Retiring in Spain: The Complete Guide

Retiring in Spain

Warm weather, a relaxed lifestyle, excellent cuisine, and a welcoming culture. These are just a few of the things that Spain offers to expats. Around 6 million foreigners choose to call Spain home. That’s one in eight of the 48 million population living there. Spain also has a high standard of living, excellent healthcare, and a competitive education system.

Retirement in Spain also tends to be fairly low cost. You can retire comfortably on about $2,000-2,200 a month, about $25,000-27,000 a year. Naturally, if you choose to live a bit further away from the big cities, you can retire on approximately $1,700-1,900 a month, which is about $20,000-22,000 annually.

This guide will provide you with all the information you need to know about how to retire in Spain. Including an exploration of the cost of living, the legal steps of living in Spain, taxes, the best places to retire, and much more.

Who can Retire in Spain: Visas and Residence Permits

EU Citizens

Spain has been in the European Union since 1985 and in the Schengen area since 1995. This means that it’s very easy for EU citizens to retire in the country. As an EU citizen, you don’t need any visas or a residence permit to live, work, retire, or study there.

Non-EU Citizens

There are two types of visas that non-EU citizens can acquire: a Long-stay visa (visado nacionale) and a Residence Visa (visado residencia)

Long-Stay Visa (visado nacionale)

The long-stay visa grants you temporary residence in the country. It also allows expats to work, study, retire or live in Spain. The long-stay visa is indefinite and renewable annually. In order to renew this visa, you’ll need to spend at least six months per year in Spain.

Residence Visa (visado residencia)

This is the most common visa for foreigners who want to retire in Spain. It is easier to obtain  than a long-stay visa. It allows you to reside or retire in the country without being able to work there.

Visa requirements

The requirements for a visa in Spain depend on what type of visa you’re applying for. You will have to first prove that you can support yourself in Spain without working. Generally speaking, you will need to provide proof of a monthly income of at least €2,130. Additionally, you will need to show that you make an extra €532.51 monthly for each dependent. Alternatively, you can show €27,600 of savings for each renewal period (12 months.)

Required documents for the visa

You should always check with your local consulate for a list of requirements and documents. Generally, the documents you’ll need are as follows:

  • Passport valid for at least one year
  • Proof of financial means. Depending on the type of visa you are applying for, this could be your bank statements, affidavit of support, scholarship, etc.
  • Police Record that shows you have not committed any crime in the past
  • Medical insurance provided by an insurance company in Spain
  • Original medical certificate issued by a doctor, verifying you do not have any contagious diseases and that you are free of drug addictions and mental illness

Another common way for non-EU residents to obtain a residence permit in Spain is through the Spain Golden Visa.

The Spain Golden Visa

The Spain Golden Visa is a residency by investment scheme which grants the investor permanent residency in Spain. This may also eventually lead to citizenship.

Benefits of the Golden visa

  • High Mobility: The Golden Visa Spain allows you to travel visa-free through the Schengen zone
  • Family Inclusion: Your spouse and children under 18 can be included in the Golden Visa.
  • Children over 18 who are fully dependent on you can also be included. For example, full-time students
  • No Minimum Stay Requirement: Unlike other types of visas in Spain, you only need to spend one day per year there to maintain the Golden Visa
  • Path to Citizenship: The Golden Visa can lead to citizenship in Spain if you reside there for six months a year for ten years

Qualification for The Golden Visa Spain

In order to qualify for a Golden Visa in Spain, you need to make one of the following investments:

  • Make a €1,000,000 capital transfer to Spain
  • Make a €1,000,000 investment in business development
  • Make a €500,000 investment in real estate

Read our Spain Golden Visa Guide for more information.

Taxes in Spain

If you live in Spain for 183 days (six months) of any calendar year, you become a tax resident there. Since you generally need to live six months there to maintain your visa, it is a smart idea to learn about the taxes there.

