4-bedroom villa in Ráfol de Almunia – 10-year investment simulator

Net result if sold in year 10

+€153,572

After all costs, taxes and the mortgage

Annual return (IRR)

3.0%

On your own money

Cash needed at purchase

€365,979

€542,607 incl. yearly shortfalls

Average net cash flow per year

−€17,663

After mortgage payments and tax

Gross yield 5.2%Net yield 1.3%

Good to know

Holiday rental needs a tourist licence in the Comunitat Valenciana. Check that this property has one, or can get one, before you count on this income.
In some years the rental income does not cover the mortgage and costs. Keep a cash reserve for those years.
VAT of 10% on stays of 30 nights or less is in a decree that still needs approval by the Spanish Congress. You can switch it off under Rental income.

Assumptions

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Purchase & financing

Purchase price €690,000

Down payment 40%

€276,000 of own money

Mortgage interest rate 3.90%

Mortgage term 25 years

Rental income

High season, price per week €2,390 / week

High season occupancy 95%

Mid season, price per week €1,600 / week

Mid season occupancy 60%

Low season, price per week €880 / week

Low season occupancy 25%

Weeks of own use 3 weeks

Booking platform fee 12.0%

of gross holiday income

VAT on short stays (10%, in force since 8 Oct 2026, pending ratification) On

Running costs

Management fee 24.2%

of rental income after VAT

IBI (municipal property tax) €1,760 / year

Waste collection tax €410 / year

Home insurance €907 / year

Community fees €0 / year

Pool & garden €2,100 / year

Utilities €5,100 / year

Maintenance reserve 0.50%

of the property value, each year

Tax adviser €600 / year

Growth

Property value growth 5.00%

per year

Rent growth 2.50%

per year

Cost inflation 2.50%

per year

Exit & tax

Sell after 10 years

Agency fee on sale 6.05%

of the sale price, incl. VAT

Plusvalía (municipal tax on sale) €3,500

Value, equity and mortgage

Projection at the end of each year

Property value
Equity
Mortgage balance

Equity = property value minus mortgage, before sale costs and taxes.

Year by year

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Year	Net cash flow	Value	Mortgage balance	Equity	Gross rental income	Mgmt & ops	Mortgage payments	Tax & VAT	Net cash flow
1	−€18,194	€724,500	€404,019	€320,481	€39,595	−€26,877	−€25,949	−€4,962	−€18,194
2	−€18,082	€760,725	€393,643	€367,082	€40,584	−€27,549	−€25,949	−€5,169	−€18,082
3	−€17,968	€798,761	€382,854	€415,907	€41,599	−€28,237	−€25,949	−€5,380	−€17,968
4	−€17,852	€838,699	€371,637	€467,063	€42,639	−€28,943	−€25,949	−€5,598	−€17,852
5	−€17,733	€880,634	€359,974	€520,660	€43,705	−€29,667	−€25,949	−€5,822	−€17,733
6	−€17,612	€924,666	€347,848	€576,818	€44,798	−€30,409	−€25,949	−€6,051	−€17,612
7	−€17,488	€970,899	€335,241	€635,658	€45,917	−€31,169	−€25,949	−€6,287	−€17,488
8	−€17,362	€1,019,444	€322,134	€697,311	€47,065	−€31,948	−€25,949	−€6,530	−€17,362
9	−€17,234	€1,070,416	€308,506	€761,911	€48,242	−€32,747	−€25,949	−€6,779	−€17,234
10	−€17,102	€1,123,937	€294,336	€829,601	€49,448	−€33,565	−€25,949	−€7,036	−€17,102
Total	−€176,628				€443,592	−€301,111	−€259,494	−€59,614	−€176,628

Gross rental income − mgmt & ops − mortgage payments − tax = net cash flow. Tax includes VAT on short stays and income tax.

If you sell in year 10

Sale price: €1,123,937
Agency fee: −€67,998
Plusvalía: −€3,500
Capital gains tax: −€61,924
Mortgage repayment: −€294,336
Net proceeds: €696,179

For a non-resident seller, the buyer withholds 3% of the price (€33,718) and pays it to the tax office. You get it back, or it is set against your capital gains tax. It is a timing item, not a cost.

Purchase costs

VAT + stamp duty (IVA 10% + AJD 1.4%): €78,660
Notary & land registry: €2,070
Lawyer (incl. VAT): €8,349
Mortgage set-up (valuation, gestoría): €900
Total purchase costs: €89,979
Down payment: €276,000
Mortgage amount: €414,000
Total cash needed: €365,979