Spain – a sunny and warm expatriate heaven in the Mediterranean – is a perfect destination for those who see their retirement life as a continuous celebration of the sun, good food and a relaxed unhurried lifestyle.
Spain is a truly spectacular country: its climate is sweet, its landscapes diverse, its lifestyle a festival celebrating life. From the gentleness of the Mediterranean coast to the dramatic scenery of the Atlantic the country is full of wonders: rocky peaks of the Pyrenees, sweet lush-green river valleys and even dry arid areas like the Baetic Cordillera which are swept by hot winds from North Africa.
Spain is a country of sun, passion, great food and wine, and friendly people.
It is easy to envisage your retired life under the Spanish sun: a glass of rioja on the terrace of your Mediterranean villa, a pan of sizzling paella at a café on the beach, passionate flamenco dancers, lazy afternoon siestas – what’s not to love? Spain can generously provide you with a lifestyle of your dreams.
Please note that quite a few things might change when Brexit will be implemented, so keep an eye on our guides for relevant updates.
What Makes Spain a Perfect Retirement Destination
Every year Spain attracts millions of people from all over the world, many of them choose to have their second home in the sun there, but there are a lot of those who decide to retire to the country permanently.
For Brits it is a perfect retirement destination: it’s close to the UK, it has great weather most of the year, the cost of living is lower, there is no shortage of property in Spain when it comes to buying a home, and the quality of life is as good as you can get in the Mediterranean.
Spain accommodates every kind of lifestyle imaginable: whether you are a keen golfer, or a yacht lover, enjoy mountain hikes or skiing, love beaches and a suntan, can’t do without shopping or cultural entertainments – all of these and more can be found in Spain.
Not only has Spain a lot to offer to retirees, it is also a great destination for your family in the UK to come and visit. Your grandchildren will be delighted by the prospect of seeing you and spending a day or more in a famous Port Aventura adventure park, and your friends will be happy to have a couple of days of pure Mediterranean bliss.
Learning the Language
There is a very big English speaking community in Spain, and in almost all locations popular with retirees you can easily get along without learning Spanish. However, Spanish is not a difficult language to pick up even from scratch. And if you plan to stay in Spain permanently you will only win by learning to speak the language. It will significantly broaden your social life and give you more independence in terms of dealing with authorities, it will also earn you respect from locals for making an effort, and bring you much closer to the local community.
UK pensioners who have retired to Spain and people of independent means residing in Spain must apply for residency. It’s a law and might also bring you certain benefits like not having to pay Capital Gains tax when you sell your property in Spain and being able to take your money out of the country much easier.
As a retiree holding a confirmed Residencia you can join the Pensionista Club and be entitled to the same benefits as Spanish Nationals: reduced rail and bus fares, reduced cost holidays in good hotels, etc.
NIE and Residence Certificate
To get your NIE (Número de Indentifación Extranjeros) and residence certificate apply to the nearest foreigners office (Oficina de Extranjeros) or police station (Comisaria de Policia), which can be found in all main towns.
The Oficina de Extranjeros will issue you with a Residence Certificate. This certificate displays your name, address, nationality and NIE with the date of your registration.
The process can take a long time, so the sooner you begin the better.
Registering on the Padron at your Town Hall
You will need this to get your Certifica de Empadronamiento – a card sent to you by the local Town Hall, which proves that you are on the Electoral Register.
It is comparatively easy – just fill in an application form at the padrón office of your local town hall. You will also be asked for your passport, NIE, proof of address (a utility bill) and house deeds or rental contract.
Certifica de Empadronamiento can give you access to some aspects of social care (after a certain period of time), discounts on the events organised by the Town Hall and voting rights in local and European elections. You might also need the padrón certificate to access healthcare in Spain and obtain Spanish number plates for your car.
Best Places to Retire in Spain
Spain can easily persuade anyone that it is one of the most perfect places on earth to spend your retirement years in. It is not hard to find dozens of fabulous places to live in Spain, it is hard to choose the one out of all of them to call home.
