Buying Real Estate in Spain: What Matthieu Stefani and Geoffroy Reiser Discussed on *La Martingale*

We were delighted to be invited by Matthieu Stefani to appear on *La Martingale*, one of the leading podcasts for French-speaking investors, to discuss real estate investment in Spain and current market opportunities.

In this episode, Geoffroy Reiser and Matthieu break down the practical steps for buying real estate in Spain if you’re based in France, Belgium, Switzerland, or elsewhere in the world. Why Spain rather than France? What rules should you be aware of, what opportunities should you seize, and what mistakes should you avoid before taking the plunge?

Listen to the episode

A booming real estate market

There is something quite rare in today’s European real estate market: a major eurozone country where prices are rising by 5 to 10 percent annually, where interest rates are one percentage point lower than those in France, and where public finances meet the Maastricht criteria, while France has a 6 percent deficit.

That country is Spain. And in this episode of *La Martingale*, Geoffroy Reiser explains it plainly to Matthieu Stefani: this isn’t about bashing France, but a factual comparison. In 2024, the Spanish economy grew by 3%, three times the French rate. The population is growing at the same pace. Construction, however, is lagging behind.

“The Spanish real estate market saw a 5% increase in prices last year, which is countercyclical. In Valencia, prices have even risen by more than 10% annually over the past two, three, or four years,” Geoffroy Reiser

This isn’t a cyclical trend. It’s a structural issue: every year, Spain adds 200,000 new households but builds fewer than 100,000 homes. The gap is widening. Spanish banking reports project a shortage of 2.7 million homes within the next 15 years.

Why Spain, and not Italy or Portugal?

That’s the question many French investors are asking themselves: Spain, Italy, Portugal—which one should they choose?

Italy faces a major structural risk: it is the European country expected to lose 10 million residents over the next 20 to 30 years, with its population potentially halving within fifty years. The real estate market depends on demand. Without residents, there are no tenants.

Lisbon, Portugal, is now identified by UBS as one of the markets at risk of a real estate bubble. A decade of influxes of expats and golden visas has sent prices soaring to the point where rental yields have fallen significantly. Berlin ten years ago, Lisbon five years ago—those waves are behind us.

Spain, for its part, checks all three boxes that matter for a long-term investment: economic growth, population growth, and a structural housing shortage. And it has an unexpected advantage: Spanish banks, having learned their lesson from the 2008 crisis, lend non-residents only 60 to 70 percent of a property’s value. This apparent obstacle actually protects the market. Unlike in France or Germany, rising interest rates do not cause Spanish prices to collapse, since the limiting factor is not the loan rate but the down payment.

Valencia: the city growing by 10% a year

When Geoffroy Reiser first looked to invest in Spain in 2018, he was living in Lausanne. His first thought, like many others, was Barcelona. Then he compared the gross returns: 4% in Barcelona, 6% to 7% in Valencia. The decision was quickly made. He bought in Valencia without ever having been there, based solely on the numbers. He went to sign the deed of sale in person and discovered a city that surprised him.

Valencia today is:

• 1 million residents within the city limits, Spain’s third-largest economic hub after Madrid and Barcelona
• An average of €3,000 per square meter, which is half the price of Madrid or Barcelona (€6,000 per square meter)
• More than 80,000 students, strong and sustained structural demand for rental housing
• One of Europe’s largest ports, a hub for logistics and technology (Amazon, Salesforce, Valencia Digital Summit)
• European Green Capital 2024, selected by the European Commission
• Price increases of more than 10% per year for the past four or five consecutive years

Geoffroy Reiser’s prediction is simple: it’s entirely possible that prices in Valencia will rise from €3,000 per square meter to €4,000 or €5,000 per square meter in the coming years. It remains significantly cheaper today than Málaga, Seville, Madrid, and Barcelona, and is a far cry from the €6,000–7,000 per square meter in San Sebastián.

“A rental investor has the money, but not necessarily 200 hours to devote to their project. Terreta Spain is here to save their weekends,” Geoffroy Reiser

What this looks like in practice: an example with figures

In the episode, Matthieu Stefani asks the question point-blank: how much does it cost, and how much does it bring in? Here’s a breakdown for a €200,000 apartment in Valence.

