France vs. Spain: Where to Invest in Real Estate in 2026?
Real Estate 2026 · Comparative Analysis
With geopolitical tensions running high, volatile financial markets, and interest rates stabilizing… 2026 is the year when choosing where to invest in real estate has become a strategic decision. Two experts face off on BFM Business to settle the matter.
By Geoffroy Reiser, co-founder of Terreta Spain · "Les Experts de l’Immo " Debate — BFM Business · March 2026
▶ The full debate
Geoffroy Reiser (Terreta Spain & Terreta France) and Thierry Vignal (Atom) live on BFM Business
01
The Context: Why Europe Is Emerging as a Safe Haven
In just a few weeks, the tables have turned. Financial market volatility and geopolitical tensions have restored European real estate to a status it has perhaps never deserved more: that of the ultimate safe haven.
A clear sign: Over the past 30 days, Terreta Spain has seen the arrival of a new demographic—clients from Qatar, Kuwait, and Dubai (United Arab Emirates), nationalities that had been virtually absent until now. This is a clear geopolitical shift that illustrates just how much the stability of the European environment is becoming a key investment factor in its own right.
“Borders have never been a barrier to my investments—I’ve lived in Switzerland and bought property in Lyon, lived in France and bought property in Spain. But I’ve never felt the urge to buy property outside of Europe.”
Geoffroy Reiser, co-founder of Terreta Spain
02
France's advantage: the banking sector
The French banking system offers something that few other European countries do: access to credit with down payments among the lowest in Europe and fixed interest rates. This is the hallmark of the French real estate market—and one of the reasons why it remains one of the largest in Europe.
30 000 €
Average down payment in France s (for a property priced at €300,000)
80 000 €
Average down payment in Spain s (for a property priced at €300,000)
41 years old
Age at first purchase of in Spain
However, in Spain, there is a crucial distinction depending on your tax status:
🇪🇸 Spanish tax resident
80%
of the amount financed by the bank
Primary residence ~10% + fees
Second home ~20% or 30% + fees
🌍 Non-resident for tax purposes in Spain
70%
of the amount financed by the bank
Applies to any investor based outside Spain: whether in the European Union or on the other side of the world
💡About one-third of Spanish loans are variable-rate (Euribor + bank margin), compared with nearly all being fixed-rate in France. However, borrowers in Spain now prefer fixed rates.
03
The profitability comparison: 5% vs. 7%
This is where Spain takes the lead. In a ranking of the 20 largest cities in France and Spain combined, 9 of the 10 most profitable cities are in Spain.
3–5%
's Gross Yield in Major French Cities
5–7%
's Gross Yield in Major Spanish Cities
9/10
The most profitable cities— —are in Spain
France/Spain Combined Ranking — 20 Major Cities
SpainFrance
9/10
The nine most profitable cities are in Spain.
Only Marseille (ranked 10th) represents France in the top 10—all other French cities are at the bottom of the rankings.
The surprise in interest rates: a fixed rate of 1.70% in Spain
Contrary to what one might expect, some Terreta Spain clients secured 25-year fixed rates of 1.70% in March 2026—almost half the best rates available in France (3.20–3.60%). This difference amounts to tens of thousands of euros over the life of a loan.
⚠️Note: About one-third of Spanish mortgages remain at variable rates (Euribor + 1–2% margin). For high-value properties, a fixed rate offers significantly greater security.
05
The golden rule: Who is each market aimed at?
The two markets simply do not cater to the same type of investor.
The Golden Rule of Franco-Spanish Investment
🇫🇷 Limited available nutrients
Invest in France
With a 10% down payment, you gain access to a stable market that offers tax advantages (LMNP) and robust legal protection. French mortgage financing remains unbeatable.
🇪🇸 Large amount available
Invest in Spain
With a 30–40% equity contribution, Spain offers higher returns, prices that remain affordable, and sustained market growth.
06
Is the boom over in Spain? The numbers say no
The “end-of-cycle” argument deserves to be tested against the data. The figures from BBVA Research tell a very different story.
+10,2%
Projected price increases , Spain, 2026
+6,6%
Projected growth –2027
+16%
Expected total earnings over two years
Three structural drivers account for this trend:
01
Demographics: Spainhas recorded a net migration of 500,000 to 600,000 people per year for the past six years—the highest population growth in Europe. Latin America has been turning to Spain as the United States closes its borders.
02
The structural shortage: 250,000 new households are formed each year, but only 80,000 new homes are built. The average household size has fallen from 4.2 to 2.5 people over the past 30 years: the shortfall is inevitably widening.
03
Economic growth: Spainhas posted 3% GDP growth, compared with 0.7–0.8% for France. It is the economic engine of the eurozone.
07
Legal certainty: French notary vs. Spanish lawyer
The French notarial system—public officials who verify land registry records, discharge mortgages, and ensure the chain of title—has no direct equivalent in Spain, where this role is entrusted to specialized property hunters such as Terreta Spain, assisted by “Gestor” or “Gestoría.”
That doesn’t mean Spain is a risky place to buy property: it’s part of the European Union, has a modern land registry, and 20% of buyers there are foreigners. But a French buyer acting alone could make costly mistakes.
⚠️Key point — the suspension clause: while technically possible, it is almost always rejected by sellers for attractive properties. In Spain, you must secure financing before signing the preliminary agreement (arras), or you risk losing the deposit (usually 10% of the price). Terreta can also assist you with this.
✅Foreign buyers account for 20% of the Spanish market. French buyers complete thousands of transactions there every year. With the right guidance, it is a perfectly secure market.
08
France vs. Spain: A Head-to-Head Comparison
An unbiased analysis of both markets based on the factors that truly matter to French-speaking investors.