It can be very difficult to choose the right spot in Spain to retire to – it is because the choice is almost unlimited and because Spain is so diverse in terms of its geography. It stretches from the gentle coast of the Mediterranean to the dramatic Atlantic shores, to the stunning landscapes of the Pyrenees.
Tastes differ, they say, and so, while looking for your perfect location in Spain to retire to, you will be wisest to travel around and see the country with your own eyes. And even go and try locations which are usually not the first choice for retirees, such as timeless elegant Madrid, or vibrant and colourful Barcelona, or ever-changing Valencia if you wish to plunge into urban style living.
However, a more conventional route for expat retirees is to go for less urban coastal destinations of Spain. It is where most expats end up anyway, for those destinations are unrivalled in their beauty, spectacular landscapes and relaxed idyllic lifestyle.
We will touch upon the most popular and beautiful coastal locations, which usually attract most of the retired expats to their sunny shores.
Spanish Costas are the most popular regions with tourists and expats alike, but it will be unwise to limit yourself to them without exploring the rest of this fantastic and welcoming kingdom.
The Spanish northern coastline stretches about 450 miles (724 km) from France to Portuguese borders. The coastline is relatively even due to the protection of the Bay of Biscay, but it gets more rugged after Cape Ortegal and right up to the Portuguese province of Minho.
Spain’s Atlantic coastline provides spectacular views of natural beaches framed by lush and dramatic landscapes. The whole region, although gaining in popularity with Spaniards from inland, is peaceful and quiet, not yet discovered by international mass tourism.
The Atlantic coast boasts moderate temperatures of around 25C in summer, which is never too hot.
The infrastructure is reasonable and the roads and autopistas are wide and in good condition.
The beaches are remarkable: you can find long sandy stretches of the coast with lovely promenades along as well as sweet natural coves hidden away behind the hills.
Cost of living and property prices along the Atlantic coast of Spain are remarkably reasonable. And there is a lot to see inland as well.
The Picos de Europa
Just 20 kilometres inland there are the amazing Picos de Europa mountains. This mountain range is part of the Cantabrian Mountains and stretches through the Autonomous Communities of Asturias, Cantabria and Castile and León. The views there are breathtaking and mountain walks will deliver an unforgettable experience.
Mountaineers, cavers, kayakers and walkers are attracted in their hundreds and thousands to the peaks of the Picos de Europa National Park, set above green fields and stone villages.
The valleys underfoot of the mountains are full of grazing animals, and the farmers there produce piquant blue cheeses, such as Picon Tresviso Bejes.
Asturias is an astoundingly green region in the northwest of Spain. It’s the country of contrasts with snowy mountains and sandy beaches, tiny tapas bars and top-class restaurants, vibrant towns and quiet valleys where bears and wolves freely roam around.
Every place, be it a little village or a lively town, has its own character and Gijon is unlike Oviedo, Lastres is absolutely different from Cudillero, and the inland is nothing like the coast. The only common thing between them is that all of them are capable of stealing your heart.
Galicia is a northwestern province of Spain situated next to Asturias right above Portugal. As with most of the northwestern territories it is temperate, lush and green with mountain ranges, rivers and endless stretches of stunning beaches free from tourist crowds.
Galicia has two international airports, one in la Coruna and the other in Santiago de Compostela, which makes the region easily accessible for Britons.
To settle down in Galicia you have a choice of locations – along either the western or northern coasts or up in the mountains near either Lugo or Ourense. As anywhere else in the world, properties are more expensive along the coast. Some coastal areas are less built-up than others, with the south of Galicia (the Rías Bajas/ Rías Baixas) being the most developed.
Due to the fact that the whole region is still relatively free of mass tourism, the cost of living there is cheaper than in many other parts of Spain.
