Living as an EU pensioner in Spain and moving correctly!
Moving to Spain as a pensioner from an EU country can be associated with many challenges and bureaucratic hurdles.
Such a step should therefore be well prepared – both legally and financially.
In this specialist article, you will learn everything you need to know about life as an EU pensioner in Spain: from pension taxation and health insurance to the legal requirements for residency, practical emigration tips and a checklist.
Inheritance regulations also play an important role if you want to live permanently in Spain.
This comprehensive overview will help you make well-informed decisions and enjoy a relaxed retirement in Spain.
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Practical tips for moving to Spain
Here you will find some practical tips and a checklist to help you plan your emigration to Spain as a pensioner more easily and carry it out correctly.
✅ Learn Spanish:
Spaniards like to be spoken to in their own language.
It is therefore extremely helpful to know the Spanish language. This not only facilitates communication and integration in everyday life, but is also an advantage in official and business matters.
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✅ Apply for a NIE number:
The NIE number (‘Número de Identificación de Extranjero’) is a personal identification number for foreigners in Spain. It is required for almost all official, tax and contractual matters in Spain (such as buying property, opening a bank account, registering a car or buying a vehicle)
The NIE is therefore required if you carry out economic transactions in Spain, especially with regard to tax (tax return). However, a passport or identity card is sufficient for certain matters.
Note
When you apply for the Residencia, you will also receive the NIE number. You should therefore only apply for the NIE number if you absolutely need it beforehand.
You can apply for the NIE in Spain via the immigration office (‘Oficina de Extranjeros’) or the relevant police station (‘Comisaría de Policía’) or, in certain cases, in your home country (via the Spanish diplomatic missions).
✅ Open a bank account in Spain:
If you are a pensioner living in Spain, you will need a Spanish bank account for certain matters, such as for pension payments to Spain, for a property purchase or for direct debits of payments such as for electricity, water, telephone, interne and taxes.
✅ Renting or buying:
Buying a property
If you decide to buy a property (house, flat, finca) in Spain, you should check it carefully (especially the legal and financial situation), know the tax burden and choose the right purchase contract.
It is advisable to take appropriate legal advice to ensure that all legal and tax requirements are met.
Renting a flat
If you want to rent a property in Spain on a long-term basis, find out carefully about your rights and obligations as a tenant.
Spanish tenancy law may differ in some aspects from the tenancy law in your country of origin, particularly with regard to the duration of the tenancy agreement, cancellation, payment of rent, work in the flat, deposit, etc.
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✅ Apply for electronic identification:
To complete formalities online in Spain, you need an electronic certification. This allows you to submit your applications and tax declarations quickly and easily from home.
Forms of electronic identification in Spain are
- Cl@ve Mobile
This is a system that allows you to easily identify yourself in electronic procedures without having to memorise complex passwords or install certificates. This certification is sufficient for most procedures.
- Certificado electrónico
The electronic certificate is a signature that is installed in the browser to guarantee your identity on the Internet. It allows you to carry out formalities online from your computer, mobile device or tablet.
- eIDAS (the authentication system for EU citizens)
This system allows EU citizens to access public administrative services in Spain.
More details below.
✅ Be aware of tax obligations
As a rule, as a pensioner resident in Spain, you are obliged to pay income tax in Spain and therefore submit an annual Spanish income tax return (see below for more details).
Being resident in Spain also has the following tax implications:
- The Spanish tax authorities must be informed of your foreign assets by means of ‘Modelo 720’ if these assets exceed €50,000.
- Furthermore, the ‘Modelo 721’ must be submitted as an informative declaration if you hold virtual currencies (cryptocurrencies) that are managed abroad as private assets. However, crypto units abroad are only subject to reporting if their value exceeds €50,000.
- A wealth tax declaration must be submitted if wealth tax is payable or in the case of global assets in excess of € 2,000,000.
- You are subject to inheritance tax and gift tax in Spain, regardless of where the assets or rights are located (i.e. including foreign assets).
✅ Register or re-register your vehicle (if necessary):
If you bring your vehicle with you to Spain, remember that you are only allowed to drive it with a foreign licence plate in Spain for a certain period of time. After taking up residency in Spain, you must re-register the vehicle with a Spanish licence plate.
You can find out more about this in my specialist article – Register a car in Spain: The ultimate guide!