• Required down payment: approximately €80,000 to €100,000 (30% of the purchase price + closing costs of 12–13% + any renovation costs)
• 20-year mortgage in Spain: monthly payment of around €550–€600
• Estimated rent: between €1,200 and €1,400 per month
• Average gross yield: 6 to 7%
• Interim monthly cash flow: approximately €600 before expenses and taxes
• Expected annual appreciation: 5% to 10%

The result: an annualized total return that can exceed 10% when rental income and property appreciation are combined. If the property appreciates by 10% per year, in five years it will be worth €4,000 per square meter.

Financing a Property Purchase in Spain: The 4 Options

Buying property in Spain requires a minimum down payment of around €50,000, and closer to €70,000 to €80,000 in Valencia. That’s the real hurdle here. Spanish banks lend non-resident investors only 60 to 70% of the property’s price. Add in closing costs (12–13%) and any renovation work, and you’ll quickly find yourself needing to finance half the project with your own funds.

There are four paths:

1. Using your primary residence in France as leverage: a tip few people know about. This is undoubtedly the most powerful—and least well-known—option. If you own a debt-free property in France, or one that is largely paid off, you can use that asset as leverage to finance your purchase in Spain, without selling anything or dipping into your savings.

How it works: Your French bank (or a specialized broker) places a remote mortgage on your French property. It typically releases up to 70% of the property’s net value, which you are free to use as you wish, whether in Spain or elsewhere. For the bank, the risk is covered by an asset located in France: it doesn’t care where the money is invested.

A specific example mentioned in the episode: a debt-free apartment in Paris valued at an estimated €1 million. The bank takes a mortgage as collateral and releases €700,000. With this amount, the investor can purchase one or more properties in Spain under French financing terms—interest rates, loan terms—without any restrictions related to non-resident status in Spain. It is exactly the same mechanism used to finance a second home in France, applied to a cross-border purchase.

This option is also available even if your property isn’t fully paid off. For a €1 million apartment with half the balance still outstanding, you can still access 70% of the €500,000 in equity—that is, €350,000 available to invest in Spain.

2. A solid investment + a Spanish bank. Terreta Spain works in particular with the only Spanish financial institution dedicated exclusively to foreign buyers, one that can easily interpret a French tax return and is accustomed to this type of investor.

3. A combination of a French loan and a Spanish mortgage. This is possible in certain financial situations to optimize financing terms on both sides.

4. A Spanish mortgage supplemented by a French personal loan. For those whose borrowing capacity allows it: finance the remaining costs—renovations, furnishings, and purchase expenses—with a 5- to 7-year personal loan, which can be paid off quickly using the rental income. Borrowing €50,000 at 5% over 5 years costs approximately €10,000 in total interest. In the vast majority of cases, not buying and waiting 5 years costs much more.

Spanish Taxation: An Often Underestimated Advantage

The comparison between France and Spain on taxation is striking.

Property tax: For a 90-square-meter apartment in Valence, expect to pay around €150 per year. For a similar-sized apartment in downtown Lyon, the cost is around €600.

Taxation of rental income: A French tax resident who invests in Spain is taxed at 19% on their net rental income. In France, once the LMNP tax benefits have been exhausted, the tax rate can easily reach 40–47%, depending on the marginal tax bracket.

Capital gains on resale: the tax rate is only 19% in Spain, compared to 36.2% in France (with the exception of the primary residence). On a capital gain of €100,000, the difference amounts to approximately €17,000. The Franco-Spanish double taxation treaty prevents any additional taxation in France on amounts already paid in Spain.

Valencia or somewhere else? Other cities to watch

Gandía: Population of 80,000, located one hour south of Valencia, and regularly ranked as Spain’s most profitable city. Prices range from around €1,200 to €1,300 per square meter, sometimes lower. An ideal market for a first investment with a modest budget (€120,000–€130,000 all-inclusive). Note: Before 2008, prices in Gandía were €2,000 per square meter. They have risen steadily since then. The upward trend is not over yet.

Sagunto: a historic city located an hour north of Valencia, currently undergoing a major economic transformation. The construction of a Volkswagen battery gigafactory and massive investments by Mercadona are set to create 40,000 jobs in a city of 70,000 residents. The city government itself is calling on investors to step in: there isn’t enough housing to accommodate these new arrivals.

