Find out how to retire to Spain, including advice on visa and pension rules, healthcare, and the most popular areas for retirees.
With warm weather, great cuisine, and a welcoming community of both locals and expats, it should come as little surprise that Spain is a top destination for retirees from Europe, the United States, and beyond. But before making the big move and settling into your new life in the sun, you’ll need to do some research. There are some key formalities to ensure your retirement relocation goes as smoothly as possible. Luckily, this guide is here to help, with advice on the following:
- Retiring in Spain
- Who can retire in Spain?
- Pensions in Spain
- Best places for expats to retire in Spain
- Services, organizations and clubs for older expats in Spain
- Wills and inheritance in Spain
- Healthcare for pensioners in Spain
- Useful resources
Looking for expert advice on retiring in the Spanish sun? Then speak to the professionals at Holborn Assets. Their advisors can help with all aspects of retirement planning, from pension transfers, access to UK state pensions, wills and legacy planning, and much more. If you're retiring in Spain, get the most out of your golden years with a free financial review from Holborn Assets.
Retiring in Spain
Spain is one of the most popular places to retire to in Europe. Indeed, retirees from around the world flock to the Mediterranean country for its sun, sea, sand, and laid-back lifestyle. Add in the excellent Spanish cuisine and relatively low property prices and you may be wondering why you didn’t retire earlier.
Spain’s popularity is growing all the time, and the country’s foreign-born population recently hit record levels. Official data (in Spanish) shows 5.8 million foreign residents now live in Spain, with 61% from the European Union (EU) or European Economic Area (EEA). Spain is also particularly popular with English-speaking expats, with more than 300,000 British people and 50,000 Americans having made the move.
Who can retire in Spain?
It’s relatively easy for EU/EEA nationals to retire to Spain, as you won’t need a visa or residence permit to live in the country. However, if you’re a non-EU citizen, you will need a residence visa (sometimes described as a ‘non-lucrative’) visa. The residence visa initially lasts for one year, and when renewed, lasts for a further two years.
Some non-EU citizens make the move to Spain on an investor visa, often referred to as a “golden visa“. This allows you to live freely in Spain and travel to other EU/EEA countries without restrictions. In exchange, you’ll need to make a significant investment in the Spanish economy. To get a golden visa, you’ll need to invest €500,000 in real estate. Or if you have the cash you can buy €1 million of shares in a Spanish company or fund. Alternatively, you can deposit at least €1 million in a Spanish bank. Lastly, you can buy €2 million worth of Spanish government debt.
Documents and administrative costs
If you’re not an EU/EEA citizen, there are various documents and checks required when applying for a Spanish visa. This means the costs of a visa application for a couple retiring to Spain can run to several thousands of euros. The documents you’ll typically need to provide include the following:
- a passport with at least a year remaining
- proof of your financial means
- proof of medical insurance
- a medical certificate
- a criminal record check
Financial requirements for retiring in Spain
If you’re a non-EU/EEA citizen who wishes to retire in Spain, you’ll need to prove you have enough income to support yourself without income from employment. As of 2021, the minimum figure for this is currently set at €2,259 per month or just over €27,000 per calendar year. You’ll also need evidence of having an additional €6,778 for each additional family member. This means a couple would need a combined annual income of at least €33,893. However, this figure is subject to change so always do your research when planning your move.
Be aware that your financial income can come from a range of sources, such as savings accounts, pensions, or dividends. However, remember that the figures above are the current minimum requirements. Should you be able to prove you have an income higher than these figures, your application process is more likely to be successful.
Retirement age in Spain
The retirement age in Spain is currently set at 65 years and 10 months. The retirement age will gradually rise each year until it reaches 67 in 2027. Workers who have contributed to the Spanish social security system for 37 years are allowed to retire slightly earlier, at the age of 65.
Pensions in Spain
If you’re planning to retire in Spain, it’s also important to consider your pension options. To qualify for the minimum Spanish state pension, you’ll need to have made social security contributions in Spain for at least 15 years. To get a full Spanish state pension, you’ll need to have at least 37 years of contributions.
Supplementary pensions, such as occupational (workplace) and private pensions are also available in Spain. It’s worth keeping in mind that private pensions are less common than in some other European countries.
Transferring an international pension to Spain
When moving to Spain, you may be able to transfer your pension pot from your country of origin. However, this depends on whether that country has an agreement in place with Spain. There may also be tax implications you’ll need to consider first. Therefore, it’s worth seeking advice from your pension provider, or a financial advisor, about whether you’ll be able to transfer your pension from your home country to Spain.
