Benefits, daily expenses, taxes and best locations to live in Spain

Benefits, daily expenses, taxes, and best locations to live in Spain.

Sun, sea, sand and sangria, Spain looks like the ideal place to retire. But is it really what it seems? If, for example, you'd rather go to the opera and dine out than sunbathe on the beach, is this country worth considering, or would it be better to opt for cultural capitals like Paris and Berlin?

Spain tops the list according to several surveys. For example, the Blacktower Financial Managers group named it the best place in Europe to retire; positive factors contributing to this title are climate, cost of living, real estate prices, security and the ratio of retirees to population. Business Insider ranks Spain 10th in the world, but the list is counterbalanced by Central and South America.

The factors that make Spain an ideal place to retire are many.

• Sunshine. The climate is good, especially in the southernmost regions of the country, where most people choose to spend their retirement. (Of course, the northernmost provinces, such as Galicia, Navarra and Asturias, have rather cold winters).
• Low cost of living and relaxed lifestyle. Good local wine and sherry and excellent tapas are part of the Spanish charm.
• In the tourist areas you will find fantastic leisure facilities such as golf courses, beaches, swimming pools and water parks. In addition, Spain offers breathtaking hiking trails.
• Spain is a fascinating country, rich in ancient cathedrals, palaces, Roman ruins, picturesque towns and cities. The Prado in Madrid and the Guggenheim Museum in San Sebastian boast some of the most famous art collections in Europe.
• You are in good company. Spain has a large expatriate community: for example, more than 330,000 British citizens live here year-round and, of course, there are increasing numbers of pensioners who spend much of the year in Spain but do not consider themselves residents. In most tourist areas English is spoken in almost all stores and restaurants.

The cost of living in Spain.

Spain is one of the cheapest countries in Europe. Numbeo ranks it 18th among European nations: 26% cheaper than France and 16% cheaper than the UK, but slightly more expensive than Portugal. Although not as cheap as destinations such as Bulgaria, Georgia or Albania, it represents a good mix of good infrastructure, including an excellent healthcare system, and low prices.

How long does it take to live well and retire in Spain?

The first good news is that real estate is still cheap (unless you want to live in Madrid or Barcelona). You can buy an apartment in a resort from €50,000 or a villa for €100-150,000. If you are willing to commit to reform, you can find rustic fincas to reform at very low prices (but you will have to make sure that the cadastre allows the reform you want before buying). Even in sought-after Mallorca, you can buy a two-bedroom house for around 150,000 euros.

If you have decided to sell your home to buy a property in Spain, you could set your sights a little higher: for example, by selling a one-bedroom apartment in London you could buy a three-bedroom villa with a swimming pool, or you could keep the difference and use it to lead a more expansive lifestyle.

The U.S. pension organization AARP estimates that, in most Spanish cities, it's possible to live a comfortable lifestyle on 25,000 euros a year. If you're frugal, or simply don't spend as much on leisure and dining out, you can live on a slightly lower budget. (For Barcelona and Madrid, however, you'll need a bit more money: they're expensive places to live, more comparable to cities like London, Paris or Berlin than to other Spanish cities.)

In addition, if you own a property outright, the costs will be even lower. Numbeo, which compares living costs in various cities around the world, calculates that a person can live in Spain on just 547 euros a month (excluding rent).

Daily expenses, health and discounts

Local taxes are low. Spending is cheap, as long as you don't necessarily want to buy typical local products (imported ones can be expensive). Basic services amount to about 98 euros per month, to which you have to add 40 euros for an Internet + TV package, which costs about the same as in Europe as a whole.

Eating out costs between 10 and 30 euros in a cheap or mid-range restaurant, while a beer costs a few euros, so you can go out for tapas all you want without going broke.

Spanish healthcare is generally very good and, if you are a resident, you can use the services of the public health system. EU citizens are covered by reciprocity agreements between countries, while those working in Spain are covered by their own contributions. However, if you are a non-EU citizen or worker, you can apply for the Special Agreement and benefit from the public health system for 60/157 euros per month (under/over 65 years old), less than 2,000 euros per year: a significant price, but not so excessive.

