Retiring and moving anywhere on the Spanish coast is the dream of many foreigners. Spain’s peaceful towns and cities and the country’s desirable weather conditions make it a preferred destination for any pensioner. Their economic status allows them to enjoy their retirement in Spain peacefully.
The Costa Blanca is one of foreigners’ favourite destinations to retire in the south of Europe. Sunshine, local cuisine and peaceful coastal towns are the main attractions for foreign visitors, who immediately become fascinated by the Spanish lifestyle.
If you are putting together information to start planning your retirement in Spain, you will certainly enjoy this post. In it we will answer our clients’ most FAQs: “Do I need to become a Spanish resident?” “What taxes will I have to pay?” “Should I rent or buy a property?”, etc.
If you wish to stay in Spain for a shorter period than six months a year during your retirement, you will not be required to apply for residency, as long as you come from a Member State of the EU. If you are an EU citizen, you have the right to move and reside freely within the Union.
However, if you wish to stay any longer than six months a year, you will have to register as a Spanish resident. The only requirements you will need to meet in order to apply for Spanish residency are having full medical coverage in Spain and showing proof of income to afford the cost of living in the country without any other financial support (whether it be your own country’s pension, savings or other economic means).
If you obtain your permanent residency, you are allowed to stay in Spain indefinitely. You may be eligible for this visa after spending five consecutive years in the country and fulfilling all of your legal duties. Leaving the country for less than six months per year or for more than twelve months, if there is a reason of force majeure, shall not affect the granting of the visa.
You are entitled to spend 90 days a year in Spain with your tourist visa. However, if you wish to stay for longer periods of time, you will be required to obtain a Non-Lucrative Residency visa. This will allow you to remain in Spain for up to a year, as long as you do not partake in any economic activities. You may renew your visa for two years after that period, and then, after spending five years in the country, you will be eligible to apply for permanent residency.
You might also be interested in obtaining a Golden Visa in Spain (Investor Residency Visa). We issue all kinds of residence visas at our law firm. If you wish to be advised on the most suitable visa for you and your family, do not hesitate to contact us. – Joaquín Pons, Savloir CEO.
Foreign pensioners residing in Spain who are also tax residents here will be required to pay taxes if they receive income from other countries; for instance, if a German pensioner has moved to Spain for his retirement and his tax residency is here as well, he will be required to pay taxes in Spain for his German pension. Nevertheless, you should be properly informed about the list of countries with bilateral tax agreements, in order to avoid paying the same taxes twice.
Your retirement pension is considered earned income, and thus, foreign pensioners have to pay Income Tax, as long as they surpass the minimum wage threshold and are therefore required to file their income tax return.
You will only be required to file taxes in Spain if your earned revenue from other countries exceeds the amount of €22,000 from a sole payer, whether public or private.
If you obtain benefits from more than one payer and earn over €14,000, you will be required to file your income tax return in Spain and pay the Personal Income Tax, as long as the earned revenue from your second payer exceeds the amount of €1,500 per year.
In any case, as we mentioned before, you should become acquainted with the list of countries with bilateral tax agreements, so as to avoid paying taxes in two countries. As a friendly reminder, Spain has agreements with over 103 countries.