Spain or Portugal for retirement

Terms used

• Patrimonio — Patrimonio is the yearly wealth tax on what you own above an allowance.
• Solidarity tax — The solidarity tax is an extra yearly tax on very large fortunes.
• IPREM — The IPREM is Spain's public income index, set yearly, used to set the income level for the non-lucrative visa.
• IRPF — The IRPF is Spain's personal income tax.
• Convenio especial — The convenio especial is a paid scheme that lets residents without Social Security work join Spanish public healthcare.
• Empadronamiento — Empadronamiento is your registration at the town hall where you live.
• Modelo 720 — Modelo 720 is the Spanish declaration of assets held abroad.
• IMI — The IMI is Portugal's yearly municipal property tax.

Key rules

• Spanish visa income: The Spanish non-lucrative visa needs 400% of the IPREM a year for you and 100% for each dependant.
• Portuguese visa income: The D7 visa needs monthly income at least equal to the Portuguese minimum wage.
• Inheritance: Portugal has no inheritance tax, while Spain's depends heavily on the region.
• Spanish healthcare: Public healthcare through the convenio especial needs at least one year of registered residence.

The short answer

Neither country is better for everyone. Portugal's D7 visa asks for less income and Portugal has no inheritance tax. Spain can cost your heirs much less or much more, depending on the region. Healthcare access is also easier to plan in Portugal's favour only if you qualify for its system; in Spain you need private insurance first.

Retirement visa routes

Spain (non-lucrative visa). You must show savings or passive income of 400% of the IPREM a year for the main applicant, and 100% for each dependant. The 2025 IPREM was €7,200 a year, which meant about €28,800 for you and about €7,200 per dependant. Check the current IPREM figure for 2026 before you apply. You also need private health insurance with no co-payments, a clean criminal record and a medical certificate.

Portugal (D7 visa). You must show monthly passive income at least equal to the Portuguese minimum wage. That was €870 a month in 2025 and about €920 in 2026. A spouse needs 50% of that and each child 30%. Expect to show savings worth 12 months of income and proof of accommodation, such as a lease or property deed. The permit is for 2 years, then renewable for 3.

Tax on your pension

Spain. As a tax resident you pay IRPF on your worldwide income, including foreign pensions, at progressive state and regional rates. Under most treaties a private pension is taxable only in Spain. Government service pensions are often taxable only in the paying country, and the UK treaty works this way. State pensions are taxed in Spain. You claim treaty relief with residence certificates, and foreign tax paid can be credited against Spanish tax. Foreign assets over €50,000 must be reported on Modelo 720.

Portugal. Residents are taxed on worldwide income at progressive rates. The old 10% pension rate for new residents is closed and no longer available to new retirees, so expect general rates. Treaties decide which country taxes each pension type. Ask the Portuguese Tax Authority for the current IRS bands.

Healthcare

In Spain, visa holders without a job must keep private insurance during the visa. After at least one year of registered residence you can join the public system through the convenio especial. In recent years the fee has been about €60 a month under 65 and about €157 at 65 and over. Fees vary slightly by region. To get a health card from your regional health service you need empadronamiento.

Wealth tax

Spain. Impuesto sobre el Patrimonio applies to your worldwide net assets as a resident. The state scale runs from 0.2% to 3.5%, with an exemption of €700,000 per person plus €300,000 for your main home. Regions can change this, and some, like Madrid and Andalucía, give a 100% rebate. A separate solidarity tax applies to net wealth above €3 million, at 1.7% to 3.5%.

Portugal. There is no general wealth tax. Property owners pay IMI at 0.3% to 0.45% on urban property, plus AIMI on property worth over €600,000 per owner, at 0.7%, rising to 1% and 1.5% in higher bands.

Inheritance tax

Spain. Inheritance tax (ISD) runs from 7.65% to 34% on the state scale, and multipliers can raise the effective rate to 81.6%. Many regions, including Madrid and Andalucía, give a rebate of 99% or more for close relatives. The region that applies is generally where the deceased lived. Ask your chosen region about its rules before you settle.

Portugal. There is no inheritance tax. A 10% stamp duty applies to gratuitous transfers, but spouses, descendants and ascendants are exempt.

Which to choose

• Choose Portugal if your income is modest and you want no inheritance tax for close family.
• Choose Spain if you can place yourself in a region with strong tax rebates, or if you prefer Spain's lifestyle and services.

The documents, checklist and questions below help you prepare.

Documents you need

• Private health insurance from a Spanish insurer with full Spanish cover, no co-payments and no waiting periods, for a Spanish non-lucrative visa.

• A clean criminal record certificate for a Spanish non-lucrative visa.

• A medical certificate for a Spanish non-lucrative visa.

• Proof of savings or passive income for the Spanish non-lucrative visa, set as a share of the yearly public income index (IPREM) for you and each dependant.

• Empadronamiento, your registration at the town hall, which you need to get a health card from the regional health service.

• Proof of accommodation for the Portuguese D7 visa, such as a lease or a property deed.

• Proof of passive income for the Portuguese D7 visa, at least equal to the Portuguese minimum wage each month, plus savings worth 12 months of income.

• Residence certificates from your country of residence, to claim treaty relief on a foreign pension in Spain.

Checklist

• Work out your yearly passive income and compare it with the Spanish non-lucrative visa level of 400% of the IPREM, plus 100% for each dependant.

• Compare your monthly income with the Portuguese minimum wage for the D7 visa, with 50% extra for a spouse and 30% for each child.

• Confirm you can show savings worth 12 months of income for the D7 visa.

• Ask the Portuguese Tax Authority for the current IRS bands, because the 10% pension rate for new residents has ended.

• Check whether you are over 65, because that sets the monthly fee to join Spanish public healthcare through the convenio especial.

• Confirm you will have one year of registered residence before applying for the convenio especial.

• Ask the region where you plan to live in Spain about its inheritance tax rebate for your heirs.

Frequently asked questions

Does Portugal have a wealth tax or inheritance tax for retirees?

Portugal has no general wealth tax and no inheritance tax, but it charges other taxes on property and gifts. Property owners pay the yearly municipal property tax (IMI) at 0.3% to 0.45% for urban property. An extra tax (AIMI) applies above €600,000 per owner, starting at 0.7%. Transfers to heirs bear 10% stamp duty, but spouses, descendants and parents are exempt.

Is Spain's inheritance tax a problem for my heirs?

It can be, because Spain's inheritance tax depends heavily on the region where the deceased lived. The state scale runs from 7.65% to 34%, and the effective rate can reach 81.6%. Many regions, such as Madrid and Andalucía, give a rebate of 99% or more for close relatives. Non-resident heirs from the EU or EEA can apply the rules of the region where the assets are.

Does Spain tax my foreign pension if I live there?

Yes, Spain taxes foreign pensions as work income at progressive rates once you are a Spanish tax resident. Most treaties let only your country of residence tax private pensions, while government service pensions are often taxed only by the paying country. Tax you paid abroad can be credited against your Spanish tax.

Does Spain's wealth tax apply to me as a retiree?

Yes, Spain's wealth tax can apply to you, but the first €700,000 of net assets is exempt per person, plus €300,000 on your main home. Rates run from 0.2% to 3.5%.