Madrid: budgeting for the Balearic sustainable tourism tax

Many people living in the United Kingdom who arrange a Spanish mortgage for a property Madrid first come across the sustainable tourism tax only once they consider letting the home to visitors. It is a regional charge, separate from the taxes and fees involved in buying.

Understanding when it applies, and how it differs from the one-off costs settled at completion, helps build a realistic budget both for the purchase itself and for owning the property afterwards.

Madrid province is centred on the Spanish capital, an inland city with no coastline, drawing buyers focused on urban life, business connections or investment rather than beach lifestyle. Many buyers are professionals relocating for work, families using international schools, or investors targeting rental demand.

Madrid-Barajas is one of Spain's main international airports, offering extensive global connections. Property in the city centre is mostly apartments, while outer areas of the province offer houses and chalets, and demand stays fairly constant through the year rather than following a summer season.

This section brings together dated, sourced data on Madrid (province): who lives there, what properties are asking for, how the area connects to the rest of Spain, and its climate. Reading them first should give you a clearer, realistic sense of Madrid (province) before you size a mortgage budget.

According to the INE annual census, 7,113,886 people were registered as living in the whole of Madrid province on 1 January 2025. The count takes in every town and village across the province, not only its capital. In the province of Madrid, 1,181,319 residents hold a foreign nationality, about 17 of every 100 people registered there. That is a significant but not dominant share, and it varies considerably from one town to another within the province.

INE counted only 10,938 British nationals registered in the whole province of Madrid on 1 January 2025, a small number of compatriots. Remember that the padrón only reflects people living there most of the year, not second-home owners. The table below lists the largest foreign nationalities registered in Madrid (province) on 1 January 2025, among those INE publishes for every municipality.

A further table sets out nationalities not broken down above, among them Germans, Italians, Dutch, Belgians and Scandinavians, registered throughout Madrid province. Unlike that earlier table, this one uses data from 1 January 2022, the latest edition with full nationality detail.

In our own price bank, the 32,271 homes currently advertised for sale across the province of Madrid show a median asking price of €3,920/m² and a median ticket of €360,000. That is above the €3,135/m² median recorded across the 130 towns we track across Spain. Among current adverts, the central half cluster between €2,820 and €6,030 per square metre; some properties are listed well below this band, others well above it.

In Madrid (province), the regional transfer tax rate of 6 % applied to the median asking price of €360,000 gives a tax bill of about €21,600, plus roughly €4,300 for notary, registry and gestoría charges. That puts the total near €25,900, money the mortgage will not cover. These are asking prices taken from adverts active on 2026-11-01, not confirmed sale prices. What a buyer actually pays is negotiated, and depends on the condition, exact location and orientation of each home.

Below is a comparison of the towns we follow in Madrid, covering inhabitants, foreign residents per 100 inhabitants and median asking prices per square metre across the province.

In 05/2026, INE's experimental estimate based on platform listings counted just 13,431 tourist homes in Madrid (province), with 51,387 bed places, roughly 2 per 1,000 residents. This low figure fits a market that is predominantly residential.

Before booking, confirm that Aeropuerto Adolfo Suárez Madrid-Barajas (MAD), the one commercial airport serving Madrid (province), has a connection from your home airport at the time of year you intend to fly, as this changes seasonally. The climate figures below were recorded in or near Madrid, the provincial capital, and conditions elsewhere in the province, inland, at altitude or on other islands, can differ noticeably. The mean temperature in January is 6.3 °C (average daily minimum 2.7 °C) and in August 25.1 °C (average daily maximum 31.3 °C), a cold winter for this country. Buyers should budget for proper heating and insulation. Rainfall is moderate: about 421 mm a year, spread over roughly 59 days with measurable rain. Climate data come from AEMET's 1981-2010 normals, recorded at its Madrid, Retiro station around 2 km away; the actual spot may vary a little, particularly further inland or higher up.

77,763 home sales were registered in the province of Madrid in the twelve months to 07/2026, according to INE. A market of this size usually means more comparable sales and a wider choice of homes for buyers. Bear in mind that these numbers reflect the province of Madrid overall; they shift a great deal between towns and between individual properties. Let us know what you have in mind so we can look at your case.

The transfer tax on a resale home is set by each Spanish region. In Madrid the general rate is 6 %, and on top of it come notary, land registry and gestoría (roughly one more percent). On a new build you pay 10 % VAT plus stamp duty instead of the transfer tax. This money is not lent by the bank.

The Balearic sustainable tourism tax, locally the Impost sobre Estades Turístiques, is charged for each night spent in tourist accommodation across the islands. It is paid by the guest and normally collected by whoever manages the stay, with the proceeds earmarked for environmental and infrastructure projects on the islands.

For a buyer arranging a Spanish mortgage to purchase a home Madrid, this tax does not appear in the notary's completion figures or in the bank's valuation report. It only becomes relevant once the property is used for paid tourist stays, so it belongs in a separate, ongoing budget rather than in the one-off costs of buying.

Buying a home with a mortgage in Madrid already involves several fixed costs beyond the price: transfer tax on a resale property, or VAT at 10% plus stamp duty on a new build, together with notary fees, land registry fees, a gestoría to handle paperwork, and the bank's own valuation of the property. These are settled once, around completion.

The sustainable tourism tax works on a different timeline. If there is ever a plan to let the property to visitors, it becomes a recurring cost that depends on occupancy, sitting alongside, not instead of, the annual tax return every non-resident owner in Spain must file.

Spanish banks assessing a mortgage application from someone living in the United Kingdom typically ask for recent P60s and payslips, the last filed Self Assessment tax return, three to six months of bank statements, details of any existing loans or mortgage commitments, and a valid passport. Each document is usually required in a sworn Spanish translation, and the exact list varies by bank.

Because the United Kingdom uses the pound rather than the euro, it is worth tracking exchange-rate movements and conversion costs separately from the property budget: a stable euro figure for purchase costs can still represent a moving sterling amount depending on when transfers are made.

Owning a home as a non-resident brings its own annual paperwork: every non-resident owner in Spain files a yearly tax return on the property, regardless of whether it is let. If letting income is involved, the sustainable tourism tax collected from guests is reported and paid separately, through the regional tax authority, not through that annual return.

If the property is ever sold, the buyer withholds 3% of the price on account of the seller's Spanish tax, a rule that applies to every non-resident seller and is unrelated to the tourism tax or to the mortgage that financed the purchase. A tax adviser familiar with both Spanish and UK rules, and with the double taxation agreement between the two countries, can keep these obligations straight.

Spain is a relatively short flight away from most UK airports, making regular visits to a Spanish property straightforward for owners based in Britain. Many British buyers are drawn to Spain for its climate, coastal lifestyle and established expatriate communities. One practical point to bear in mind is that Spanish inheritance law differs from UK rules, so it is worth taking specific advice on how it may affect the property and one's estate. Currency movements between sterling and the euro can also affect the overall cost of purchase and ongoing expenses.

Spain and the United Kingdom have a double taxation agreement in place, and a local tax adviser should confirm how rental income or gains from Spanish property must be declared and reported to HMRC.

As the United Kingdom is no longer an EU member state, British citizens may stay in Spain for up to 90 days in any 180-day period without a visa, and must apply for a visa or residence permit for longer stays.

Since the United Kingdom uses the pound sterling (GBP) rather than the euro, buyers should factor in exchange-rate movements and currency conversion costs when paying for a property or transferring funds to Spain.