Cheap Spanish Homes and Tax Breaks Tempt Growing Number of Portuguese Buyers

The Spanish property market has rarely looked so inviting to Portuguese buyers. In just six months, residents on this side of the border signed more than one thousand deeds across the frontier, a jump of almost one quarter that places Portugal among the fastest-growing foreign segments in Spain. Prices that undercut Lisbon by half and Porto by a third, easier access to remote-work visas and the familiarity of Iberian culture are reshaping where and how many Portuguese families decide to invest.

Why Spain looks cheaper from this side of the border

When the latest Spanish General Council of Notaries figures landed, one number leapt off the page for anyone living in Portugal: 2 195 €/m². That is the average amount Portuguese citizens paid for a home in Spain between January and June of this year. Compare that with the 5 700 €/m² threshold now common in central Lisbon or the 3 750 €/m² needed to secure a flat in downtown Porto, and the financial logic speaks for itself. Even the ever-popular Algarve, where averages are orbiting 3 800 €/m², no longer holds the same numerical allure. Add to that the rise of remote work, which frees many professionals from commuting to Portuguese urban hubs, and Spain’s comparative affordability becomes hard to ignore.

Where Portuguese wallets are heading

Not every Spanish province benefits equally from this new appetite. Extremadura has turned into the symbolic front door, partly because it hugs the Alentejo border and partly because prices there mirror inland Portugal fifteen years ago. In some municipalities, nearly half of all foreign non-resident transactions now carry Portuguese tax numbers. Further north, Galicia absorbs a double current: cultural kinship and shorter driving times to Porto. Together these two regions account for a majority of Portuguese deals, although smaller flows are beginning to reach the sun-drenched coasts of Andalusia and the Comunidad Valenciana as investors chase holiday-rental returns.

Euros per square metre: a reality check

The headline gap in prices tells only half the story. Among the seven nationalities that set records this year, Portuguese buyers still fall beneath the overall foreign average of 2 417 €/m². Americans, for instance, are paying a premium that exceeds 3 400 €/m², while Dutch and Italian purchasers sit closer to 2 570 €/m². Only Ukrainian, Colombian and Moroccan buyers pay less than Portugal’s cohort. Yet the purchasing power of Portuguese households stretches further because mortgage costs remain broadly in line with those at home, and Spanish capital-gains rules on a first residence can be more forgiving when the seller reinvests in primary housing.

Life after the Golden Visa: new rules of the game

One element that no longer drives demand is the Golden Visa, abolished in April. That closure has barely dented Portuguese interest because EU citizens never relied on it to secure residency. Instead, attention has shifted to the Digital Nomad Visa backed by the so-called Beckham Law, fixing income tax at 24 % for newcomers during a six-year window. For Portuguese professionals who bill foreign clients or hold remote contracts, the scheme is straightforward: prove annual earnings above roughly 31 700 €, show private health insurance and demonstrate either five years of experience or a recognised degree. Crucially, the countdown to Spanish nationality runs faster for Portuguese citizens, eligible after just two years of continuous legal stay.

What next: 2026 and beyond

Madrid’s coalition has promised a tougher stance on speculative property, from higher levies on short-term rentals to quicker evictions of illegal occupants. None of these measures targets EU buyers directly, yet they hint at a policy cycle designed to prioritise affordable housing. Investors from Portugal therefore face a mixed outlook: rent caps linked to a new index could squeeze yields in big cities, but tax exemptions of up to 100 % on rental income for long-term affordable leases open fresh avenues. Meanwhile, Lisbon’s draft Budget for 2026 raises the IMT-Jovem threshold by 2 % and cuts land-lord taxation to 10 % on moderate rents, steps that might temper outbound capital. For the moment, however, the arithmetic remains clear: a T2 in Cáceres often costs less than a studio in Benfica. As long as that equation holds, Iberia’s western buyers are likely to keep scanning eastern estate agents’ windows before signing on the dotted line.