From Galicia it is very easy to nip over to Portugal if you feel like sampling a different culture and cuisine.
Galicia is a paradise for seafood lovers. It offers a vast range of fish and shellfish, all of which can be bought down at the local market, wherever you are. If you can’t be bothered to cook, there are amazing places to eat out where food is cooked fresh and it tastes heavenly.
The Basque Country
The Basque Country is a stunningly beautiful location that claims hearts of many expatriates.
It is also friendly and welcoming. With its great cuisine, long-standing rituals of spending time with friends and family, you will find some of the local traditions irresistibly charming. Such are cider festivals and El Txikiteo. El Txikiteo is similar to our pub crawl, except that you go from bar to bar to have pintxos and really small sips of wine and beer. Pintxos are local snacks, mainly skewered type of food, which are usually presented in great variety and taste exceptionally wonderful.
Being an expat in the Basque country is easy as long as you speak some Spanish, so if you choose the region as your home, it is worth making an effort to learn the language.
If you need an injection of urban life, go to Bilbao. Bilbao, de facto, is the capital of the Basque country. It is a vibrant riverside city with a pronounced industrial past and architecturally modern present. Old factories and shipyards are found side by side with cutting-edge architectural designs, one of the examples being the titanium-clad Guggenheim Museum along a revitalised waterfront.
Around Bilbao there are a number of mediaeval towns with churches, basilicas, sanctuaries or convents from different periods. The towns with their narrow, cobbled streets, pretty squares and colourful cottages, are truly charming places to visit.
The city has the world’s biggest covered market with all kind of produce on offer. So if you are a gourmet of good food, Bilbao is your paradise.
There are all kinds of shops in Bilbao too, from typical high street shops mainly along Gran Via, to modern shopping centres to high-end stores around Plaza Moyúa, to tiny boutiques and arty shops in the old town.
The wildness, natural lushness and tranquility of the northwestern coast are in deep contrast with Spain’s sun-drenched southern beaches.
Southern Costas are stars of international tourism. Not only do they boast glorious weather, but they also have exceptionally attractive names.
The Costa de la Luz (Coast of Light) is so called because of its bright sunshine.
East of Point Tarifa, the southernmost point in Europe, is the narrow Costa del Sol (Sun Coast), which reaches Cape Gata (Cabo de Gata). The Costa Blanca, stretching from Cape Gata to Cape Nao (Cabo de la Nao), is full of white and sunny beaches caressed by the warm Mediterranean Sea.
Luxury Living in Southern Costas
Southern Costas are well known, explored and researched by Spain lovers. One of the most loved of all the southern destinations in Spain is no doubt Andalucia. Although thoroughly Spanish, the region has inherited a lot of architecture from its Moorish rule period in the 8th-15th centuries, many of the wonderful buildings of that time are now showpieces of Andalucian cities.
To those who have the desire and the means to settle in Andalucia, the region can offer a lifestyle of the highest standards possible, with luxuries dazzling the eye almost as much as the Mediterranean sun.
The Costa del Sol
The Costa del Sol is one of Andalucía’s main treasures.
The coast stretches east and west from Malaga city. It goes as far as the Costa Tropical of Granada province to the east, southwards towards Gibraltar to the west. All the major resorts such as Fuengirola, Torremolinos and Benalmadena, and, of course, Marbella are located there. This stretch of the Spanish coast has a very international feel, with visitors and residents from all over the world.
Malaga is a lively port city full of hotels and resorts, often known as the capital of the Costa del Sol. The city boasts good infrastructure, top-class cuisine and fabulous architecture, rooted in Moorish and Roman times.
If you are into apartment living – check out the old town centre. There are quite a few refurbished properties there – great apartments with high ceilings and lovely windows.
If you want to live in a quitter area, check Malagueta, Limonar and Cerrado de Calderon. These are the areas where typical suburban houses and flats can be found.
