Spain has long been a popular destination for expats seeking a sunny and relaxed retirement. The country offers a high quality of life, affordable living, excellent healthcare, and a rich cultural history. However, before making the move, it’s crucial to understand the legal considerations for retiring in Spain as an expat. In this article, we will discuss the top legal aspects you need to consider, including residency, taxes, healthcare, pensions, and property ownership.
Obtaining Residency in Spain
Before retiring in Spain, you must obtain the appropriate residency permit. There are several residency options available for expats, but two of the most common are the Non-Lucrative Visa and the Golden Visa.
Non-Lucrative Visa
The Non-Lucrative Visa is designed for individuals who have sufficient financial means to support themselves without the need to work in Spain. To qualify for this visa, you must meet the following requirements:
- Proof of sufficient financial means to support yourself and any dependents for at least one year without working in Spain.
- Have no criminal record in Spain or any other country where you have resided during the past five years.
- Hold valid health insurance coverage in Spain.
- Provide a medical certificate confirming that you do not suffer from any diseases that pose a threat to public health.
Golden Visa
As mentioned earlier, the Golden Visa program is an attractive option for non-EU/EEA/Swiss nationals who wish to invest in Spain. If you plan to retire in Spain and can make a qualifying investment, the Golden Visa can be a viable option for obtaining residency. Please refer to the previous section for more details on the Golden Visa requirements and application process.
Taxation for Expats Retiring in Spain
As a retiree in Spain, you need to be aware of the various taxes you may be subject to:
Income Tax
When you become a tax resident in Spain, you will be subject to Spanish income tax on your worldwide income. The income tax rates for residents are progressive and range from 19% to 45% depending on your income level.
Wealth Tax
Spain imposes a wealth tax on the net value of your worldwide assets, including real estate, investments, and other assets. The tax rate varies depending on the value of your assets and the region in which you are a resident. Some regions offer exemptions or reductions for certain assets or situations.
Inheritance and Gift Tax
In Spain, inheritance and gift tax is levied on the recipient of the assets, and the tax rates vary depending on the relationship between the donor and the recipient, the value of the assets, and the region in which the recipient is resident.
Access to Healthcare
As a retiree in Spain, it’s essential to ensure that you have access to healthcare services. If you are a resident in Spain and receive a state pension from an EU/EEA country or Switzerland, you may be entitled to access the Spanish public healthcare system. Alternatively, you can obtain private health insurance to cover your healthcare needs.
Pensions and Social Security
When retiring in Spain, you need to consider how your pension will be affected. If you receive a state pension from your home country, it may be possible to have your pension paid directly to you while living in Spain. However, this depends on the regulations and agreements between Spain and your home country. It’s essential to check with the relevant authorities in your home country to confirm the process for receiving your pension while living in Spain.
For expats who have worked in Spain and contributed to the Spanish Social Security system, you may be eligible for a Spanish state pension. The eligibility criteria include having contributed for a minimum of 15 years and being at least 65 years old (with some exceptions for early retirement).
Property Ownership and Rental Regulations
If you plan to buy or rent property in Spain, it’s essential to understand the legal aspects of property ownership and rental regulations. Some key points to consider include:
- Property registration: Ensure that the property you intend to buy is correctly registered with the Spanish Land Registry and that there are no outstanding debts or legal issues associated with the property.
- Legal representation: It’s advisable to hire a lawyer who specializes in Spanish property law to assist you with the property purchase process and ensure that all legal requirements are met.
- Rental regulations: If you plan to rent a property in Spain, familiarize yourself with the local rental regulations and tenant rights. This includes understanding the standard rental contract terms, security deposit requirements, and the rights and responsibilities of both landlords and tenants.
Estate Planning and Wills
When retiring in Spain, it’s essential to consider estate planning and ensure that your assets are distributed according to your wishes upon your death. This includes:
- Creating a Spanish will: Having a Spanish will in place can help simplify the probate process and ensure that your assets in Spain are distributed according to your wishes. A local lawyer can help you draft a Spanish will that complies with local laws and regulations.
- Understanding forced heirship: Spanish inheritance law includes forced heirship provisions that require a portion of your estate to be distributed to specific family members, such as your spouse and children. It’s essential to be aware of these provisions and plan your estate accordingly.
- Double taxation agreements: Spain has double taxation agreements with several countries to avoid the double taxation of assets and income. Check whether such an agreement exists between Spain and your home country to minimize potential tax liabilities on your estate.
