements (Lawants, 2026):
- 🇪🇸 Spanish tax residents: the gain is taxed in the savings base of income tax (IRPF), from 19% (first €6,000) to 30% (above €300,000).
- 🌍 Non-residents: a flat 19%, whether you live in the EU or not. The buyer withholds 3% of the price at the notary as a payment on account, and you then settle with Form 210.
- 🏛️ Municipal plusvalía: a local tax on the increase in land value, paid to the town hall within 30 days of signing.
⚠️ Note: because your rented home is not your main residence, you cannot apply the reinvestment exemption or the over-65 exemption for selling a main home. That is why it pays to work out the tax bill before setting a price, so you know what you will really keep.
🤔 7. When Does It Make Sense to Keep Renting?
Selling is not the best option for everyone. Keeping your home rented out can make sense if:
- You do not need liquidity and your investment horizon is over 10 years.
- You have a reliable tenant, a recent contract and a rent in line with the market.
- You bought recently and the gain does not yet cover the costs of selling.
- You plan to live in it yourself or leave it to your children.
If you decide to keep it, the key is managing it well: a well-drafted contract, a carefully selected tenant and a market rent. In our rentals section for Málaga and the Costa del Sol we work with international families and relocated executives looking for quality homes for long-term and mid-term rentals.
❓ Frequently Asked Questions About Selling a Rented Property
Can I sell my rented home with the tenant still living there?
Yes. The sale does not end the contract: the buyer steps into your position and must respect the tenancy on the same terms. Before selling, check whether the tenant has a right of first refusal, meaning priority to buy at the same price, or whether they waived it in the contract.
Can I ask my tenant to leave because I want to sell?
Not as a legal ground. You can give notice of non-renewal at the end of the contract within the legal period, but since 8 October 2026 the tenant can request an extraordinary extension of up to two years, and the intention to sell does not allow you to refuse it. The most practical route is usually to negotiate an agreed exit in writing.
Is a rented home worth less?
Usually yes, because the pool of buyers shrinks to investors, who price the home based on the rent and the time until they can use it. The discount depends on the rent, the remaining term and the area. A professional valuation will tell you what your home is worth in each scenario.
What tax do I pay if I sell and I am not resident in Spain?
19% on the capital gain, whether you live in the EU or elsewhere. The buyer withholds 3% of the price at the notary and pays it to the tax office; you then file Form 210 to settle the actual tax and, if the withholding was higher, reclaim the difference. The municipal plusvalía is also payable.
Is it a good time to sell in Marbella and on the Costa del Sol?
Prices in Marbella and Málaga province are at all-time highs and international demand remains active, although growth is starting to slow. For many owners of rented homes, the combination of record prices and an increasingly restrictive legal framework makes 2026 a particularly favourable time to sell.
Do the new decrees affect me if my contract is old?
Yes. The 2% cap on rent updates also applies to contracts signed before May 2023, and the extraordinary extension covers any contract in force on 8 October 2026 whose extension period ends before 31 December 2028. Check your specific case with a professional.
🤝 Sell Your Rented Property with Data, Not Doubts
Choosing between renting and selling is one of the most important financial decisions you will make, and in 2026 the context is changing almost every week.
At Why Malaga we help you make it with real numbers: we value your home with and without a tenant, calculate what you will keep after tax and, if you decide to sell, present it to our network of international buyers, including a discreet Off-Market sale. And if you prefer to keep it, we help you let it to quality international tenants.
📲 Do you own a rented home in Málaga or on the Costa del Sol? Request a free, no-obligation valuation or explore our portfolio of properties for sale.
This article is for information only and reflects the rules published as of 9 October 2026. It does not constitute legal or tax advice; please check your specific situation with a professional.
