Retiring to Spain on the non-lucrative visa, pension and tax questions first

Terms used

• IPREM — The IPREM is the public income index Spain uses to set limits for benefits and aid: €600 a month in 2025.
• arraigo — Arraigo is a route to a residence permit based on how long you have lived in Spain.

Key rules

• Pension as proof: Foreign pension income counts for the funds test, but each consulate sets its own document requirements.
• Tax residence: Spending more than 183 days a year in Spain, or having your main base there, makes you a Spanish tax resident.
• Permit and tax: Your permit does not create tax residence, and tax residence does not need a permit.
• Renewal funds: You must show sufficient means again at the first renewal, and a shortfall can lead to refusal.

Your pension counts as income, but proof varies by consulate

Foreign pension income counts towards the funds test, and it is one of the most accepted forms of proof. Your consulate decides exactly what it wants to see. Get its checklist before you collect anything. Ask in particular whether it wants translations, an apostille or legalisation, and proof that your pension is lifelong.

Expect to become a Spanish tax resident

Your days and your life in Spain decide tax residence. You are Spanish tax resident if either of these is true:

• You spend more than 183 days in Spain in a calendar year.
• Your main base or centre of economic interests is in Spain.

Short trips abroad still count as time in Spain unless you can prove tax residence elsewhere. A spouse and dependent children living in Spain can also point towards residence. If you live in Spain most of the year, assume you will be resident and taxed on your worldwide income. If two countries both claim you, the tax treaty between them breaks the tie. Special regimes such as the Beckham law are not open to non-lucrative visa holders.

How your pension is taxed

Once you are resident, Spain generally taxes a foreign pension as employment income in the IRPF, at progressive rates. Many treaties tax private pensions only in the country where you live. Government service pensions are often taxed only by the paying country. Social security pensions are treated differently from treaty to treaty. Tax you pay abroad can be credited against Spanish tax, so you should not be taxed twice on the same income. The treaty between Spain and the country paying your pension decides, so read it before you move. An adviser who knows both countries is worth paying for here.

Plan for the first renewal now

At your first renewal you must show again that you can live in Spain without working. The benchmark is set as a multiple of the IPREM, the public income indicator. It is 400% of the IPREM a year for the main applicant, plus 100% for each family member; the amounts are on how Spain counts your money.

The office looks at the means you held during your permit period. File the renewal on form EX-00 from 60 days before your permit expires until 90 days after it expires; filing after expiry can bring a fine, and after the 90 days the permit lapses and you start again. The renewal fee is 16 euros, paid with modelo 790 código 052, and the new card costs 16 euros, paid with modelo 790 código 012. The second permit lasts 2 years. Keep recent bank statements, pension or income evidence, and proof that your private health insurance continued. If your income is regular passive income such as pensions, rent or dividends, say so clearly in your application.

Choosing between options

What do you do if your funds may fall short at renewal?

• Renew on passive income: Fits if regular income such as a pension, rent or dividends meets the requirement for your household size.
• Change status: Fits if you qualify for work or self-employment, a family-based residence, an arraigo route, or a digital nomad or highly qualified visa.
• Long-term residence: Fits after five years of legal residence; it has its own means requirement.

If your income and savings cover the requirement for your household, renew; if not, change status before the permit runs out. If a renewal is refused, you can appeal by recurso de reposición within 1 month or in the courts within 2 months.

Documents you need

• Official letter from your pension payer or social security body showing your gross monthly pension. Recent, and translated and apostilled or legalised if it is a foreign document.

• Bank statements showing your pension payments arriving. Recent, and translated if foreign.

• Proof that your pension is lifelong, if your consulate asks for it.