Malaga is a cheaper city than Madrid or Barcelona. It is not as vibrant either, but it is a nice coastal city with all the necessary facilities and great weather.
Marbella is all about glamour and shine; it attracts the rich and the famous from all over the world.
It is a fantastic location with wonderful beaches and architecture, vibrant and bright.
Gastronomically Marbella is a paradise where every place be it a small café or a Michelin starred restaurant, serves exceptionally good food.
There are plenty of locations to choose from in Marbella, the main ones being San Pedro, Puerto Banus, Nueva Andalucia, Golden Mile, Town Centre and East Marbella.
Almost every district in Marbella enjoys scenic views of the mountains that frames the city on the north, every district has something special to offer, too.
The old town is delightfully lively, full of little quirky shops and galleries.
The Golden Mile offers the best nightlife and entertainment – it is full of prestigious nightclubs and luxury coastal estates. It also houses Puerto Banús marina – a spectacular display of extremely expensive yachts. The marina is lined with elegant boutiques and bars.
Puerto Banus is a relatively modern development, which was designed and built in 1970 as a luxury marina and shopping area. The shops and restaurants in Puerto Banus are exceptional, and so is the nightlife.
The city is truly cosmopolitan, with great shopping and places to go out and fantastic entertainments and cultural events on offer.
Located at the heart of a fabulous area of the Costa del Sol, only a few miles from Puerto Banús, is a stunning and truly exuberant development – La Zagaleta or “La Zagaleta Country Club”.
This one of the most exclusive residential areas in Europe, extremely well planned and connected to all the major infrastructure, lies in a stunningly beautiful location of the Costa del Sol. With the Ronda mountains to the North and only a short drive from Marbella, La Zagaleta is a perfect destination for those, who want luxury country living, well-groomed parks, golf fields, spacious villas, – all of this within a short distance from vibrant cities.
In the southernmost part of the Costa de Sol, in Cadez province near Gibraltar, there is one more exclusive location – the port and residential developments of Sotogrande, where Spain’s most expensive real estate is located. Some of the richest and most powerful families of Spain have summer homes in Sotogrande as well as other rich and famous families from all over the world.
If you love polo, golf or yachting, – Sotogrande is the place for you. Some of the best golf courses in Spain are located there as well as Santa Maria Polo Club, and yacht owners can choose a villa with its own jetty.
The pearl of Sotogrande is its renowned Trocadero Sotogrande Restaurant and Beach Club where you can enjoy superb Mediterranean cuisine in the most delightful surroundings of your choice: from sea views to swimming pool areas, to gardens and hammocks, to intimate secluded spaces – anything you can imagine is there.
Estepona, a lovely town in the province of Malaga full of white-walled houses and buildings, is a charming coastal place squeezed between the sea and the mountains. It is popular with tourists and expats, and there are all the amenities and facilities to serve the expat community: shops, cafes, tapas bars, great beaches, a wonderful marina, eight golf courses and seven museums.
Estepona’s beaches, stretching for over 13 miles along the coast, are truly fabulous, two of them are Blue Flag beaches.
Because of its position between the sea and the mountains, Estepona has a microclimate of its own with over 325 days of sunshine a year.
Costa del Sol Urbanisations
Those preferring to live away from towns crowded with mass tourism and keen to settle within areas that certainly attract other expats as well as locals, should definitely look at front-line beach gated urbanisations along the Costa del Sol such as Torre Bermeja, Laguna de Banus or Malibu. These are all five-star urabnisations with state of the art facilities, swimming pools, fantastic gardens, gyms, etc., – everything to make your retired life pleasant and easy.
The Costa Blanca
The Costa Blanca, or the white coast, known so for the colour of its sand, stretches from Alicante to Valencia. Its 125 miles of soft pale sand along the coastline can’t leave anyone indifferent to its charms. It is one of the most popular mass tourism destinations in Europe.
The coast, framed by ragged mountainous and sandy beaches, have subtropical vegetation, and a great number of sweet little villages in between its two main cities.
