Spain for a retiree, the fit questions that matter beyond the postcard

Terms used

• Solidarity tax — The solidarity tax is an extra yearly tax on very large fortunes.
• Convenio especial — The convenio especial is a monthly paid agreement with the Seguridad Social that gives access to public healthcare.
• INSS — The INSS is Spain's national social security institute, which registers pensioners for a Spanish health card.
• IRPF — IRPF is Spain's personal income tax, charged on residents' worldwide income.
• Impuesto sobre el Patrimonio — Impuesto sobre el Patrimonio is Spain's wealth tax on the total value of your assets, with allowances and rates set by region.

Key rules

• Visa income: The non-lucrative visa needs 28,800 euros a year for the main applicant and 7,200 euros for each dependant.
• Tax residency: Spending more than 183 days in Spain in a calendar year makes you a Spanish tax resident.
• Health cover: On the non-lucrative visa you need private insurance with no co-payments; residence alone does not give public healthcare.
• Region: Your region sets wealth and inheritance tax, and the gap between regions can be very large.

Start with the hard questions

Settle healthcare, pension tax, wealth and inheritance tax, and cost before you think about sunshine and lifestyle. Any one of them can change whether Spain works for you.

Healthcare: how you get covered depends on where you come from

Non-EU retirees on the non-lucrative visa must hold private health insurance with full cover and no co-payments. Residence alone does not give you the public system. After arrival you can keep private insurance or, once you have at least a year of registered residence, join the convenio especial. This is a paid monthly agreement with the Seguridad Social that gives access to public healthcare.

EU pensioners who draw a pension from another EU state can use an S1 form. The paying state covers the cost, and you register with the INSS to get a Spanish health card. UK pensioners covered by the Withdrawal Agreement may also be able to use an S1.

If you worked and paid contributions in Spain, you have public coverage as a pensioner.

Pension income and the visa

The non-lucrative visa is for people who do not work in Spain. You must show means of 28,800 euros a year for the main applicant, plus 7,200 euros a year for each dependant. Savings or regular passive income can prove it. The figure follows a yearly index, so check the current amount and the evidence your consulate wants before you apply.

Tax on your pension

You become a Spanish tax resident if you spend more than 183 days in Spain in a calendar year, or if your main activities or economic interests are based there. Short temporary absences still count as days in Spain unless you can certify residence elsewhere. Spain also presumes you are resident if your spouse (not legally separated) and dependent minor children usually live there.

Once you are resident, you pay IRPF on your worldwide income. Foreign private and state pensions are generally taxed as work income at progressive rates.

You should not be taxed twice. Double-tax treaties decide which country may tax:

• Private pensions are usually taxable only in the country where you live.
• Government-service pensions are often taxable only by the paying country, with exceptions for Spanish nationals or residents.
• Tax already paid abroad can be credited against your Spanish bill.
• Some pensions, such as certain social-security or war pensions, may be treated differently under a specific treaty.

Treaty wording differs by country and pension type, so read the treaty between Spain and your country, or ask an adviser, before you move.

Wealth and inheritance tax: your region matters

Residents pay Impuesto sobre el Patrimonio (wealth tax) on worldwide assets. The national allowance is 700,000 euros, plus 300,000 euros for your main home. Regions set their own allowances and rates. Madrid, Andalusia and some other regions give 100% bonuses that effectively remove the tax. A separate national Solidarity Tax on Large Fortunes applies above 3 million euros.

Inheritance and gift tax follows national rules, but regions set the reductions, rates and bonuses. Madrid, Andalusia and others give bonuses of around 99% for close relatives. Regions such as Valencia, Catalonia and Asturias are heavier. If you leave assets to children or a spouse, the region where you live can change their bill a lot. Check the current rules for your region before you choose where to settle.

What it costs to live

There is no single official figure. Rent or a mortgage drives most of the difference between places. Madrid, Barcelona, Palma and Málaga cost noticeably more than smaller towns and inland or southern areas. Build your budget from rent or mortgage, utilities, food, transport, leisure and health insurance if you are not in the public system. Compare current rents in the towns you like with the national statistics office's household spending data.

Then the lifestyle

Once healthcare, tax and cost work for you, compare towns on climate, distance to a hospital, transport and the expat community. Visit in winter as well as summer before you commit to a lease.

The questions below cover the points people ask most often.

Frequently asked questions

Can I use Spanish public healthcare on a non-lucrative visa?

Not through residence alone, because the non-lucrative visa requires private health insurance with full cover and no co-payments.

Can I use an S1 form for healthcare if I retire in Spain?

Yes, if you draw a pension from another EU state, or you are a UK pensioner under the Withdrawal Agreement, the paying state covers your costs through an S1 form. Register it with the INSS, Spain's social security institute, to get a Spanish health card.

Will my foreign pension be taxed twice if I become a Spanish tax resident?

No, foreign tax paid can be credited in Spain, and double-tax treaties decide which country may tax. Private pensions are usually taxable only where you live, while government-service pensions are often taxable only by the paying state. Spanish residents are taxed on worldwide income at progressive rates.

Does the region where I live change my wealth and inheritance tax?

Yes, regions set their own allowances, rates and bonuses, so the same estate can be taxed very differently. Madrid and Andalusia give 100% bonuses on wealth tax and around 99% bonuses on inheritance for close relatives, while Valencia, Catalonia and Asturias are heavier.