Financial Planning Considerations for Americans Moving to Spain

Spain is the most popular destination in Europe for Americans planning on moving to Europe in 2024. If you’re based in the States and are contemplating a relocation to Spain however, there are several aspects of financial planning that you should consider before you move, including brokerage, tax, banking, property, and estate planning considerations. In this article, we provide an overview of these factors to help guide your planning as you prepare for your move.

1. US brokerage accounts and retirement plan considerations

As an American living in Spain, you’ll be subject to both US and EU financial regulations. This has multiple implications. For example, EU rules prohibit EU residents from investing in funds that don’t have an EU format info sheet, which includes most US investments, while many EU funds can trigger complex US reporting and sometimes US taxes. Furthermore, many US banks and brokerage firms won’t work with clients who live overseas. Seek advice from a US expat specialist financial advisor before you move, who will be familiar with the ramifications of investing as an American living in Spain, and how best to restructure, if necessary, based on your personal situation.

In terms of US retirement plans, Americans living in Spain can receive distributions, however Spain may not recognize the tax benefits of some US retirement plans, so distributions may be taxable in Spain. Dollar/Euro currency exchange rates will also impact contributions sent to the US from Spain, and vice versa for distributions.

2. US taxation

For Americans, unlike almost every other nationality, taxation is not based on where you live, but on your citizenship. This means that you are still subject to file US taxes to the IRS on your worldwide income after you move to Spain and you will also be subject to Spanish taxes if you qualify for Spanish tax residency.

You will also need to report your non-US bank accounts and investments to the IRS by filing a Foreign Bank Account Report (FBAR), and sometimes IRS Form 8938 too, depending on the value of your investments.

To avoid double taxation, you can claim the IRS Foreign Tax Credit when you file your US taxes based on the amount of Spanish income tax you’ve paid. Consult a US expat tax expert to discuss the best approach to filing as an expat given your circumstances.

3. Spanish taxation

As mentioned, if you qualify for Spanish residency, you’ll have to pay Spanish taxes. If you are employed by a Spanish Company, you may benefit from the Beckham Law, a special Spanish tax regime for expats that involves paying lower rates of income tax for the first 6 years you live in Spain. Spain also has a wealth tax that is applied to the global assets of Spanish tax residents. The rates vary depending on which region of Spain you live in. Real estate counts towards this tax, although there are some wealth tax exemptions which vary depending on the region you live in. You will also need to report your non-Spanish assets to the Spanish tax authorities on a form called Modelo 720.

4. Banking

Most US expats try to retain their US bank account while also opening an account in Spain. Some Spanish banks, such as Banco Sabadell and Santander, will allow you to do this from the States. Banco Sabadell has a branch in Miami, and you can open an account with a passport before you have a Spanish tax identification number (NIE). Another option is to open an online account to begin with, such as with Revolut or a Wise multi-currency account.

5. Real estate

Purchasing real estate worth over €500K can let you access Spain’s Golden Visa, although this will end as of 3rd April 2025, with only other types of investments qualifying. If you’re intending to sell real estate in the US to fund a purchase in Spain, we recommend selling your US property before you move, as once you’re a Spanish resident, any gains on the sale will become liable to Spanish capital gains tax..

Note that the process of buying real estate is different in Spain compared to the US, so seek advice from an English-speaking realtor in Spain from the off.

6. International money transfer

When it comes to transferring money between the US and Spain, it is advisable to consult a specialist currency broker such as Lumon or firms such as Wise and Moneycorp rather than transferring directly from your bank, which can save thousands of dollars in fees. This is advisable for both smaller and larger amounts, and regular or one-off transfers.

7. Insurance

You will need private health cover to begin with as part of your visa application, although at some stage as a resident you will become eligible for the Spanish national healthcare (Sistema Nacional de Salud) as a Spanish resident. Many expats choose to retain global health insurance that also covers them if they travel as well as in the States when they visit.

8. Estate planning

If you’re planning to stay in Spain long term, you’ll need to have a will in both countries. Your expat financial advisor will be able to recommend Spanish and American attorneys who have experience working with expats and cross-border wills.

Moving to Spain is a great experience, and the rest of Europe is also right on your doorstep to explore. However, to ensure a smooth move and keep your investments taxes optimized, always consult financial experts who specialize in working with US expats at the earliest opportunity.

This article is for informational purposes only; it is not intended to offer advice or guidance on legal, tax, or investment matters. Such advice can be given only with full understanding of a person’s specific situation.