Valencia, the northern gateway to the coast, is an urban hub of the Costa Blanca. It’s large and loud, vibrant and dynamic, and boasts everything that a city can offer to its dwellers – infrastructure, facilities, cultural events, entertainments and fabulous nightlife.
Alicante is the capital of the Costa Blanca region.
With its green parks dotted all over and delightful promenades Alicante is irresistibly charming. There are wonderful beaches and quiet coves to idle away your daytime, while at night the city offers an exciting nightlife with a great variety of places to go out and enjoy.
The International Airport of Alicante (El Altet) is just a short drive away and it takes about 2 hours to get there from most major European capitals (London, Berlin, Frankfurt, Paris, Milan, Zurich).
The Costa de Azahar
Nestled between the tranquil delta lands of the Ebro river and the vibrant cities of Barcelona and Valencia lies the Orange Blossom Coast – the Costa de Azahar.
The Costa de Azahar is a very picturesque location: contrasted by the spectacular mountain background there are lush lemon, orange and fig orchards sloping gently down to the shores of the pale beaches and blue waters of the Mediterranean.
Surprisingly enough, this coast is not yet a main focus of attention for mass tourism. That’s why it can boast not only relatively low built-up coastal areas, but a cheaper cost of living than the Costa Blanca, for example.
There is a lot to do if you prefer an active life: golf, tennis, scuba diving, horse riding, water parks, theme parks, spa centres, etc, – all kinds of entertainments and activities are on offer for the lovers of active living.
There is also a fantastic walk through the Sierra de Irta and old-world surrounding towns such as Peñiscola and Morella, their cobbled streets and cute squares oozing with history and culture.
The Costa Dorada
To the south of Barcelona lies the Costa Dorada (Daurada in Catalan) – the Golden Coast.
This dreamy stretch of the Mediterranean coast of Catalonia between Cunit and Alcanar is one endless beach full of clean fine sand, only interrupted by tranquil towns and farmlands where vineyards, olive groves, carobs, hazel trees and almond trees grow squeesed between the mountains and the sea.
The Golden Coast has a great number of sweet little villages and more vibrant coastal towns like Castelldefels, Sitges, Vilanova I la Geltrú, Salou and Tarragona.
This stretch of Spanish coast offers sophisticated living as well as great beaches. It has good transport connections; there are regular trains to Barcelona and everything the big city has to offer.
Spain has been one of the most favourite property markets in Europe for foreign buyers for a long time. The choice of properties and locations is great, and when you get to know the country and identify your preferred place, finding a property there won’t be a big problem.
Spanish Costas have always been the most favourite locations for foreign property buyers for both investment purposes and acquiring homes for personal use. The reasons behind it are clear: Costas are great for beaches and weather, and provide an easy access to modern facilities, shopping, vibrant nightlife and transport links.
However, other regions of Spain have been slowly catching up, and now the northwest of the country such as Galicia, for example, is becoming more and more popular with international buyers, who find the region’s rural feel, cheaper property, and significantly lower tourist numbers very attractive.
Choosing a Lawyer
Wherever you wish to buy a home in Spain, always make sure that you have an independent and professional solicitor to advise you on your purchase. It is even possible to get legal help from a UK based legal company specialising in Spanish Law and house purchase. They can act as an intermediary between you and a local lawyer.
Make sure that the local lawyer representing your interests is independent from the estate agent, developer or company showing you the properties. Find an English-speaking lawyer – it is not as difficult in Spain and will ensure that you are explained all the details of the contract without ambiguities of translation, and make sure that the lawyer is specialised in Spanish land law (urbanismo).
Ask for your lawyer’s registration number and check that they are registered and practising with the local bar association (Colegio de Abogados).
Your lawyer should also have professional indemnity insurance.
The most important advice is – do not sign any papers or hand over any money until you have taken independent legal advice.