✅ Exchange your driving licence (if necessary):
If you have your normal place of residence in Spain, then in certain cases you must have your EU driving licence exchanged to a Spanish driving licence.
In particular, a change is required in the following cases:
- Your driving licence has expired or will expire in the near future
- You hold a permanent driving licence (after 2 years of normal residence in Spain)
- Your driving licence has been lost, stolen or damaged
Right of residency for pensioners in Spain
What are the requirements for residency in Spain?
In order to legally reside in Spain for a longer period of time as a pensioner, you and your family members must fulfil certain legal requirements and complete formalities.
As an EU pensioner, you can stay in Spain for up to 3 months without having to take any formal steps. You are considered a tourist and only need a valid passport or identity card to enter the country.
However, if you are staying in Spain for longer than 3 months, as an EU citizen you are obliged to complete the following registrations or steps:
- Apply for registration in the Central Register for Foreigners in Spain as a ‘residente’ (‘Certificado de Registro de Ciudadano de la UE’). So-called Registration certificate.
In order to obtain registration certificate as a pensioner who does not work in Spain, you will need proof of sufficient financial resources (such as a pension certificate) and proof of comprehensive health insurance (such as the S1 form, if applicable).
The application is submitted to the immigration office or the relevant police station.
Even if you are a pensioner and only want to spend the winter in Spain for more than 3 months, you must apply for the registration certificate.
After 5 years of uninterrupted legal residence, you can apply for permanent residency (‘residencia permanente’), which is valid indefinitely.
- Registering your address with the local municipality (‘empadronamiento’)
Note
As an EU citizen, you do not need a residence permit to live in Spain.
Healthcare for pensioners in Spain
How am I health insured as a pensioner in Spain?
As mentioned above, a longer stay in Spain also requires valid and comprehensive health insurance.
Pensioners from an EU country basically have 2 options for obtaining medical care in Spain – depending on their (current) insurance status (statutory or private):
- Via the public health insurance (‘Seguridad Social’) in Spain and/or via the
- Private health insurance
1. National insurance
If, as an EU citizen, you move your habitual residence to Spain, you and your family will remain health insured under the legislation of the member state that pays the pension and you will continue to pay your contributions there, provided that the following conditions are met:
- You fulfil the national requirements of your country of origin for statutory health insurance and
- You are not entitled to health benefits in Spain (i.e. you do not work in Spain or do not receive a pension there).
Consequently, you are covered by the Spanish public health system if you live in Spain and are entitled to benefits there (due to work or a pension), even if you receive pension income from another country.
As an EU citizen, you are only subject to the legislation of one member state and only pay your contributions in one country.
The legal basis for this provision are the EU Regulations on the coordination of social security systems (No. 883/2004 and No. 987/2009).
These EU regulations apply to citizens of the European Union (EU), the European Economic Area (EEA – Iceland, Liechtenstein, Norway), Switzerland and the United Kingdom. When I refer to the EU here, I am referring to these countries.
How do pensioners get access to healthcare in Spain?
If you receive a pension in an EU country and are (legally) covered by social security there, you and your family members are entitled to benefits from Spanish social security (‘Seguridad Social’) using the S1 form.
You must fulfil the following requirements or complete the following steps:
- Registration in the Spanish register of foreigners (so-called registration certificate) as a basic requirement
- Registration with the municipality of residence in Spain (so-called ‘empadronamiento’)
- Registration of the S1 form (issued by your national insurance in your home country) with the Spanish Social Security Institute (‘Instituto Nacional de la Seguridad Social’ – INSS for short)
- Application for the Spanish health insurance card (‘tarjeta sanitaria’) at the responsible local health centre (‘centro de salud’) in Spain.
This health card then gives you access to public healthcare benefits in Spain.
However, the costs of medical treatment in Spain are always borne by the country that pays the pension.
You can find more information in my specialist article – How to access Spanish healthcare as a pensioner correctly?
Note
If you are only staying in Spain temporarily, you are entitled to the necessary medical care in Spain with your European Health Insurance Card.
2. Private health insurance
If you do not have access to statutory health insurance or would like additional benefits, you can take out private health insurance in Spain.
It should be kept in mind that the Spanish ‘Seguridad Social’ does not cover certain services, such as dental care.
With private health insurance, you can obtain more comprehensive cover, have shorter waiting times and access to private clinics in your language.
However, the conditions of Spanish insurance companies (e.g. age limits, pre-existing conditions) can make it difficult to take out private health insurance in Spain.
