If you are new to living here or organising your move, these are our five financial recomendations to live in Spain. The most important thing is that you need to include a wealth management review to your “to do list”. By doing it now, you will reap dividends in the future for you.
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First recomendation is to establish how to apply for legal residence in Spain. While this now involves stricter requirements and more advance planning and paperwork, it is not an issue provided you can support yourself.
Retirees can apply for a Spanish non-lucrative visa and residency permit. You will need to prove you have sufficient means to live on without employment, and have medical cover, be it public or private, plus other basic requirements.
If you have capital to invest locally (for example, €500,000 in Spanish real estate under current rules), Spain’s Investor or ‘Golden Visa’ is still available at the moment (though this may change in future).
While work visas can be harder to obtain, Spain has now introduced the Digital Nomad Visa. To qualify, you must work remotely (online) for a company located outside the EU/EEA or perform a maximum of 20% of your professional activity for a Spanish based company. Once accepted, you can apply to be covered by the ‘Beckham Law Regime’ which provides various tax advantages.
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Second recomendation – don’t presume what was tax efficient in your home country is tax efficient here. There often are compliant opportunities to reduce your Spanish tax liabilities to lower than you expect, particularly on investment capital. Plus, here in Andalucía, wealth tax has effectively been abolished.
In summary, you are considered a tax resident of Spain if you spend more than 183 days in Spain cumulatively in a calendar year, or if your ‘center of economic interests’ is in Spain, or your ‘center of vital interests’ is in Spain (your spouse and/or minor children live there). There is no split-year treatment; you are either resident or non-resident for the whole year.
Spanish tax residents are liable for income, capital gains and annual wealth taxes on their worldwide income and assets and subject to Spanish succession and gift tax rules.
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Third recomendation is to review all your savings and investments to confirm they are suitable for you now. Ensure your overall portfolio is suitable for you today, is designed to meet your aims and current risk appetite, and that you have adequate diversification to reduce risk.
Consider what currency to hold your savings in – keeping assets in another currency puts you at the mercy of conversion costs and negative exchange rate movements. It may be sensible for you to have a mix, so look for investment structures that allow flexibility.
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Fourth recomendation – retirees should review their pension funds and options to consider how to maximise their retirement savings without unnecessary risk. Weight up the pros and cons of each option and establish which will achieve your objectives. Establish the Spanish tax implications of each option. And then uou can spend your golden years in a country club community or a neighborhood that’s within a short distance of a golf course.
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For the best results, consider all these essentials in conjunction with each other. Often one will impact upon another so working on them in isolation could have unexpected Consequences. Ultimately, you want peace of mind that all your affairs are in order and designed to achieve your wishes.
In conclusion of our five financial recomendations to live in Spain we can say that taking professional guidance from a locally based adviser will ensure you have all the facts and understand your options. We always provide our clients with contacts of specialists with whom we have long time partnership working.
Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.