Once you have found the property you wish to buy, you make an offer and then negotiate with the vendor to reach an agreement. You can also have the property surveyed or valued by an independent surveyer, and it is strongly advisable especially if you buy a resale property. The results of the survey can give you a stronger negotiation position with the vendor and a better understanding of what you are really prepared to pay for the property.
When it’s done and the agreement with the buyer is reached, your solicitor conducts necessary checks and does the due diligence. It usually involves reviewing the sale agreement, verifying titles, and carrying out other checks to ensure that your interests are protected.
Next step is signing a private contract with the vendor. At this point you will also be required to put down a deposit as specified in the terms of the contract. Remember that changing your mind after signing the contract can cost you a fortune, so be absolutely sure of your decision before you sign.
You are then given time to get your money in place prior signing the deeds before a Notary and taking possession of the property. The final step requires you to get your title inscribed in the property register, pay any relevant taxes and get utilities connected.
In most cases the purchase price includes the estate agency fee (usually 5%), but do ask before signing a contract. It is common practice in Spain for Spanish vendors to inform the estate agent what net-amount they want from the sale. It is up to the agent then to charge as much on top of it as they can to increase their commission. Foreign vendors are most likely to choose a traditional way and negotiate a fee as a percentage of sale. Be aware of this when negotiating the purchase price.
As a rule you will have to pay 10% of the purchase price as a transfer tax that goes to the Spanish Treasury.
Don’t forget to budget in notary fees and a land/property registration fee, which varies according to the purchase price of the property. Also consider solicitors fee which can be 1% of the purchase price + VAT at 21%.
Buying Property Off-Plan
If you intend to buy directly from a developer, which is not a rare case in Spain, where a big part of the construction market is specifically focused on foreign buyers, make sure you are dealing with a reputable company.
There are certain risks involved with buying a property which is not built yet.
Remember that the property market in Spain is abundant, so there is no real need to sign a Reservation Contract straight away under the agent’s pressure that the development is going to be sold off next day and you will be left behind.
When you are sure that you want to proceed, try to negotiate a better deal with the developer. There is always something you can negotiate on to improve the deal for yourself: either a straightforward discount, or fixtures, or financial terms, or/and any conditions about snagging period. It is even possible to negotiate a 5% price reservation on your side until the snagging period is over.
After you and the developer have agreed on the terms, you will be required to sign Reservation Contract (Documento de reserva) and put down a deposit, usually specified by the developer.
Check that your Reservation Contract has a clause stating that the deposit is refundable in case you choose to withdraw. Such a clause is rare in this type of contract, so you might try to insist on it to protect yourself. Most reliable developers will agree to the clause.
Due Diligence When Buying Off-Plan
Before this, have your lawyer carry out an appropriate due diligence. Make sure your lawyer checks whether the land the building is on is registered under the developer’s name, whether the land is classified appropriately and whether the development has been issued a building licence by the local town hall and the planning permission has been obtained.
Do your own due diligence as well on surroundings, infrastructure, facilities, etc.
Make sure you have as detailed plans and specifications as possible, including the built area (superficie construida), useable area (superficie útil), total area including common areas (superficie total) and technical plans that show the functional installations.
And finally make sure your developer has an adequate insurance or a bank guarantee (aval bancario) which is required by law for developers receiving stage payments for off-plan properties. This guarantee aims to protect your funds should anything go wrong with the construction.
The developer should be able to present you with a certificate from the bank or an insurance company to prove that a proper insurance has been taken out.
Down Payment Construction Contract and Licence of First Occupation
Next you will be required to sign a down payment contract or private contract (Contrato privado de compraventa).
When signing the down payment contract, make sure you receive a document from the guarantor which confirms that your stage payments are guaranteed. The document must bear your name on it.
At the signing of the contract you will usually be required to put down the first payment.
The final payment is done when the property is completed and the deeds are signed.
