In Spain you can enjoy a retirement full of warm, sunny days, delectable food and wine, and plenty of cultural activities. Whether you want to live in the bustling cultural centers of cities like Barcelona and Madrid or retire to a quiet seaside village, Spain has something for everyone. With excellent infrastructure, a mild climate, and a relatively affordable cost of living, Spain is a sought-after retirement destination for many expats.
This guide will walk you through what you need to know to retire in Spain, including the best places to retire, and the cost of retiring in Spain.
Spain has no restrictions on foreigners owning property. It has long been one of the world’s most sought-after property destinations thanks to its great weather, relatively low cost of living, and friendly atmosphere. The official data on property sales show that the real estate recovery is in progress… and buyers and investors are making their move.
Unlike resort destinations like the Balearics (and other coastal and island locations), Spain’s big cities have diverse economies. Barcelona is a dream location, not just for the 1.6 million locals but also for the tourists and business visitors who flock there by the millions each year. This is a strong short-term rental market and a great opportunity for buy-to-rent investment.
Property in Madrid appeals to tourists, expats, and locals. In Madrid, foreign buyers make up a far smaller proportion of the market. Real estate here is dependent on Spain’s locals. A full recovery and return to growth will come to Madrid more slowly than to the tourism hotspots like Barcelona. When that growth does come, it will be less vulnerable to the ebb and flow of interest from fickle international buyers.
If you’re more interested in the resort towns, the Balearics are where to look. Mallorca is the grand dame of the Balearics. Despite being a hotspot for tourism for so many years, when you know where to look, you’ll find that the 1,405-square-mile island has managed to cling to much of its charm. The island gets an impressive 8 million visitors a year, mostly during the high season. While this renders some beaches extremely busy, it brings some key advantages. For one, the island’s infrastructure is superb. The road network is excellent, and the airport is large and extremely well-connected, especially for an island of this size. While prices are inevitably pushed upwards by the number of visitors, they drop down to the range paid by Spaniards elsewhere in the country when you move towards the center of the island.
All overseas buyers must have a fiscal identity number (NIE) before they can open a bank account or complete the purchase of a property. Apply for the NIE after arriving in Spain or via the Spanish Embassy or a consulate in your country of residence. Non-EU passport holders must make the application in person, but EU citizens can give their lawyer a power of attorney to do it for them. Opening a bank account is just a question of going into a bank and doing it. All that you need to take is your passport.
Buying costs vary depending on which autonomous region you are in and whether you are buying new or secondhand. Property purchase tax is levied on resales. Madrid lowered the purchase tax to 6% of the price paid to stimulate the market, while in Cataluña it’s a flat 10%, and figure on a sliding scale between 8% and 10% (based on price bands) in Andalucía. In the case of a new property, the purchase tax will be 1.5% or 2% depending on the region, plus 10% of VAT (called IVA in Spain). In addition, the buyer pays the notary fees (estimate 0.5%), and, although the seller should pay property registry fees, by convention the buyer pays. Again, this is a relatively modest amount, but it depends on the complexity of the deed (allow for about 0.5%).
What the buyer must not pay is the plusvalía. In the past it was common for the seller, particularly in the case of developers, to load this onto the buyer—but the law designates it as a seller’s tax. Plusvalía is a municipal tax calculated on the increase in the value of the land between the time of the previous purchase and sale. If many years have elapsed between purchase and sale, it can become quite a substantial amount of money… which is why the seller might try to wriggle free of it. For clarity, when you make an offer to buy, make it clear that the seller pays plusvalía.
If you are buying with a mortgage, you should budget for additional costs of up to 3% to cover bank administration costs and additional notary and registry fees. Before buying in Spain, make sure to find an independent, bilingual lawyer—not one introduced by the seller’s agent. Even if you speak Spanish, you should find a lawyer who is completely fluent in written and spoken English. This won’t be a problem, just make sure you pin them down to a fixed fee before they start work. They should be prepared to negotiate about 1% to 1.5%.
Your lawyer will check that the title is good, that there are no outstanding charges or encumbrances, and that any existing mortgage is paid. You should ask to see the draft contract translated into English. As all purchases take place in front of a notary, you must be there in person or give your lawyer a power of attorney to complete the purchase on your behalf. This is common for foreigners purchasing real estate in Spain. Post-completion, the lawyer will set up a transfer of utilities to your name and can set up direct-deposit payments from your bank account.
If anyone, either the seller or their agent, suggests declaring a lower amount in the title deed than you are paying, say no. It was common practice in the past, with as much as 30% under the radar, but it is against the law, and you risk receiving a fine.