With ASSSA Insurance, you have first-class private health insurance in Spain at your side. Take advantage of personalised advice in English now.
Pension taxation in Spain
How is my pension taxed in Spain?
Whether and how your pension is taxed in Spain depends primarily on the following factors:
- Tax domicile
- Type and amount of the pension
- Existing double taxation agreement
Tax residency in Spain
If you move your main residence to Spain (this is particularly the case if you stay in Spain for more than 183 days), you are resident in Spain for tax purposes and therefore subject to (unlimited) tax there on your entire global income (including pension payments from abroad).
Type of pension and double taxation agreement
If you are resident in Spain for tax purposes, the next step is to consult the relevant double taxation treaty depending on your nationality to determine where and how your pension income is to be taxed.
As a rule, statutory and private pensions are taxable in Spain as the country of tax residence.
Any tax already paid in the country of origin of the pension can be credited in Spain in order to avoid double taxation.
Pensions paid by the civil service are an exception. These are taxed in the country that pays the pension. In Spain, they are exempt from tax, although the progression proviso must be taken into account.
Pension amount and tax return
If your pension is taxable in Spain, you are obliged to submit an income tax return there for the respective tax year if you exceed € 15,876 (current exemption limit)
If your pension income is below this amount, you are exempt from submitting an income tax return in Spain.
Amount of taxation on pensions in Spain
Spanish income tax is progressive and consists of a state and a regional component. Depending on the autonomous region, the combined tax rates range from around 19% to 47%.
There are personal allowances which are not subject to taxation and which are increased from the age of 65.
If joint taxation is chosen (e.g. with a spouse), a tax reduction is also possible if the spouse has no or very little income.
Pensioners with disabilities can claim additional tax benefits if certain conditions are met.
The Autonomous Communities have, within the scope of their regulatory powers, in some cases decreed their own allowances and reductions.
Law of succession for pensioners in Spain
If you are an EU pensioner living in Spain and own assets there (such as property, bank deposits or vehicles), you should familiarise yourself with the inheritance regulations at an early stage.
Spain has its own regulations, some of which differ significantly from those in other countries.
In Spain, there exist the general Spanish law of succession(regulated by the Civil Code – ‘Código Civil’) and the so-called Foral Rights (‘Derecho Foral’), which are applied in some Spanish regions (e.g. Catalonia, Balearic Islands, Galicia, Basque Country).
Which law of succession applies?
According to the EU Regulation (EuErbVO 650/2012) in matters of succession, the law applicable to the succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of death. (Art. 21 EuErbVO).
If you as the testator live in Spain, Spanish inheritance law is therefore applicable. Unless you have expressly stipulated in your will that the law of the country of which you are a national governs your succession (Art. 22 EuErbVO).
You therefore have the option of choosing the law of succession of your home country if this makes more sense for you.
How is the succession accepted in Spain?
Under Spanish law, the legal successor (heir/heiress) does not automatically receive the heritage. There must first be an acceptance of inheritance. This acceptance does not require any particular form and can also be made by conclusive action. As a rule, however, a declaration of acceptance is made at the notary’s office.
The succession can be waived as long as the inheritance has not yet been accepted. There are no time limits.
It should be borne in mind that assets are acquired when the inheritance is accepted. And this increase in assets is subject to inheritance tax in Spain.
Is a foreign will valid in Spain?
A foreign will, regardless of whether it is a handwritten or notarised will, is generally recognised in Spain in terms of form.
If you are resident in Spain and Spanish inheritance law applies, a Spanish notarised will may be recommended. On the one hand, this has advantages for the liquidation of a succession in Spain and, on the other hand, it also increases legal certainty.
Joint wills and testamentary contracts are not permitted under general Spanish law of succession.
Foreign testaments must first be translated into Spanish and provided with an apostille.
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What is the legal portion under Spanish law?
In Spain, there is the right of compulsory portion, which prevents certain persons from being (completely) disinherited.
Children, other descendants, relatives in the ascending line and the surviving spouse of the deceased are entitled to the Spanish legal portion.
The legal portion is the part of the deceased’s assets that he or she cannot freely dispose of. Under general Spanish law, it amounts to 2/3 of the inheritance for children. The spouse receives a certain usufructuary right.
You may also be interested in these specialist articles:
Residency in Spain: What you should definitely know!
How to apply for EU registration certificate in Spain?