Spanish residents need to submit a tax return and pay income tax. You are eligible to pay Spanish income tax on your worldwide income under the following conditions:

  • If you have an annual income from employment that is more than €22,000
  • If you’re self-employed in Spain or own a business there
  • If you receive rental income that is more than €1,000 a year
  • If you have capital gains and savings income that is more than €1,600 a year

Remember that you need to declare your assets abroad that are worth more than €50,000.

Spanish Tax Deductions and Allowances

There are certain tax deductions for taxpayers in Spain. The personal allowance for those under 65 years of age is €5,550. If you’re 65 to 75 years of age, it’s €6,700. It’s €8,100 for anyone over 75 years of age.

You can also claim an additional allowance if you have children under 25 years of age who live with you. You can claim an allowance of:

  • €2,400 for the first child
  • €2,700 for the second
  • €4,000 for the third
  • €4,500 for the fourth
  • An additional allowance of €2,800 for each child under three years.

Wealth Tax

There is a 0.2-2.5% wealth tax if your net assets are worth more than €700,000. In addition to the €700,000 tax-free allowance, homeowners have an allowance of €300,000 against the value of their main home.

Inheritance and Gift Tax

There is usually very little inheritance or gift tax in Spain. This goes from 1-7%. Keep in mind that some regions, such as Andalucia, updated their inheritance and gift tax in 2017. You might be exempt from inheritance tax altogether. You need to check your specific region’s laws for more information.

When dealing with Spanish taxes, we recommend that you seek professional help as they can get complicated. You can always Contact Us with any questions you have.

Cost of living in Spain

As we’ve mentioned above, Spain tends to be less expensive than other European countries. You can live comfortably in Spain on about $2,000-2,200 a month somewhere in a big city. If you live somewhere outside the big cities, you can retire on approximately $1,700-1,900 a month. So depending on your personal finance and income, you can select where you want to stay.

Rental Prices

As with everywhere else in the world, rental prices can vary dramatically depending on location. In Madrid, for example, you’ll need around $925 per month for a one-bedroom apartment. For a three-bedroom apartment, you’ll need about $1,800 a month.

Move a few miles outside the city center, and you can find a one-bedroom apartment for $680 a month. For a three-bedroom apartment, you’ll need about $1,200 a month.

However, if you go somewhere far from the major cities, you can get much more bang for your buck. For example, in Valencia, a one-bedroom apartment in the city center will cost a meager $650 per month. Step outside of the city center in Valencia, and you can find a one-bedroom apartment for as low as $450 a month.

Property Prices

Some expats retiring to Spain may prefer to buy a second home there. The average house prices for Spain depend on where you buy. For example, for somewhere like Madrid or Barcelona, you should be prepared to put down €3000-5000 per m². On the other hand, you can find some cheaper properties a bit further away from the big cities. In the Costa del Sol, you can find houses starting as low as €2,050 per m². Below you’ll find a table with the average real estate prices of various cities in Spain:

 

 

CityLocationAverage price per m²
AlicanteIn the city center2,560
Outside of the city center1,876
BilbaoIn the city center4,678
Outside of the city center3,028
BarcelonaIn the city center4,519
Outside of the city center2,980
MadridIn the city center4,929
Outside of the city center2,993
MalagaIn the city center3,271
Outside of the city center2,066
San SebastianIn the city center5,800
Outside of the city center3,675
ValenciaIn the city center2,784
Outside of the city center1,483

 

Food and Groceries

Food and groceries in Spain tend to be very affordable. On average, you should budget about €200-300 monthly for groceries, depending on your needs. Below you’ll find a table depicting the prices of various items according to Numbeo:

 

GroceriesPrice
Apple (one KG)€1.74
Banana (one kg)€1.62
Chicken (one kg)€6.03
A dozen eggs€1.82
A loaf of bread (500 g)€1.01
Local Cheese (one kg)€9.64
Milk (one liter)€0.79
Onions (one kg)€1.61
Potatoes (one kg)€1.11
Rice (one kg)€0.99
Water bottle (1.5 liters)€0.62

Additionally, Spain produces some lovely wines. You can get a decent bottle of wine for about €5, and you can find domestic beer for as low as €0.8!