If you want to retire in Spain, you’ll enjoy excellent infrastructure, with great health care, and extensive transit systems. Spanish medical professionals are highly trained, and people enjoy virtually free health care in Spain.
Spain’s train system is the most developed aspect of its national infrastructure; it’s one of the best in Western Europe. Spain also has highly developed coastal and maritime infrastructure, as the country’s economy depends heavily on merchant marine and fishing fleets. Communications infrastructure is excellent, as in most of mainland Europe.
While Spain’s road systems have nearly all been built since the 1980s, the roadways do not accommodate the current population and traffic is a problem throughout the country.
The economy in Spain is highly developed and is the fifth largest in Europe and the fourteenth largest by nominal GDP. As with most of the world, Spain is affected by inflation and the COVID-19 pandemic, but the economy remains strong.
According to the Organisation for Economic Co-operation and Development (OECD), growth in Spain is set to slow to 4.1% in 2022 and 2.2% in 2023 due to heightened uncertainty, high inflation, and slower external demand. The tourism economy, however, continues to recover and experience growth.
Tourism is an important factor in the property market—the great majority of foreign property owners in Spain start as tourists.
The cost of living in France can be much lower than you expect. We don’t mean that France is a “budget” destination (although there are certainly some very attractive real estate bargains here), but your cost of living could be brought down significantly depending on where and how you live.
Your lifestyle influences greatly on your monthly budget. For example, a Coca-Cola at Champs-Élysée can cost more than lunch for two at a nice bistro in a far less recognizable corner of this city. Paris is expensive, and the Marais is one of its most expensive neighborhoods. But for access to the heart of Paris, there is no better location. The cost of living for this prime location amounts to about 2,860 euros per month.
The Marais district in the center of Paris has one of the highest costs of living in France. The average selling price for property is over 1,020 euros per square foot, and rentals are averaging close to 1,700 euros per month.
Absolutely. France offers the world’s best quality of life and retiring here is more affordable than you might think. In fact, France is included in our 2023 Overseas Retirement Index.
If you’d like to reinvent your life in this culture-rich European country, make sure to check our France Starter Kit here. We’ve also published in-depth Country Retirement Reports on several areas of France. These are available in our online Bookstore, here.
France has a famously complex tax system.
Residents are taxed on worldwide income, while non-residents are taxed on locally earned income only. Figuring out French tax can be complicated. The total amount of taxes you’re likely to end up paying between France and the United States should be roughly the same as what you’re paying now. There’s a tax treaty in place between the two countries, which eliminates the risk of double taxation.
In France, you’ll pay taxes to the central government only; there are no state or county taxes. If you’re moving to France as a couple or a family, you’ll be able to take advantage of tax reductions.
If you choose to settle in Paris, most locals will know English, especially those in customer service positions––bookstores, news services, cafés, restaurants, etc. Plus, there’s a large expat community here. You don’t have learn French, but we highly recommend you try to learn at least the basics. A “Parlez-vous anglais?” can carry you a long way.
If you choose to live outside of Paris, you’re less likely to encounter English speakers. To make the most of French country life, learn at least conversational French.
Start by joining ourFacebook page. It’s become a forum of current and soon-to-be expats and is a great place to start a conversation with other France expats.
You could also search online for local expat groups and clubs. These exist all over the world in the form of book clubs, sport clubs, cooking clubs, etc. Some of the most established international expat groups includeInternations,and AngloINFO.
Don’t underestimate how nice it would be to make friends with the locals, though.
When purchasing property in France, you’ll incur notary fees (about 1%) and a transfer tax (5.09%). Both fees together would amount to less than 18,800 euros based on the purchase price you reference.
You also need to consider your real estate agent’s fee. Typically, this is disclosed up front by the agent (whether the fee is bundled in the list price or not); however, if the agent doesn’t detail this, you should ask. Agent fees are usually in the range of 5% but can be negotiable.
A mortgage broker in France should charge you 1% of the mortgage amount, though for a small mortgage, the fee may be greater.
You could apply for a loan to purchase property in France. However, it might prove tricky right now seeing as banks are not particularly open to doing so right now.
Check this video if you want a step-by-step explanation of how you can buy property in France.
Yes. Hazan Immobilier, 145 rue St. Dominique, in the 7th arrondissement; tel. 33(0)1-53-59-59-53; website:www.hazan-immobilier.com.
France is not a “budget” destination, but depending on where and how you live here, you can find it to be surprisingly affordable.
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