Madrid: a must-see, a safe bet, rich in heritage. But at €5,000–6,000 per square meter for a 4% gross return. Best suited for investors seeking stability rather than high returns, and be warned: properties in Madrid that offer a return are often located in undesirable neighborhoods or rely on illegal Airbnb rentals.

Málaga: vibrant and high-quality, but already expensive. A two-bedroom apartment often costs more than €200,000, yet offers lower returns than Valencia.

What You Should Definitely Avoid: The Airbnb Trap

That is Geoffroy Reiser’s key warning in this episode: never base your financial model solely on Airbnb.

Barcelona has just revoked all short-term rental licenses effective by the end of 2026. Madrid is also tightening its licensing requirements. Against the backdrop of a widespread housing crisis in Spain, political pressure on short-term rentals is only increasing.

A sound investment must be profitable whether rented out long-term or as a shared apartment. If profitability depends solely on Airbnb, the investment is vulnerable. The government can change the rules overnight—and it does.

Invest with people who invest themselves

This might be the most practical piece of advice in the entire episode: choose a mentor who has money on the table themselves.

At Terreta Spain, every member of the team is a personal real estate investor. Geoffroy Reiser himself owns three apartments in Valencia. His partner, Antoine Évêque—an engineer who graduated from ESTP and ENSAM—oversaw the construction of entire buildings in Madrid before joining Terreta Spain. This isn’t a marketing ploy; it’s a matter of aligned interests: someone who has invested knows what a leak is, what a co-ownership dispute is, and what an unexpected expense (derrama, in Spanish) is. He advises others as he would advise himself.

This is also the key lesson learned from the Masteos experience: a hyper-growth business model with 500 employees and 250 sales per month can collapse suddenly when interest rates rise. A profitable small business, backed by a team of investors, is far better equipped to weather economic cycles.

Geoffroy Reiser's Personal Martingale Strategy

Matthieu Stefani asks him this question at the end of the episode. The answer: a high-end student apartment in Valence, with exclusively foreign tenants—Swiss, Swedish, and German. Eleven rooms spread across three apartments, at €700 per room when the market rate is €500. A 100% occupancy rate since the beginning, with occasional use of Airbnb (minimum 20 nights, legal in Spain) for the rare off-peak periods.

On the stock market: The S&P 500, in the long term, is a no-brainer—even after the recent turbulence.

FAQ: Investing in Real Estate in Spain

Do you need a large down payment to buy a home in Spain?

Yes. Spanish banks only finance 60% to 70% of the purchase price for non-resident investors. When you add in closing costs (12–13%) and any renovation expenses, you’ll need a down payment of at least €50,000—and more likely €70,000 to €80,000 for a purchase in Valencia.

Can you take out a loan in France to buy property in Spain?

Yes, and this is often the best option for those who already own real estate in France. Here’s how it works: your French bank places an off-site mortgage on your French property (whether it’s your primary residence or a rental investment that is debt-free or nearly paid off) and releases up to 70% of its net value. You borrow in France, under French terms, and invest freely in Spain. The bank is only concerned with the quality of the collateral located in France.

What kind of returns can we expect in Valencia?

An average gross yield of 6% to 7%, with projections of a 5% to 10% annual increase in value over the next few years. An apartment priced at €200,000 rents for between €1,200 and €1,400 per month.

Why Valencia rather than Madrid or Barcelona?

Prices per square meter in Valencia are half those in Madrid or Barcelona, while rental yields are 50% higher. The city has also seen price increases of more than 10% per year for several consecutive years.

Is investing in Airbnb a viable option in Spain?

Less and less, and to a highly variable degree depending on the city. Barcelona has eliminated its tourist licenses. It is strongly discouraged to base a financial plan solely on short-term rentals.

What tax rules apply to a French citizen who invests in Spain?

Rental income is taxed at 19% in Spain. Capital gains on resale are also taxed at 19%, compared to 36.2% in France. The double taxation treaty prevents any additional taxation in France on amounts already paid in Spain.

Why Spain rather than Italy or Portugal?

Italy is expected to lose 10 million residents over the next 30 years, a demographic trend that is unfavorable for long-term rental investments. Portugal, and Lisbon in particular, has been identified by UBS as a market at risk of a bubble. Spain, on the other hand, combines economic growth, population growth, and a structural housing shortage.