Eating Out

If you enjoy going out for dinner every now and then, Spain has some excellent restaurants and delicious cuisine. Here is a table depicting the average prices of eating out:

 

Meal/ItemPrice
Meal at an inexpensive restaurant€1.74
Meal for two at a mid-range restaurant€1.62
Meal at a fast-food chain€6.03

Utilities

Utilities in Spain are fairly cheap. Expect to pay about €118 monthly for an 85m² apartment. This includes electricity, heating, water, etc. Of course, this number changes depending on your usage, the size of your house, and the season.

As for the internet, then you should be prepared to pay around €40 monthly for 60Mbps Cable/ADSL.

Transportation

Spain has excellent public transportation. You can find metro lines in Madrid, Barcelona, Bilbao, and Valencia. These networks connect the city center to various neighborhoods and municipalities.

There are also a massive amount of local and intercity buses. This means that you will never have a problem reaching anywhere. A one-way ticket on a bus or the metro should cost you €1.50. If you go for a monthly pass, you will pay €35-45 on average.

Finally, taxis in Spain are comparatively cheap as well. The fares start at €3.50 and increase by €1.10 per Km.

Owning A Car

Owning a car in a big city like Madrid or Barcelona might not be necessary. As a matter of fact, finding parking can be quite challenging in those cities. However, if you decide to live somewhere in the suburbs or somewhere rural, you might want to have a car at your disposal.

There are a few requirements that every driver should comply with. Each driver is required to have the following in their car:

  • Two warning triangles
  • Complete set of spare bulbs
  • Fuses
  • A spare wheel and the tools to replace them
  • Hi-Visibility jacket
  • A spare pair of glasses or contact lenses (if the driver needs them)
  • License and car insurance

If the police stop you and you don’t have any of the above items, you might be subject to pay a €500 fine.

Keep in mind that gas is not that expensive. It costs only €1.30 per liter, that’s about €4.60 per gallon.

Healthcare in Spain for Retirees

Spain has a very high-quality healthcare system. It usually guarantees universal coverage for all residents. The healthcare system consists of private and public healthcare. There are some hospitals and health centers there that offer both private and public healthcare.

Moreover, Spain ranks 19th on the Euro Consumer Health Index. The system is overseen by the Spanish Ministry of Health. The Ministry develops policy and oversees the national health budget.

Public Healthcare

Public healthcare in Spain usually covers citizens and residents who contribute to social security. Keep in mind that if you live on one of the Spanish islands, you might need to travel a bit to find a state hospital. There are a few conditions under which you can qualify for public healthcare as an expat, such as:

  • If you are an employed or self-employed resident who pays social security contributions
  • If you are a resident in the country who receives state benefits
  • If you are recently divorced or separated from a partner registered with social security
  • If you are a child resident in the country
  • If you are over 65 years of age and a legal resident in the country
  • If you are under 26 years of age and studying in the country
  • If you are a state pensioner
  • If you are an EU citizen staying temporarily in the country and have an EHIC card

If you don’t have the right to public healthcare, you might need to have private health insurance.

Private Healthcare

Private healthcare in Spain is quite common among expats. Many expats choose to cover themselves to have access to broader and quicker treatment.

Luckily private healthcare insurance in the country is very affordable and can cost between €50-200 a month.

Pharmacies

Pharmacies are known as farmacia. They are easily identified by the green cross sign outside. Pharmacies in Spain usually open Monday- Friday 9.30 am-2 pm and 5 pm-9.30 pm. They also open Saturdays from 9.30 am-2 pm. If you’re in urgent need of medicine, you can find the details of a 24-hour pharmacy on the windows or doors of other pharmacies.

Banking in Spain

Spain has a massive number of banks, about 141. There are private and state banks, as well as a number of regional cooperative and savings banks. Spain’s national bank is called Banco de España. This state bank is the regulator of the banking sector.

