The question we hear most from investors and second-home buyers goes something like this: where should I buy property today? Budapest, a central European capital with steady rental demand; Dubai, with higher rental yields; or the Costa del Sol, where the family would happily spend weeks every year? The short answer is that it depends on what you want the property to do for you. The longer answer is this article.
We have written detailed guides on all three markets. Here we put their figures side by side, always with the source and the year, so you can see the differences in one place. Where a number comes from one of our own worked examples, we say so.
Who each market suits
Budapest suits buyers who want a solid long-term let and capital preservation in a market that is easy to oversee in person. According to the Hungarian central bank (MNB), Budapest house prices were 8.3% higher in Q2 2026 than a year earlier. Our Budapest market page covers the city in detail.
Dubai suits investors looking for higher rental yields and a dollar-pegged currency, who accept investing from a distance in a more cyclical market. Our Dubai property page gives the overview.
The Costa del Sol suits buyers who want their own use and long-term value in euros, with EU legal certainty, and who see rental income mainly as a way to cover running costs. We introduce the region on our Costa del Sol page.
The big comparison: costs, yields, tax and financing
| Factor | Budapest | Dubai | Costa del Sol |
|---|---|---|---|
| Purchase tax or fee | 4% transfer duty | 4% DLD transfer fee, usually paid by the buyer (propertyfinder.ae, 2026) | Resale: 7% ITP; new build: 10% IVA plus AJD (Ley 5/2021; guiafiscal.es, 2026) |
| Total buying costs | approx. 5% in our Budapest worked example | approx. 6.6% for a ready JVC flat in our worked example | approx. 8.6–8.9% resale, 12.8–13.1% new build in our Estepona example |
| Annual running costs | Service charge; local tax in some districts | Service charge per sq ft (AED 15–20 in JVC, DLD 2025–2026); no annual property tax | IBI, refuse charge, community fees, non-resident tax return even if not let |
| Typical gross yield | approx. 4.5–5.5% (Global Property Guide, Q1 2026) | approx. 6.6–7.2% for apartments (E&V, Cavendish Maxwell, 2026) | Holiday letting typically covers running costs |
| Typical net yield | approx. 3–3.5% | approx. 4–4.6% in our JVC example | approx. 2.2% in our holiday-let example |
| Finance for non-residents | Hungarian banks are strict; most foreign buyers pay cash or borrow at home | typically 50–60% loan-to-value | typically 60–70% loan-to-value |
| Tax on rental income | 15% Hungarian income tax | No UAE personal income tax; home-country rules apply | 19% of net rent for EU/EEA residents, 24% for others |
| Liquidity | Deep local market, fewer transactions in 2026 | 123,416 sales Jan–Sep 2026 (DLD data) | 18,360 sales in Málaga province in H1 2025, 39% to foreign buyers |
| Currency | Hungarian forint | AED, pegged to the US dollar | Euro |
| Residency angle | Buying alone gives no residence right | Golden Visa from AED 2m property value | Free movement for EU citizens; no property route for others since April 2025 |
| Own use | Easy city breaks | Long-haul for most Europeans | Short flights from most of Europe, family holidays |
The table reflects 2026 rules and market data and is indicative only. For the detail, see our guides to the full cost of buying a flat in Budapest, the costs of buying and owning in Dubai and Costa del Sol buying costs for resale and new-build homes.
Yields up close: why the gross figure is not enough
Dubai's gross yield is the highest on paper, and it stays ahead on a net basis too, because there is no local personal income tax. In our own JVC example, a 7.2% gross yield fell to 4.6% after the service charge, management, one void month and maintenance, and to 4.0% with a more cautious rent. Our article on Dubai rental yields and letting walks through the calculation.
In Budapest the gross yield is lower and 15% income tax reduces it further. Our article on Budapest rental yields in 2026 works through a District VIII example in which, with every cost included, net yield can drop below 3%. In return, the long-term rental market is steady, and rents kept rising in 2026.
On the Costa del Sol, rental yield is the least important number. In our Estepona holiday-let example, about 2.2% net cash flow remained after costs and 19% Spanish tax, with no owner use. Here the result depends far more on the property's value: according to idealista, asking prices in Málaga province rose 6.6% in the year to September 2026.
Risks in each market
Budapest
- Regulation: short-term letting has all but closed in 2026. Our guide to Budapest Airbnb rules in 2026 covers the District VI ban and the citywide moratorium.
- Slower price growth: after a record 2025, price growth has clearly slowed and supply is expanding.
- VAT change: the 5% VAT rate on new homes rises to 27% from 2027, which may reshape new-build pricing.
Dubai
- Supply wave: according to Cushman & Wakefield, around 32,000 homes are due for handover in the second half of 2026, which may weigh on prices and rents in some communities.
- Cyclicality: in Q2 2026 average residential prices fell 4% and rents 6% compared with the previous quarter (Cushman & Wakefield).
- Project risk on off-plan purchases: delays, build quality and resale conditions. Plan your exit before you buy.