 State of residence and taxes

A resort may be the ideal place to buy a retirement home, especially if you are interested in sports. For example, if you enjoy golf, an apartment in the resorts of La Manga or PGA Catalunya could be right for you. Water sports are practiced in all coastal resorts. However, you should be careful not to underestimate the prices of services when calculating your budget.

Many pensioners spend only part of the year in Spain. However, if you want to live here, you will have to think about the bureaucracy: even EU citizens will have to obtain a residence card. If, on the other hand, you are a non-EU citizen, you will have to obtain a so-called "golden visa" by buying a property worth 500,000 euros or more, or obtain a non-profit visa that allows you to live, but not work, in Spain on an extended basis. The first will be for one year, then you will have to renew it every two years: after five years you will be able to apply for permanent residence. Obtaining the visa can take a long time, so it is best to start applying at least six months before you move. Also, even if you can live on less, the minimum income required to apply for a pensioner visa is 25,560 euros per year (plus 6,390 euros for each additional family member).

Once you are resident in Spain, you will also have to pay taxes here. Spain has a double taxation treaty with more than 90 countries, so if you have to pay tax on your pension, investment or rental income in your own country, you will be able to settle it in Spain. Tax rates and thresholds vary from region to region: generally, a tax rate of around 20% is paid on the first 12,000 euros of income, while the rate can be as high as 48% for incomes above 175,000 euros (in Catalonia) or 120,000 euros (in Andalusia). This may seem worse than in other tax regimes. However, each person is entitled to an exemption of €5,500, which increases to €1,150 once they reach the age of 65.

So yes, retiring in Dubai or Andorra they would pay less (0 tax rate). But would they enjoy it in the same way, could they afford the same lifestyle with the same budget? The answer is: almost certainly not.

Cost of living and taxes in Spain.

Those who live in Spain for more than 183 days are considered tax residents and, therefore, must pay IRPF, even if they do not have a permanent residence permit. First of all, it is good to know that Italy and Spain have signed an agreement to avoid double taxation. However, it is advisable to consult an accountant to know how to behave according to the current regulations, especially if you work in Spain and are not registered in AIRE.

The personal income tax rates are progressive and are as follows:

• 19% up to 12,450;
• 24% from €12,450 to €20,200;
• 30% from 20.200€ to 35.200€;
• 37% from €35,200 to €60,000;
• 45% from €60,000 to €300,000;
• 47% of 300,000.

Cost of living in Spain.

The cost of living in major Spanish cities tends to be lower than in large cities such as Rome and Milan. In addition, local purchasing power appears to be higher; this is because Spanish net salaries tend to be higher than Italian net salaries.

Unfortunately, the unemployment rate is 15.53% and this greatly affects job opportunities for foreigners. However, this is a national average. Being a very heterogeneous country, it is worth noting that job opportunities are greater in cities such as Barcelona and Madrid, while in other cities in the country there may be far fewer jobs available.

The cost of living always varies according to lifestyle and real salary. To get a more complete picture, we have compared the average cost of living in Madrid and Barcelona with that of other cities around the world:

Health system in Spain.

Life expectancy in Spain is around 83 years, one of the highest in the world, fourth only to Japan, Switzerland and South Korea. Spain has a mixed public-private system, considered among the best in the world. Public care is financed by taxpayers' taxes and state coffers.

Public health care is accessible free of charge to all residents in Spain and is decentralized, i.e. managed by the autonomous communities. All EU residents with a European Health Insurance Card (EHIC) have free access to public centers in Spain, even if they do not reside in the country but are temporarily staying there.

If you are a foreigner, but not a resident of an EU country, you are still entitled to free health care if:

• You have a Spanish pension;
• They receive subsidies from the Spanish State and live in the country;
• You are a student in Spain and you are under 26 years old.

In some cases, foreigners who decide to live in Spain take out insurance, which gives access to private facilities, at a cost usually not exceeding 200 euros per month. For more information, consult the insurance companies active in Spain.

Security in Spain.

In recent years, overall security in Spain has improved considerably and the crime rate is among the lowest in Western Europe. The perception of the existence of corruption is not so high; in fact, according to Transparency International's Corruption Perceptions Index, Spain ranks 32nd out of 180 countries.

However, it is worth mentioning that the homicide rate is one of the lowest in the world, with 0.6 intentional homicides per 100,000 inhabitants.