If you plan to retire in Spain, it’s advisable that you open a bank account there. Otherwise, you’ll be dealing with credit card charges and exchange rates. Having an account there will make your day-to-day life there easier. Activities such as paying bills and so on can be quite costly and could drain your income through international banking.

The first step in opening a bank account in Spain is acquiring an NIE number.

Número de Identificación de Extranjero (NIE)

The NIE number is the number that the government assigns to foreign residents. It’s important for opening a bank account, establishing bills in your name, filing taxes, and so on.

Acquiring a NIE number is pretty easy. First, you should head to a government bank and pay the NIE fee, which is around €11. Then you need to go to the nearest police station and provide them with the following documents:

  • The NIE application form (obtainable at the police station)
  • Original passport valid for at least one year
  • Photocopy of passport
  • Two passport-sized colored photos

Keep in mind that depending on where you live, you may not find English-speaking officials at the police station.

Opening a Bank Account

After you’ve obtained your NIE number, you can go to the bank of your choice and request an account. Banks in Spain are usually open Monday to Saturday from 9 am- 2 pm. Be warned, many of them may not have English-speaking staff. If this is a problem, you can always call the bank to book an appointment with an English-speaking employee. Alternatively, you can grab a friend with you to help you with the exchange.

Documents Required to Open an Account

It’s always a smart idea to consult your bank on any documents they require. However, you typically must provide the following documents:

  • Proof of identity
  • Spanish foreigner identification number NIE
  • Proof of address (a utility bill with your name on it should work)
  • Proof of employment status

You should translate all your documents into Spanish using a sworn translator. Typically your account should be open within one to five business days. You’ll get your cards and documentation via mail within a few weeks.

Banks in Spain

There are a multitude of Spanish and international banks in the country which provide services to expats. Some Spanish banks are:

  • BBVA
  • Banco Sabadell
  • Santander

If you prefer to work with an international bank, then you might want to check out:

  • Barclays
  • Citibank
  • Deutsche Bank
  • HSBC
  • ING

Best Places for Retirement in Spain

Spain offers a large number of options depending on your preferences and personal finance. You can head to Madrid if you’re a fan of metropolitan life or down to Alicante for that classic Spanish coastal town feel. Let’s take a deep dive into some of the best places for retirement in Spain.

Madrid

The Spanish capital is where tradition, culture, and history come to mix. There, you can find seafood from Galicia, Cider from the Asturian Highlands, Flamenco music from the south, and much more.

The city is filled with fantastic gardens and parks. Additionally, you can get around it easily with the excellent metro system. You can visit Retiro Park for a day of wandering around in the clean air, enjoying nature and people watching. You can also find lots of pubs which are super affordable.

Moreover, as it is the capital, there is a large community of expats living there. Most of them are young professionals hoping to join the work-force. However, there’s also a decent amount of retirees there, especially from the UK. Another perk to Madrid is that you’ll often find locals there who speak English.

Alicante

Alicante is a relatively small town on Spain’s eastern Mediterranean coast. It consists of only 334,000 people. Life in this charming town is perfect for retirement. However, its small size doesn’t stop it from being fully serviced. There’s even an international airport there.

It’s one of the country’s most attractive tourist destinations. The warm weather means you can stroll on the beach at any time of the year. Even in winter, you won’t need more than a light jacket, and the sun shines most days. This means that you have more free days to plan your social life.

Just a couple of meters from the beach, you can find Alicante’s old town historic center. It consists of stone-cobbled streets and cream-colored buildings. You can find many cafes, restaurants and charming hotels there.

There’s a fantastic local central market, which is open daily, where you can find fresh food at fantastic prices.

Valencia

Valencia hits the right balance between metropolis and beach town. It’s very well-serviced with plenty of hospitals, universities, and parks. Even with a population of about 800,00, Valencia somehow managed to keep that old-world charm feel to it.

You can walk around the city enjoying street music almost all year round. But, don’t think for a second that it is not drenched in culture. There are many science and art museums, concert halls, and one of Europe’s largest historic centers.

