Get to know the authorIf you want to enjoy your retirement days in a country with a lower cost of living, great weather, and a rich culture, you may want to retire in Spain.
Between the Mediterranean climate, delicious tapas, lively festivals, and laid-back pace of life, Spain has become an increasingly popular retirement destination. Of course, before up and moving to Spain, you need to consider practical matters — like taxes — as well.
Below, we’ll go over some of the nitty-gritty of retiring in Spain, including visa options, healthcare quality, tax obligations, and more. Let’s get started!
Benefits of retiring in Spain
So why are so many expats flocking to Spain to enjoy their golden years? Here are a few of the top reasons:
- Weather: Many places throughout Spain have dry, mild winters and warm, sunny summers
- Nature: Stunning vistas can be found all throughout Spain, from the white-sand beaches of the Balearic Islands to the snow-capped Sierra Nevada mountains to the lush green hills of Galicia
- Food & drink: Gastronomy in Spain is a point of national pride, with some of the most iconic dishes including tortilla de patatas (potato omelet), paella, and jamón. Beverages like cava, jerez (Sherry), or tinto de verano — a refreshing blend of red wine and lemonade — aren’t to be missed either
- Cost of living: The cost of living in Spain is significantly lower than in the US, with consumer prices and rent about 38.3% lower than in the States
- Infrastructure: Spain offers walkable communities, excellent public transport in cities, high-speed rail service, world-class healthcare, and more
- Other expats: With nearly 36,000 Americans living there as of 2023, Spain is home to a thriving US expat community
Potential challenges for retirees in Spain
Of course, retiring anywhere, including Spain, has both pros and cons. Some of the potential hurdles for American expat retirees in Spain may include:
- Language barrier: Spain has one of the lowest levels of English fluency in Europe, with only about 28% of the population able to speak it. English is much more widely spoken in big cities as well as popular tourist and expat areas, but learning a little Spanish can go a long way
- Bureaucracy: While Spain’s slower pace of life is a draw for many, it can also be frustrating when it comes to things like obtaining residence cards
- Rising real estate prices: With more and more people immigrating to Spain, housing prices are rising fast, particularly in cities and coastal areas
How to retire in Spain
There are many different Spanish visa options to choose from — including the digital nomad visa and the golden visa — but the most popular one for retirees is the non-lucrative visa.
The non-lucrative visa, sometimes called the retirement visa, is geared toward those with enough passive income or savings to be financially solvent.
Spain retirement visa: Eligibility & requirements
To apply for Spain’s retirement visa, you must:
- Be a non-EU citizen
- Have a clean criminal record
- Be in good health (i.e. not pose a threat to public health)
- Purchase private health insurance
- Earn at least 400% of Spain’s Public Income Indicator for Multiple Effects (IPREM), currently equal to €28,800 (~$31,050) annually or €2,400 (~$2,588) per month
- For each family member you bring, you must earn an additional 100% IPREM, currently equal to €7,200 (~$7,763) per year or €600 (~$647) per month
Pro tip:
You can also use savings to meet the income requirements for the non-lucrative visa.
Permissions, restrictions, & duration
Spain’s retirement visa entitles you, your spouse/partner, and your dependent children/parents to live in the country legally. However, you will not be permitted to work at all as a holder of this type of visa.
Upon approval, you will be granted a one-year residence card, which can be renewed for an additional two years upon expiration. After those two years, you can renew the visa once more for an additional two years, for a total of five years in the country.
At that point, you can apply for permanent residency.