Living in Spain as a pensioner.

Some Italian pensioners decide to move to Spain and enjoy their pension there. Are there also fiscal reasons behind this choice? Certainly Spain is attractive for Italian pensioners, as Portugal has been for several years.

In Spain a pension of 1,500 euros is taxed at 9.5%, while in Italy with the same amount the taxation is around 20%. Moreover, the cost of living in Spain, as we have already seen, is lower than in Italy, despite having the same currency. must pay a pension tax of 9.5%, which is significantly lower than in Italy, which is currently 10%.

In order to be able to transfer the pension from Italy to Spain and thus be taxed only in Spain, certain requirements must be met:

• Must have a private pension;
• have a bank account in Spain;
•  own or rent a property in Spain;
• being physically present in Spain at least 183 days a year;
• be registered with AIRE (Anagrafe degli italiani residenti all'estero).

In any case, before proceeding with the transfer of the pension we advise you to consult with a manager to check if you really have all the requirements and what bureaucratic procedures you must follow.

How to obtain a visa and Spanish nationality? .

As an Italian citizen you do not need a visa to travel to Spain. In principle, you can stay in Spain for a short period. However, if you wish to move for a longer period, you must register with the Spanish civil registry (Documento de Empadronamiento) and obtain a NIE, or foreigner's identity number (Número de identidad de extranjero).

All non-EU citizens need a passport to enter Spain, with the exception of citizens of Switzerland, the United Kingdom or a member country of the European Economic Area. Non-citizens wishing to live more than 90 days in an EU country must apply for a Schengen visa (valid for all EU member states) for one of the following reasons:

• business;
• study;
• work;
• Family reunion.

The visa obtained must be converted into a residence permit.

Documents required to live in Spain.

BlockHowever, even if you are an Italian citizen and wish to move for a longer period of time, you must register with the Spanish civil registry (Documento de Empadronamiento) and obtain the NIE, or foreigner's identity number (Número de identidad de extranjero).

First, you must register with the Documento de Empadronamiento, which you will need to:

• get a house for rent;
• work;
•  access to Spanish healthcare;
• apply for a tax refund if you have paid more than you owed;
• some social benefits

You can then go to an Italian police station or consulate and apply for the NIE (Número de Identidad de Extranjero), or non-resident certificate, which costs about 10€. The NIE is a formal declaration that a person does not live in Spain but nevertheless has a relationship with the country. It is used to identify non-residents who have personal property or business assets in Spain, such as a bank account, registered company or property.

How to obtain Spanish nationality.

You can obtain Spanish nationality in several ways, but first you must have lived legally in Spain for at least 10 years, although there are exceptions. In fact, if you have refugee status, the years are reduced to 5; they are reduced to 2 years if you come from Portugal, Andorra, the Philippines, any of the South American countries and Equatorial Guinea.

You can also obtain Spanish nationality in just one year if you meet the following requirements:

• anyone born in Spain;
• anyone who has been married to a Spanish couple;
• widower of Spanish citizen, if at the time of departure the couple was not legally separated;
• who is under the guardianship of a state institution or guardian for at least two consecutive years;
• who was not born in Spanish territory, but at least one of the two parents is a Spanish citizen.

To obtain the nationality it is necessary to pass a language test, called DELE A2. Those coming from Spanish-speaking South American countries do not have to take the test. In addition, it is necessary to pass a cultural test, called CCSSE. Those who have completed high school or baccalaureate do not have to take this test.

Living in Spain: pros and cons.

Spain is undoubtedly one of the best destinations for Italians who want to move abroad, especially for its geographical and cultural proximity. Let's see what are the pros and cons of living in Spain for foreigners.

Pro.

• Cultural and geographical proximity to Italy.
• Lower cost of living in Spain than in Italy.
• Although the cost of living is lower, average wages are higher. Therefore, the purchasing power of a Spanish citizen is higher than that of an Italian citizen.
• Multicultural and heterogeneous country from North to South.
• Italian citizens may travel to Spain without applying for a visa.
• Public health care accessible to all residents.

Counter.

• Not all cities offer good job opportunities;
• It takes about 10 years to obtain Spanish nationality.