Second Home: Everything You Need to Know (2026)

In Spain, buying a second home—whether by the sea or in the countryside—is a dream cherished by many. It is worth noting that Spain is one of the countries with the highest number of second homes, making this dream a reality for countless homeowners. In this article, we provide clear and concise information to address any questions you may have on this topic.
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What counts as a second home?

A second home, often referred to as a “vacation home, ”is a property that is not used as a primary residence, meaning it is not occupied on a permanent basis. It is an additional property purchased after one already owns a primary residence.

This second home can be used for personal leisure, such as a vacation home, or as an investment to be rented out later. Generally, these properties are purchased with the intention of enjoying them during vacations and on weekends.

Regardless of the specific use or location, the second public housing unitis distinguished by the fact that it is separate from and in addition to a primary residence.

What are the requirements for investing in a second home?

The requirements for obtaining a reverse mortgage for a second home are stricter than those required for a primary residence. The main criteria are detailed below:

1. Owning a primary residence: It is essential to own a primary residence.
2. Banks require proof of financial stability—specifically, evidence of steady employment and a high income—in order to approve the mortgage. This mortgage has a shorter repayment term, typically ranging from 20 to 25 years.
3. Have sufficient savings: Mortgage financing covers between 60% and 70% of the home's value; therefore, you need to have extra money on hand to cover the difference.
4. No missed payments or outstanding debts: it is essential to maintain a clean credit history.
5. Complete the legal procedures involved in the sale: paying taxes and registering the property with the Land Registry—in other words, the same steps required when purchasing a first home.

Can you buy a second home with a mortgage?

The answer is YES; you can take out a new mortgage separate from your first one, or refinance your current mortgage, but keep in mind that these types of mortgages for second homes have higher interest rates and, as we mentioned earlier, shorter repayment terms.

It is important to know that banks consider a second home to be a higher-risk product, since, in the event of default, the primary residence (first home) takes priority for repayment. 

Can you rent out a second home?

Of course, renting out a second home is a viable and attractive option. Many homeowners purchase properties by the beach or in the mountains with the intention of renting them out. In fact, statistics show that 41% of second-home buyers view this purchase as a strategic investment.

A second home can be rented out year-round, providing a steady income stream, provided the owner does not plan to use it personally during that time. Alternatively, if the owner wishes to enjoy the property during certain seasons, they can choose to offer it as a vacation rental. This option allows for monthly income during periods when the home would otherwise be vacant.

Both options are effective for covering the fixed costs associated with a second home, such as property taxes and miscellaneous community fees. In addition, the return on investment can be substantial, depending on the property’s location and features

How much tax is owed on a second home?

Second homes or vacation homes are classified as real estate not used for business purposes, and their tax treatment differs from that of a primary residence; they must be reported on the annual income taxreturn at 2% of the assessed value, or 1.1% if the assessed value was revised in the previous decade.

Keep in mind that the assessed value—of both the land and the buildings—is a value that is objectively determined for each property based on data from the real estate cadastre.

In addition, owners of second homes must file and pay property tax (IBI) annually .

Benefits of a second home

Buying a second home can be a significant investment, so it’s important to weigh that against the benefits it offers. These include:

• Wealth growth: This investment diversifies your assets and increases your personal wealth. It may appreciate in value over time.
• Always having a place to stay on vacation: you no longer have to worry about finding hotels or vacation rentals.
• Saving money: Since you don't have to pay for lodging during your vacation, you avoid the cost of accommodation, which accounts for 34% of the vacation budget.
• Quality accommodations: You'll have a home furnished to suit your personal tastes and needs.‍
• Additional income: If you decide to rent out your second home, you’ll enjoy additional financial benefits. Many people use their home in the summer and rent it out for the rest of the year.

Disadvantages of a second home 

Although having a private place to spend the summer may sound very appealing, it’s also important to weigh the pros and cons. We’ll discuss the cons below:

• Paying additional taxes on personal income tax: owning an extra property also means paying more taxes, such as property tax (IBI), which is not deductible from personal income tax unless the property is rented out.
• Increased fixed expenses: You'll need to pay for utilities, common expenses, and property taxes.
• If you don't rent it out, it doesn't generate any income: having a second home that sits empty most of the year is like keeping your money under the mattress.
• Difficulty in managing a mortgage: financing is typically limited to 70%, so an initial down payment is required to cover the remainder.
• Risk of theft and squatting: It’s important to invest in an effective security system to give you peace of mind.

Tips for Buying a Second Home

Since buying a second home is a major financial decision, it’s important to carefully consider all aspects in advance and plan for the future so as not to jeopardize your financial well-being.

The first step is to assess your savings. You’ll need to have at least 20% of the home’s value saved up before applying for a mortgage. You’ll also need to have enough money to cover expenses such as electricity, water, gas, and internet.

When looking for a second home, you should check its overall condition. You may need to make costly renovations in the near future. At the same time, find out if there are any outstanding debts, such as local taxes and other expenses.

Finally, explore various mortgage options, comparing interest rates and loan terms, to find the best second-home mortgage for your needs.

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Conclusion 

Don't forget that the terms of a mortgage for a second home are more stringent. Ideally, you should have paid off your first mortgage; however, a good credit history may be sufficient.

Second homes tend to appreciate in value over time, and if they’re in a good location and in good condition, you can sell them and get a higher, immediate return.