One such scheme is the Qualifying Recognised Overseas Pension Scheme (QROPS), which is commonly used by UK citizens who move abroad. Schemes such as QROPS enable you to consolidate your pensions into one single plan. This makes it easier to manage and protects you from fluctuations in exchange rates. Following the UK’s departure from the European Union in 2021, the UK government announced that British nationals moving to an EU country after Brexit can continue to receive their British state pension as normal.
Taxes on retirement in Spain
If you transfer your pension to Spain, any income drawn from your pot will be taxed under Spanish rules. Pension income in Spain is taxed in line with employment income if you’re considered a resident for tax purposes. For non-residents, the tax payable on pension income will vary depending on the type of pension and whether your home country has an agreement in place with Spain.
People retiring to Spain may need to pay capital gains tax if they sell homes or businesses in their home country. A wealth tax may also apply to your assets. Spain’s wealth tax varies from region to region, but the national threshold is €700,000 plus an allowance of up to €300,000 for a main residence, which you must occupy continuously for three years to be eligible. This is per taxpayer. Any wealth beyond this is taxed on a scale up to 3.5% for assets valued at more than €10 million.
Tax rules in Spain will differ compared to what you’re used to in your home country. For example, accounts which are tax-efficient in your home country may be subject to tax in Spain. With this in mind, it’s important to take advice from an expert on what you might need to pay.
Best places for expats to retire in Spain
The best place for you to retire to in Spain will depend largely on the kind of retirement you wish to have. For example, if you’re dreaming of waking up every morning with a balmy breeze brushing in off the Mediterranean, you probably won’t want to end up in Badajoz or Toledo. Therefore, it’s important to think about what kind of lifestyle you want and then go from there. After all, Spain is a large country with plenty of options for every taste.
You’ll also need to consider house prices if you’re planning to buy property in Spain. Data from Tinsa’s Local Market Index (in Spanish) shows properties in Spain cost an average of €1,421 per square meter, as of the second quarter of 2021. House prices tend to be higher in popular coastal areas. Indeed, the Balearic and Canary Islands saw the biggest increases in price in the second quarter of 2021, rising by 8%.
A report by the international property organization Spot Blue claims the top five places for retirees moving to Spain are as follows:
- Alicante: This popular Costa Blanca location benefits from up to 320 days of sunshine a year, and boasts beautiful beaches, great nightlife, and plenty of shops and entertainment.
- Javea: Another Costa Blanca favorite, Javea has a traditional, laid-back atmosphere with a slightly cooler climate and a sizeable English-speaking community.
- Malaga: This large costal city on the popular Costa del Sol offers history, a vibrant arts scene, great beaches, and excellent transport links.
- Marbella: Marbella is one of Spain’s most glamorous locations, with boutiques, restaurants, and a mixture of the modern and historic.
- Torrevieja: A popular town for retirees in the Alicante province. Boasts an excellent climate and is loved by both Spanish and expat retirees.
Services, organizations and clubs for older expats in Spain
Spain boasts thriving English-speaking expat communities across the country, particularly in those coastal areas that are popular with retirees. If you’re thinking about moving to Spain, be sure to search online for local expat groups. These are often on Facebook or MeetUp and can be a great tool for making friends.
In addition to this, international clubs such as Rotary International and Mensa operate in Spain and can be great networking tools. Groups such as Age in Spain provide information and events for older expats living in Spain. For more information on these groups and societies, visit our Spanish directory.
Wills and inheritance in Spain
When moving to Spain, it makes sense to write and register a will. If you fail to do this, your assets may be disposed of according to Spanish law rather than the law in your home country. Be aware that Spanish laws surrounding wills and inheritance, such as the nationwide Law of Obligatory Heirs, may be very different from your home country. Therefore, before making the move, ensure you do your research into both regional and national laws to avoid any unwanted surprises. For more information, read our guide to inheritance in Spain.
Inheritance tax in Spain can be complicated. Rates vary from 7.65% to 34% depending on the inheritance amount, and how much relief you’ll be able to claim against your bill depends on your relation to the deceased.
Healthcare for pensioners in Spain
Spanish healthcare is free of charge to some expat pensioners living in Spain. However, this will depend on your country of origin, and any reciprocal agreements between said country and Spain. For example, if you receive a British pension, you’re entitled to state healthcare in Spain paid for by the UK. To access this, you’ll need to obtain an S1 form.
If you’re not receiving a pension (for example, if you’ve retired early) or your home country doesn’t have an agreement with Spain, you’ll need to take out private healthcare insurance. Private health insurance varies in cost depending on where you live, your age, and the plan you choose. However, it’s available from a range of local and international providers and you can shop around to find the right option for you.
Should you wish to register for Spanish state healthcare, you’ll need to provide a valid passport or ID card, your residency certificate, and evidence of your address. Once you’ve registered, you’ll be given a social security number. This will allow you to register for treatment and apply for a health card. For more information on this, read our guide to the Spanish healthcare system.