Spain has long been a favorite retirement destination, and for good reason. It has a mild Mediterranean climate, and its universal health care system — Sistema Nacional de Salud — can be particularly attractive to seniors.
If you’re considering making this country your home in retirement, here are the basics you’ll need to know.
Reasons to Retire in Spain
For retirees looking for a country where their U.S. dollars will go far, Spain delivers. According to 2024 data from Expatistan, the estimated monthly costs for a single person living in Spain are 1,761 euros ($1,912.75 U.S. dollars), making it the third cheapest country in Western Europe.
Spain’s diverse regions cater to a wide range of retirement lifestyles. The large expat retirement communities that dot the Mediterranean coast and inland areas are ideal choices for those who want to settle among other international seniors. Between the sea and the Sierra Nevada Mountains, in the province of Granada, Costa Tropical is one of many compelling spots favored by retirees. It offers stunning beaches for strolling and exciting activities such as scuba diving and hiking.
Retirees who prefer urban living will find it in Madrid, the country’s sophisticated capital and home to one of the world’s most incredible museums, the Prado. Cities such as Barcelona, Valencia and Seville are smaller but no less vibrant.
Spain’s lifestyle and culture is also a draw for seniors. The country is known for its unique celebrations, including Pamplona’s Running of the Bulls and La Tomatina in Buñol, where attendees pelt each other with tomatoes.
Learn the Language
Unless you plan to never stray from expat communities and tourist areas, you’ll need to learn at least the fundamentals of the language before you go. A 2023 report from Education First ranked Spain 35th in the world for English proficiency, tied with Italy and Moldova.
Castilian Spanish is spoken by the majority of Spaniards, however some autonomous communities have their own official language. For example, Catalan is spoken in Catalonia, Galician in Galicia, and Basque in the Basque Country and part of Navarre.
[READ: The Best Places to Retire Overseas Where English Is Spoken]
Know the Visa Requirements
As a regular U.S. tourist, you can visit Spain for 90 days without any special visa. You will need a long-stay visa when you stay over three months. The most common visa types for retirees are:
— Nonworking (non-lucrative) residence visa. You’ll need to prove that you can financially support yourself with savings, a pension or an income-generating investment. To apply, you must show that you have an annual income of at least 28,800 euros ($31,000).
— Investor (golden) visa. If you invest a large amount of money in Spain’s economy, you may be eligible for an investor visa, also referred to as a golden visa. To get one, you’ll need to either invest 500,000 euros ($543,015) in a property, 1 million euros ($1,086,030) in company shares or bank deposits or 2 million euros ($2,172,060) in Treasury bonds.
You will also need a Foreigner Identity Number, or Número de Identidad de Extranjero in Spanish, commonly known as an NIE. You can get an NIE from the Spanish embassy in the U.S., the Foreigners Office, or a police station in Spain.
[READ: 8 Ways to Make Extra Income in Retirement]
Know How to Rent or Buy a Home in Spain
For 2024, the average monthly rent for a 900-square-foot furnished accommodation in Spain is 971 euros ($1,061), according to data from Expatistan. Typical rental contracts begin at six months but can be much longer, and security deposits usually cover one to two months’ rent. You typically need to provide the landlord with your NIE, proof of income and a Spanish bank account from which you will transfer the rent.
For retirees who would rather buy property in Spain, a NIE is also required. Properties can be purchased with cash or with a mortgage from a Spanish bank. The borrowing process is straightforward, and you may request preapproval from a bank before you’ve found the property you want. Buyers are typically expected to provide a down payment of 20% for primary residences. Just be aware that taxes and fees in Spain may be high, depending on where and what you buy. Brand new homes are subject to a value-added tax — or IVA in Spanish — which, in 2024, is 10% of the purchase price, according to Spanish real estate site Idealista.
[See: The Cheapest Places to Retire Abroad on $1K Per Month]
Understand Taxes in Spain
Spain’s tax system is complex and differs from one autonomous region to another. That can be frustrating when it comes to understanding your tax obligations.
The general rule is that you’re considered a tax resident if you spend more than 183 days in Spain during the calendar year. You may also qualify as a tax resident if your main professional activity is based in Spain or if your spouse or dependent children are living in Spain.
The personal income tax in Spain is progressive, and the rates are currently between 19% and 47%, according to data from PwC. If you are from the United States and earn income without obtaining a permanent establishment, the rates are:
— General rate: 24%
— Capital gains generated from transfers of assets: 19%
— Interest: 19%
— Dividends: 19%
— Royalties: 24%
— Pensions are taxed at progressive rates: between 8% and 40%
Spain also has a wealth tax that is imposed annually and based on the total net worth of your worldwide assets and income. In 2024, the rate ranges from 1.7% to 3.5% on individuals with net assets greater than $3.25 million.
In Spain, the sales tax on consumer goods is 21%, and it’s usually included in the price.
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How to Retire in Spain originally appeared on usnews.com
Update 08/08/24: This story was published at an earlier date and has been updated with new information.
