How to Retire in Spain as an American

Retiring abroad holds a unique appeal and Spain has long been a top choice for Americans to retreat due to its unique blend of culture, cuisine, and climate matched with a relaxed, affordable lifestyle.

Why Spain?

A report by Global Citizen Solutions outlined Spain as the top destination for Americans to retire, with a perfect score of 100 out of 100 in quality of life, economics, integration and acceptance:

Affordable Cost of Living: Living expenses, including utilities, groceries, and dining out, are generally lower than in the U.S., making monthly budgets more manageable.
Mediterranean Lifestyle: Spain offers a lifestyle focused on socializing, community, and fresh, healthy food, contributing to a longer and happier life.
Diverse Climate Options: With climates ranging from year-round warmth to cooler summers, Spain has regions to suit any preference.
Gateway to Europe: Spain’s excellent connectivity to other European countries makes it easy to explore the rich cultures and histories of the continent.
Convenient Flights to the US: Direct flights from Barcelona and Madrid to multiple U.S. cities make visiting loved ones easy. Affordable internal flights simplify travel within Spain.
Reliable Public Transport: Spain’s public transportation is convenient for those who prefer not to drive. After six months, foreign drivers must obtain a Spanish license, which includes a theory and practical test.
Accessible High-Quality Healthcare: Spain provides quality healthcare for residents. While most visas require private insurance, it’s typically more affordable than in the U.S. and often offers quicker service and bilingual support.

Navigating Spanish Residency Visa Options

The most common visa for retirees is the Non-Lucrative Visa, allowing people who will not be working to reside in Spain, as long as they can demonstrate sufficient income or savings and have valid health insurance. The visa can also be extended to partners, spouses, and dependent children/relatives.

This visa can be renewed annually, and after five years can lead to permanent residency. Since the application process can be complex, we recommend consulting a lawyer experienced in helping Americans retire in Spain to navigate the paperwork smoothly.

Tax Considerations

U.S. citizens must file a tax return no matter where they live. Fortunately, a tax treaty between Spain and the U.S. prevents double taxation, making it easier to manage retirement finances.

Inheritance tax is also an important factor. Spain taxes inheritances and gifts for both residents and non-residents, though residents are taxed on worldwide assets, while non-residents are only taxed on assets within Spain. The tax rate is progressive, ranging from 7.65% to 34% depending on the inheritance or gift’s value.

To navigate these complexities and manage retirement income effectively, it’s essential to work with a tax advisor familiar with both Spanish and American tax laws.

Moving Your Belongings

Due to Spain´s geography, it is one of the largest transportation hubs in the world. This makes it even easier to ship your belongings to your new home via air, train, sea, or road.

The most cost-effective and popular method is via sea but this will take months. Air is another good option, but is the most expensive of all.

Most retirees qualify for a transfer of residence exemption, allowing them to bring belongings duty-free. To qualify, you’ll need to provide proof of establishing residency in Spain, typically with documents like residency permits.

Specific documentation is required for customs, so it’s best to confirm these details with a lawyer beforehand to ensure a smooth transition.

Creating Community

Spain’s Mediterranean culture is deeply social and community-oriented, but the language difference can feel daunting for newcomers. Fortunately, there are many resources to help expats connect and build friendships:

Facebook Groups: Most towns have local expat groups on Facebook where you can meet people from all over the world who’ve also made Spain their home.

Meetup.com: This platform offers a variety of local events, helping you find people with similar interests and hobbies.

Sports Clubs: From tennis and golf to the popular Spanish sport of padel, there are many sports clubs across Spain where you can stay active and meet new friends.

Members’ Clubs: Exclusive social clubs, like the historic International Arts Club (IAC) and the trendy Soho House, offer structured ways to meet people and build a community.

These resources make it easier to enjoy the social aspects of life in Spain while forming meaningful connections.

Finding a Home

Since 2005, Lucas Fox has been helping people find their dream homes and guiding American clients through pathways to retirement in Spain. With linguistic and cultural differences, we are on hand to help navigate this new sphere and make it even easier to find the perfect place, whether an apartment in metropolitan Madrid or a coastal retreat on the Costa Blanca.

If you are looking to retire in Spain, contact us to speak to an advisor.