Malaga

Malaga is lean, clean, and green. One of the best places in Malaga is its pedestrian-only city center. The Spanish government has put a lot into this charming town. It is brimming with great dining, plenty of shopping malls, and some excellent dining. Additionally, it’s close to the world-famous Sierra Nevada mountain range.

The daily sunshine and miles of seaside really make being in this town worth it. It’s a cheerful and vibrant town with a relaxed lifestyle. Even on the hot summer days, the breeze from the Mediterranean gives the city a magical feel.

Barcelona

You really can’t mention cities in Spain without talking about Barcelona. Barcelona is the second-largest and most famous Spanish city. The culture, creativity, and sheer range of color in the city will grab your heart straight away. You will be amazed by Gaudi’s excellent architecture, the maze of the Medieval Barri Gotic, and the Ramblas.

It’s difficult to think of something that Barcelona doesn’t offer. Ballet, beaches, nightlife, Mediterranean sunshine, cheap eats, fine dining, museums, and the list goes on.

What really sets Barcelona apart, though, is Placa de Catalunya. It separates old Barcelona from the late 19th-century architecture. Around this square, you will find flower stalls and street entertainers. Those are on the way to the world-famous Columbus monument.

Bilbao

Bilbao is one of those towns which has been transformed from a gritty town into the pride of urban renewal. This industrial port city is located on the country’s green north coast. It has unbelievably modern architecture and is filled with culture and history.

It is split by an estuary, and both sides are linked with fantastic pedestrian bridges. If you’re a fan of cycling, this city is great for it. Many locals skate, cycle, or stroll along this promenade.

The Pros and Cons of Retiring to Spain

There is no such thing as perfect, unfortunately. Spain is a fantastic country in general, yet everything has its ups and downs. Here are a few pros and cons of retirement in Spain:

Pros

  • Friendly locals and a welcoming culture
  • Fantastic cuisine which is renowned for its variety and deliciousness
  • Warm year-round weather and excellent beaches
  • The cost of living in the country is low compared to other European countries
  • Life in Spain is slow and breezy
  • High standards of living, education, and healthcare

Cons

  • Complicated bureaucratic system
  • The main language is Spanish, not English
  • Tax laws don’t necessarily favor expats
  • Having to reside at least six months a year to maintain residence requirements

Summary

Spain is a fantastically well-developed country with an excellent standard of living. The cost of living there is very low compared to other European countries. A couple can live comfortably in the city center at about $2000 monthly. The friendly locals and breezy lifestyle are excellent for retirement, so you can spend your golden years in peace.

So if you’re thinking of somewhere nice and sunny for your retirement, then you might want to live in Spain.

FAQ

Can a US Citizen Retire in Spain?

Yes, Americans can retire in Spain. Technically, you can enter the country and stay there for 90 days with an American passport. However, if you wish to spend more than 90 days there, you must get a visa. The best visa option for that is a Residence Visa without the right to work. If you can support yourself, this is the easiest visa to obtain.

Where Do Most Expats Live in Spain?

Most expats live in Madrid and Barcelona. Other areas that are popular with expats are Marbella, the Costa Del Sol, and Alhaurín El Grande.

How Much Income Do I Need to Retire in Spain?

The cost of living in Spain is low. It’s entirely possible to retire comfortably in Spain on around $25,000 a year. Depending on where you live and your lifestyle, this can go down to $20,000 a year.

Which Part of Spain Has the Best Climate?

The Canary Islands have the best year-round climate. They have warm winters and temperate summers with temperatures of between 20 to 27C (68 to 81F).

How Are Pensions Taxed in Spain?

Pensions in Spain are taxed as general income. So they are taxed at a progressive rate.

Do You Get Permanent Residency If You Buy Property in Spain?

If you buy a property that is worth €500,000 or more, you become eligible for the Spain Golden Visa. The Golden Visa grants you residency in Spain in addition to visa-free access to the Schengen area.

Can I Move My Pensions to Spain Once I Get Residency There?

That depends on where your original pensions are. To get a definite answer, you may want to ask your local Spanish embassy.

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