On completion the development should be granted a Licence of First Occupation (or ‘Licencia de Primera Ocupación’ ). This licence is issued by a town hall and is a legal confirmation that a newly-built property fully complies with all planning and building regulations, and is ready to be used as a dwelling.
It is very important to set all your finance, investments and other money matters right before moving to Spain. You should do it with the help of professionals, then your retirement will be a pleasant and carefree time of your life.
Opening a Bank Account
It is possible to set up an account in advance of your move if you need to do so. The procedure includes you having to prove that you are not resident by providing a certificate of non-residency (certificado de no residencia). To get one, you have to apply at a Spanish police station and the process typically takes 10 days. So in reality, it is easier to open an account after you settle in!
Book an appointment with the bank you have chosen. If you are not fluent in Spanish ask for any English-speaking staff for your appointment, or just bring a friend who can translate with you.
You will need proof of identity (eg. passport), foreigner identification number and certificate (número de identificación de extranjeros) – NIE, proof of address and proof of your pension income.
The documents that aren’t in Spanish may need to be officially translated. Ask your bank whether they accept non-translated documents.
Usually it takes between 1 and 5 days for the account to start working, and cheque books and credit cards are usually dispatched within two weeks.
Taxes in Spain
Becoming resident in Spain for tax purposes means you are subject to Spanish taxation on your worldwide income. If you are a non-resident in Spain you will pay Spanish tax on Spanish income only, but then you cannot stay in the country for more than 182 days a year (not necessarily consecutive). You are also considered Spanish tax resident if your “centre of vital interests” is in Spain i.e. it is where most of your personal, financial and economic interests lie, or if your spouse lives there for more than 183 days each year. So being retired to Spain almost always means you are resident in Spain and this of course affects your tax status.
In Spain you will have to pay tax on your worldwide income, which includes your UK state retirement and other pensions, and interest earned on deposit accounts in the UK or offshore. So as tax resident in Spain you must declare all the assets you own outside Spain.
Spanish taxation rules are quite complicated, and the best course of action is to seek professional advice from a local taxation specialist and also an international financial advisor regulated to give advice in Spain. The former will ensure that the tax authorities of Spain are happy with you, while the latter will help you to utilise your expat advantage – your non-resident status in the UK – which can give you fantastic options to optimise your wealth and propbably get the best out of your pension.
Expat pension incomes are taxed differently in Spain depending on what kind of pension they are.
Occupational and state pensions are taxed as general income together with all other incomes of such kind at the progressive scale rates from 24% to 43%.
Your retirement pension is always paid gross in the UK and then taxed in Spain, but for other incomes to be paid gross in the UK you must prove to the UK authorities that you are resident in Spain. For this you should obtain a document from the local tax office, confirming your residency in Spain for tax purposes – Certificado de Residencia fiscal NEN – España Convenio, and send it to HM Revenue & Customs at the Centre for Non-Residents.
Only a certain percent of your annuity income is taxable in Spain. It is usually between 8 and 40% of the amount you receive depending on your age. For example, a recipient under 40 years of age will have 40% of their annuity income taxed, while for a recipient over 70 years old only 8% of their annuity income is taxable.
The taxable part of your annuity is taxed at the progressive scale from 20 to 24% depending on the amount.
An annuity from a UK private pension can be taxed as an annuity or as general income. Seek professional advice to decide the best course of action.
It is not advisable to take your lump sum pension when you are already resident in Spain for tax purposes. The best thing is to do it before registering as resident, and then either qualify for annuity taxation rates or invest the money offshore.
Seek Professional Advice to Protect Your Wealth
It is highly recommended that before taking any decision concerning your pension incomes and finance, you seek professional advice from a qualified financial advisor.
Depending on your personal circumstances and preferences an advisor will be able to find the best solution to optimise your taxes and look after your wealth. They will also look into possibilities of transferring your pension into QROPS, which can save you a considerable amount in taxes or/and investing your money into offshore portfolio bonds for example.
