Despite being a favourite among foreign buyers, Spain ranks among the least attractive European destinations for property investment in 2025, according to new research by expat specialists William Russell.
The country saw 93,000 homes purchased by foreign nationals out of 637,000 total property transactions in 2024 — meaning around one in seven homes sold went to an overseas buyer. However, the latest analysis suggests Spain may not offer the best returns for investors this year, placing it among the bottom five in Europe based on key metrics including rental yield, property taxes, and transaction costs.
So where in Europe should property investors be looking in 2025?
The research highlights Central and Eastern Europe as offering the strongest opportunities, with Moldova emerging as the top-ranked location. The country delivers average gross rental yields of 8.38%, combined with low income tax on rental earnings (12%) and minimal buying costs — just 2.8% of the purchase price. Moldova’s capital, Chișinău, is increasingly seen as an emerging hotspot, thanks to ongoing investment in infrastructure, hospitality, and tourism, particularly its wine and cultural heritage industries, which are bolstering short-term rental potential.
Lithuania, North Macedonia, Andorra, and Montenegro round out the top five, all offering attractive yields, relatively low taxation, and increasing international investor interest.
Commenting on the findings, a William Russell spokesperson said: “Buying property abroad as an expat can seem daunting, but with the right preparation, it’s a very achievable goal. Our research shows that the best opportunities for returns are often where fewer people are looking.”
While Moldova leads the rankings, the report notes that it is not yet a member of the EU, although it holds candidate status, making it a higher-risk, higher-reward option for more adventurous investors.
In contrast, Spain, despite its enduring popularity and lifestyle appeal, suffers from relatively modest rental yields, high transaction costs, and a less favourable tax regime, which drags down its investment attractiveness.
For buyers still keen on Spain or similar mature markets, William Russell advises a more cautious and well-informed approach. Their top tips for navigating the overseas buying process as a British expat include:
Working with local experts is essential — particularly those who understand the unique needs of expats and can help navigate language and legal barriers. Buyers should seek out estate agents and lawyers with a track record of working with British clients, and ensure that legal professionals are properly accredited, whether locally or via the UK Law Society.
Monitoring exchange rates can also make a significant difference to overall costs. International transfers can incur fees and poor conversion rates, so the firm recommends working with a foreign exchange specialist and planning any financing well in advance.
Lastly, organising financial documents early is key. Mortgage applications abroad often require expats to provide a wide range of paperwork, including proof of income, credit history, tax returns, and sometimes even private health insurance. Translation and legal verification may be required, so early preparation is strongly advised.
With rising interest in cross-border property investment driven by lifestyle changes, rising rents, and the long-term appeal of bricks and mortar, these insights are likely to prove valuable for anyone eyeing a move — or a rental income — abroad.
As 2025 unfolds, the message from the data is clear: value and opportunity lie beyond the obvious. While Spain remains a beloved destination, savvy investors may want to cast their net wider, looking to lesser-known — but potentially more profitable — corners of Europe.