Costa del Sol
- Tourist-let rules: Málaga has suspended new licences for three years, and since April 2025 a new tourist let needs approval from three-fifths of the owners in the building. Our article on holiday letting on the Costa del Sol has the detail.
- Interest rates: 12-month Euribor averaged 2.952% in August 2026, against 2.112% a year earlier.
- Overpaying: where asking prices rose 10–17% in a year, the risk of paying next year's price today is higher.
- Annual tax admin: as a non-resident you must file a Spanish return even if you never let the property. A local gestor usually handles it.
Three investor profiles, three markets
1. The cautious investor who wants to stay close. Lives in or often visits central Europe, wants savings in an inflation-resistant asset, and would like to be able to see the property easily. A well-located Budapest flat on a long-term let is the natural first step. The rules are known and the tenant is always within reach.
2. The investor seeking yield and diversification. Already owns property at home and wants part of their wealth in a dollar-linked asset. Accepts seeing the flat once or twice a year and leaving it to a management company. A ready one- or two-bedroom flat in a liquid Dubai community with a long-term tenant fits that goal. If the purchase reaches AED 2 million, the Golden Visa is a bonus, not the reason to buy.
3. The family planning its own use. Wants a few weeks by the sea each year, perhaps whole winters later on. Rental income covers running costs but is not the main aim. The Costa del Sol fits: euros, EU legal certainty, and a home that works for the family first.
Can you combine the three markets?
Yes, and often that is the most sensible route. A common set-up: a long-let Budapest flat as the predictable base, alongside a Dubai flat for dollar-linked yield. Another: a Costa del Sol holiday home for the family, with a Budapest rental helping to cover its costs.
Combining has three advantages: currency exposure is spread across the forint, the euro and the dollar-pegged dirham; risk does not hinge on a single market's rules; and own use does not come at the expense of yield. Two things need settling first: whether each property stands on its own, and whether you keep enough reserves for a bad year in every market.
A good portfolio is not the one present in the most markets, but the one where every property has a clear role.
How to decide: a checklist
- Goal: current income, capital preservation, own use or residency? Rank them.
- Horizon: how many years, and what is the exit plan?
- Total cost: count the buying costs as well as the price; across these three markets they range from about 5% to 13%.
- Net yield: always compare figures after costs and tax, not gross. Our property investment calculators let you run the numbers yourself.
- Currency: what currency is your income in, and what will the rent and any loan be in?
- Financing: own funds, a loan at home or a local bank? For non-residents, 50–70% loan-to-value is typical.
- Regulation: treat any projection built on short-term letting with caution in all three markets.
- Tax: check with your own tax adviser what is taxed where, including in your country of residence.
- Reserves: keep money aside for an empty year, a major repair and an unfavourable exchange rate.
If you would like this comparison translated into your own situation, our investment advisory works with real properties in all three markets, with a base case and a cautious case. If you would rather talk first, get in touch with our team.
Frequently asked questions
Where is the best place to buy investment property in 2026?
It depends on your goal. For a steady, predictable long-term let, Budapest; for higher rental yield and a dollar-pegged currency, Dubai; for your own use and value held in euros, the Costa del Sol. Many investors combine two.
Is Dubai or Spanish property the better investment?
They serve different purposes. Dubai's rental yields are higher, with 2026 data putting gross apartment yields at around 6.6–7.2%, but the market is more cyclical. On the Costa del Sol, letting mainly covers running costs, and the return comes from value growth and own use.
Which market has the highest net rental yield?
In our own worked examples, Dubai, where a JVC flat came out at 4–4.6% net. Budapest net yields typically sit around 3–3.5%, and our Costa del Sol holiday-let example came out at about 2.2%.
How much are buying costs in Budapest, Dubai and Spain?
About 5% in Budapest (4% transfer duty plus legal fees), about 6.6% for a ready flat in Dubai (4% DLD fee, trustee and agent), and on the Costa del Sol about 8.6–8.9% for resale and 12.8–13.1% for new builds, based on our worked examples.
Can buying property give me residency?
In Dubai, property worth at least AED 2 million can qualify you for a Golden Visa. In Hungary, buying a flat does not by itself give a right of residence. In Spain, EU citizens can live there under free movement, while the property-based golden visa for non-EU buyers was abolished in April 2025 (Ley Orgánica 1/2025).
How is foreign rental income taxed?
In the UAE there is no personal income tax on rent; in Spain non-residents pay 19% (EU/EEA) or 24% on rental income; in Hungary long-term rent is taxed at 15%. Your country of residence may also tax it, subject to its tax treaties, so check with your own adviser.
This article is general information, not investment, legal or tax advice. Figures come from 2026 sources and from our own worked examples based on stated assumptions.
Want a second opinion on Budapest?
Bring the listings you have saved, or just your questions. In 30 minutes we show you what to check on price, condition and paperwork.
Let's talk
Urbán Réka founded Monvero. She works with buyers and investors in Budapest, Dubai and on the Costa del Sol, from setting the budget to signing. This article is for general information; for advice on your own situation, get in touch.