More so, you will need professional help with your will, otherwise your Spanish assets might be taxed twice – in Spain and in the UK – if no special arrangements have been created. Get expert advice and ensure your will is correctly structured to protect your estate and your beneficiaries.
You can find more detailed information on all money matters in our Banking and Investments Abroad Guide.
For detailed pension options abroad, please, read Pension Abroad: Understand Your Overseas Retirement Income Options.
Healthcare is an important element of our life; it is especially true for retired people who wish to reside abroad. So if you have decided to retire to Spain, the good news is – healthcare there is generally of a high standard, and there are ways to make it relatively inexpensive too.
In general, Spanish hospitals and surgeries are very good, with modern facilities, low waiting times and excellent service.
Nurses, doctors and medical staff are well trained and have access to state-of-the-art equipment. Many of them speak enough English – however, if your case is complicated and your level of Spanish is low, it is advisable to take along somebody who can translate for you.
As an EU and EEA retiree in receipt of state pensions from your home country, you are entitled to the same provision of healthcare in Spain as Spanish pensioners. For this you should apply for an S1 form prior to your move to Spain.
S1 Form and Social Security Card
If you are in receipt of a state UK pension, and wish to retire to Spain, you may be entitled to state healthcare paid for by the UK. For this you need to get an S1 (E121) form.
You can apply for your S1 form via the International Pension Centre on 0191 218 7777.
When in Spain, register the form at your local social security office, where you will be issued with a social security card. The card needs to be presented every time you visit your local surgery or hospital.
It can take quite long for your social security card to be issued, so if meanwhile you find yourself in need of medical attention, take with you all the papers that prove that you have applied for your social security card, and pay a visit to the surgery.
Once you have registered your S1 in Spain, you will be entitled to apply for and use a UK-issued EHIC to access state-funded necessary medical treatment when you visit other EEA countries outside Spain, including when you return to the UK.
Public Health Insurance
If you are not covered for state-run healthcare (if you are an early retiree, for example), you can join a special pay-in scheme offered by the Spanish regional health authorities. This scheme – Convenio Especial – is a public health insurance system.
Under this scheme a policyholder pays a monthly contribution to get access to public healthcare across the country regardless of pre-existing conditions.
The basic monthly fee is 60€ for the under 65s and 157€ for those aged 65 and above. Basic rates won’t cover your prescription costs or give you the right to an EHIC, so if you wish to travel, you will need to take out private travel insurance.
Regions manage the scheme independently, so check whether your region has launched the scheme yet.
Private Health Care
There are plenty of private clinics and hospitals all over Spain. With private healthcare you get a greater degree of accessibility, more choice and less waiting time.
While it is still relatively inexpensive to pay out of pocket for any occasional treatment you take from a privately run clinic, it might quickly become a burden on your finances if you need a series of treatments or have a serious condition. In this case it is advisable to take out private health insurance.
Shop around for your health cover: there are plenty of local companies as well as international insurers, so make sure you get the cover that suits your needs and doesn’t cost over the top.
For more information on healthcare options when you retire abroad and tips on how to choose a health cover, read our Guide To Overseas Health Insurance & Healthcare Access.
Pharmacies and Prescriptions
Pharmacies are numerous in Spain, even a tiny village will have at least one, while in towns you can find several in the same street. Local pharmacies (farmacias) usually take turns to provide an out-of-hours service (at night and for holidays) as the farmacia de guardia.
Many drugs that are strictly prescription based in the UK (like antibiotics, for example) can be commonly available over-the-counter in Spain. The cost of medicines is usually lower than in other countries due to state imposed price restrictions.
Medicines and drugs are only available from pharmacies.
You will be required to pay a certain percentage of your prescribed medication costs depending on your personal circumstances. Pensioners usually pay around 10%, but do get advice from your local health centre.
The pharmacists there are also trained to provide treatment advice for a number of minor illnesses.