Required documents & application process
To apply for Spain’s retirement visa, you must:
- Gather all the required documents
- National visa application form
- Non-working residence visa application form
- Passport & copy
- Passport-size photo
- Proof of residence in your consular district (e.g., driver’s license, state ID) & copy
- Residence permit application form
- Proof of financial means (e.g., bank statements from the last three months, latest tax return, retirement account payouts)
- Notarized affidavit confirming you won’t work while in Spain
- Letter of termination or sabbatical approval from your last employer (for those under retirement age only)
- Proof of accommodation for the first three months
- Proof of health insurance
- Medical certificate
- Federal criminal background check
- Fees ($140 for the visa, $12 for the residence permit)
- Submit your application
- Depending on your consulate, you may need to schedule an appointment to submit your application in person or mail it in via a self-addressed, pre-paid envelope
- Receive approval (typically within three months)
- Collect your visa & travel to Spain
- Register for a residence card within 90 days of your arrival
How much does it cost to retire in Spain?
The amount of money you will need to comfortably retire in Spain will depend largely on factors like location, lifestyle, and how many people will accompany you. In a more expensive area like Barcelona, costs might reach around $2,500 per month for a more modest lifestyle or $4,000 monthly or more for a more comfortable lifestyle.
To give you a better idea, here are a few averages for some of the more common costs across Spain:1
- Rent for a one-bedroom apartment in city center: $1,005
- Rent for a one-bedroom apartment outside of city center: $750
- Rent for a three-bedroom apartment in city center: $1,640
- Rent for a three-bedroom apartment outside of city center: $1,150
- Utilities: ~$139
- Monthly public transportation pass: $35
- Monthly gym membership: $42
- Meal for two in a mid-range restaurant: ~$54
Best places to retire in Spain
While there are many great places to retire in Spain, these five locations stand out as top contenders:
Costa del Sol
Costa del Sol is a stretch of Andalusian coastline that includes the city of Málaga and towns like Mijas and Marbella. Although summer temperatures can be high, there are plenty of beautiful beaches where you can cool down with a dip in the sea. The area is known for its vivacious, friendly residents, traditional flamenco dancing, and incredible seafood.
Majorca
If you’ve always dreamed of retiring to an island, you’d be hard-pressed to find a better option than Majorca. Besides the obvious appeal of the pristine beaches, Majorca offers awe-inspiring mountains, quaint historical villages, and even a bustling city. In Palma, you can enjoy world-class restaurants, visit historic cathedrals, and even tour palaces.
Madrid
The thriving capital of Spain is bursting with culture. Home to the “Golden Triangle of Art” — the Reina Sofía, Prado, and Thyssen museums — Madrid also has theaters, cultural centers, and beautiful plazas. Don’t leave without sampling tapas along Calle Cava Baja or taking a leisurely stroll through Retiro Park.
Costa Blanca
This stretch of Mediterranean coast is full of charming towns like Alicante, Benidorm, and Torrevieja. The area boasts beaches, resorts, and pleasant weather year-round. History buffs will appreciate the Moorish villages and Old Towns, while nature lovers will love hiking along the rugged coastline and exploring nearby waterfalls.
Valencia
The seaside city of Valencia may be best known as the home of paella, but it offers so much more. The Ciudad de las Artes y las Ciencias (City of Arts and Sciences) is a must for museum lovers, while the Central Market is a favorite among foodies. Among the highlights of the year is Fallas, a festival marked by a parade full of floats and fireworks.
Healthcare options for retirees in Spain
Spain has an excellent healthcare system, recognized as the most efficient system in Europe — and among the top-ranked by US News. The country’s public healthcare system, known as the Sistema Nacional de Salud (SNS) provides high-quality, low-cost coverage to those eligible.
Unfortunately, holders of the non-lucrative visa must typically hold private insurance (unless they become permanent residents at a later date). The good news is that private healthcare in Spain is much more affordable than it is in the US, with monthly premiums of about $112 to $224 per month. That said, the price will vary depending on your age, health, and other factors.
Private insurance in Spain grants you access to modern, well-equipped healthcare facilities with highly qualified medical professionals — often with minimal wait times. It’s worth noting, however, that private insurance plans rarely cover pre-existing conditions, though out-of-pocket costs are usually much lower than in the US.
Do Americans pay taxes in Spain?