Rental Taxation
LMNP: Depreciation, deductions for expenses and interest — virtually no taxes for 10–15 years
A system very similar to the LMNP: deductibility of expenses, interest, and depreciation. Similar net income.
Legal certainty
Notaries Public — Cadastral Verification, Mortgage Discharge
Real estate agents such as Terreta Spain, “Gestorías,” and Spanish notaries. Secure with expert guidance
Loan & Down Payment
10% down payment sufficient, fixed rates prevail, maximum leverage
30% for non-residents (70% eligible for financing), with fixed rates that are more favorable than in France.
Credit suspension clause
Public policy loan condition — the buyer is always protected
Technically possible, but virtually nonexistent when it comes to good opportunities
Gross yield
3–5% in major cities
5–7% in major cities
Rising prices
Market at the start of a cycle, good entry points
+10.2% projected for 2026, +6.6% in 2027 (BBVA Research)
Economic trends
0.7–0.8% GDP growth
3% GDP growth — the driving force of the eurozone
✅Regarding taxation: Spain has a rental deduction system very similar to the LMNP—expenses, loan interest, and depreciation are deductible. The net after-tax return is often comparable, and sometimes higher, thanks to higher gross returns.
09
What investment strategy should we adopt in 2026?
In France: the heyday of investment properties in second-tier cities is largely over. The consensus in France for 2026: studio apartments in major European cities.
In Spain, shared housing is on the rise—no longer limited to students, but increasingly adopted by young workers who cannot access the traditional rental market.
💡Tip for shared housing: Switching from a traditional rental to a shared rental yields an average of 2 percentage points more in Spain. For a three-bedroom apartment in Valencia, this can increase the yield from 6.5% to 8.5%.
The verdict: And the winner is…
There is no clear winner. There is simply the best option for your specific situation. France has the edge in terms of security, leverage, and stability. Spain has the edge in terms of gross profitability, economic growth, and demographic trends.
The numbers speak for themselves: with a projected increase of 10.2% in 2026 and 6.6% in 2027, every month you wait in Spain is a month of lost appreciation.
🇫🇷 Choose France if…
Your down payment is less than 15%
Do you want to optimize your tax situation through the LMNP?
Are you looking for stability above all else?
You prefer to be geographically close
Shop in Paris with Terreta France
🇪🇸 Choose Spain if…
You have a down payment of 30 to 40%
Are you aiming for a gross return of more than 6%?
You're betting on growth
Are you ready to get some guidance?
Buy property in Spain with Terreta Spain
10
Frequently Asked Questions: Investing in Spain vs. France
What is the average rental yield in Spain compared to France?
In France, major cities offer gross yields of between 3% and 5%, with a national average of around 5%. In Spain, major cities such as Valencia, Seville, and Murcia offer yields of between 5% and 7%, with an average of around 7%. In a combined ranking of the 20 largest cities, 9 of the 10 most profitable cities are in Spain.
How much of a down payment is required to buy a home in Spain if you're a French citizen?
A French citizen residing in France is considered a non-resident for Spanish tax purposes. Spanish banks finance up to 70% of the purchase price. You should budget for a ~30% down payment plus 10% to 12% in closing costs. For a property priced at €300,000, this amounts to approximately €120,000 to €130,000. Check out our guide to mortgages in Spain.
Is it risky for a French person to buy property in Spain?
Spain is a member of the European Union, with a modern land registry and a robust legal system. Twenty percent of buyers there are foreign nationals, and French buyers complete thousands of transactions there each year. The main risk is a lack of understanding of local specifics—particularly the practical absence of a credit contingency clause. Working with a specialized property finder like Terreta Spain helps you avoid these pitfalls.
What are the rental tax rules in Spain for a French investor?
Spain has a system very similar to France’s LMNP: expenses, loan interest, and property depreciation are deductible from rental income. The net taxable income is often comparable, and sometimes higher. As a non-resident for tax purposes in Spain, you will be taxed in Spain on your rental income, with the option to avoid double taxation through the Franco-Spanish tax treaty.
What are the best mortgage rates in Spain in 2026?
In March 2026, the best fixed rates obtained by Terreta Spain customers in Spain were 1.70% over 25 years—roughly half the best rates in France (3.20–3.60%). Check out our comprehensive guide to financing in Spain.
Is it better to invest in Valencia, Madrid, or Barcelona?
Valencia offers the best return on investment: €3,000–€3,500 per square meter at purchase for rents of €15 per square meter, which is 40% to 50% cheaper than in Lyon or Bordeaux for the same rent. Madrid and Barcelona offer greater liquidity but lower returns. Check out our guide to investing in Valencia and our comparison of all Spanish cities.
Is Spain nearing the end of its real estate cycle in 2026?
No, according to available data. BBVA Research forecasts +10.2% in 2026 and +6.6% in 2027 (+16% over two years). Three structural drivers are fueling this growth: demographics (+500,000 net residents per year), a housing shortage (250,000 new households created versus 80,000 homes built), and GDP growth of 3%—the highest in the eurozone.
Is it possible to obtain a credit suspension clause in Spain?
Technically, yes, but in practice, sellers almost always refuse it for attractive properties. Unlike in France, where it is a matter of public policy, in Spain it is essential to secure financing before signing the preliminary agreement (arras), or risk losing the deposit—usually 10% of the purchase price. Seeking professional guidance is essential.
What is the difference between a Spanish tax resident and a non-resident?
Tax residency determines the financing terms. A Spanish tax resident can obtain up to 80% financing. A non-resident (any person residing in France, Belgium, Switzerland, or elsewhere) will only receive 70%. For tax purposes, non-residents are subject to the IRNR (Impuesto sobre la Renta de No Residentes) on their Spanish rental income.