As a US expat non-lucrative visa holder, you will likely be subject to taxes in both Spain and the US — however, you can often avoid double taxation.
Spain taxes
How you are taxed in Spain depends on whether you’re considered a tax resident. To be considered a tax resident, you must meet at least one of the following conditions:
- Spend over 183 days per calendar year in Spain, OR
- Have financial interests located within the country, OR
- Have a Spanish spouse or dependent children
Note:
To renew your non-lucrative visa in Spain, you must live in the country for at least 183 days in a year, which automatically triggers Spanish tax residence.
Tax residents
Spanish tax residents are subject to taxation on their worldwide income and must file a Spanish tax return.
The Spanish tax rates for ordinary income — which includes a retirement account, pension, and Social Security distributions — in the 2023 tax year are as follows:
| Income (EUR) | Income (USD) | Tax Rate |
| Up to €12,450 | Up to ~$13,411 | 19% |
| €12,450 to €20,200 | ~$13,411 – $21,760 | 24% |
| €20,200 to €35,200 | ~$21,760 – $37,917 | 30% |
| €35,200 to €60,000 | ~$37,917 – $64,632 | 37% |
| €60,000 to €300,000 | ~$64,632 – $323,175 | 45% |
| €300,000+ | ~$323,175 + | 47% |
Tax rates for savings income — which includes capital gains, dividends, interest, capital transactions, and insurance payouts — are as follows:
| Income (EUR) | Income (USD) | Tax Rate |
| Up to €6,000 | Up to ~$6,463 | 19% |
| €6,000 – €50,000 | ~$6,463 – $53,863 | 21% |
| €50,000 – €200,000 | ~$53,863 – $215,450 | 23% |
| €200,000 – €300,000 | ~$215,450 – $323,175 | 27% |
| €300,000+ | ~$323,175 | 28% |
Non-tax residents
Non-tax residents are taxed only on Spanish-sourced income at the following rates:
- General: 24%
- Pension income: Between 8% and 40%
- Capital gains, interest, & dividends: 19%
- Royalties: 24%
US taxes
While it may not seem fair, all American citizens and permanent residents who meet the minimum income reporting requirements must file an annual federal tax return. Depending on where they most recently lived in the US, they may also need to pay state taxes.
Fortunately, the US offers a couple of tax breaks specifically for US expats, including:
- The Foreign Tax Credit (FTC): Gives Americans abroad dollar-for-dollar credits on any foreign income taxes they’ve paid, which can be applied to their US tax bill — often completely erasing their US tax liability
- The Foreign Housing Exclusion (FHE): Allows US expats to write off certain qualifying housing expenses abroad, like rent, utilities, property insurance, etc. To qualify, you must meet either the Physical Presence Test or the Bona Fide Residence Test
Pro tip:
The US government taxes certain types of retirement income at a lower rate than traditional earned income. Only 85% of Social Security payments are subject to taxation, while withdrawals from post-tax accounts like Roth IRAs and Roth 401(k)s are tax-free.
Keep in mind, however, that living abroad may trigger certain reporting requirements, such as the:
- Foreign Bank Account Report (FBAR): Mandatory for Americans with $10,000 or more across foreign financial accounts
- Statement of Specified Foreign Assets: FATCA requires Americans with more than $200,000 in foreign assets on the last day of the tax year — or more than $300,000 in foreign assets at any point in the tax year — to file Form 8938. Note that thresholds for this form are much lower, at just $50,000, for those who live in the States.
Resources
- Cost of Living Comparison Between United States and Spain
- Number of foreigners from North American countries registered in Spain in 2023, by country
- Nearly 60% of Spaniards say they can’t read, speak or write in English
- Non-working Residency Visa
- How to Renew Your Non-Lucrative Visa in Spain
- Cost of Living in Spain in 2024
- These Are the Economies With the Most (and Least) Efficient Health Care
- Health Insurance and Healthcare in Spain Explained
- Spain – Individual – Taxes on personal income
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