Note

Cost of living in Spain for retirees

§ 1Budget from the ground up

A budget for Spain is a list. Start with the fixed costs of the home: the community charge if there is one, the local property tax, home insurance, electricity, water, gas, internet and the upkeep of a garden or pool. Add the health cover you will use, the cost of a car or transport, food and the leisure you want. Add the cost of getting home and of visitors. Then add a reserve for repairs. This page belongs to the chapter on how daily life works, and it gives a method, not figures, because we found no official average that we could cite.

§ 2The costs of the home

The costs section of this handbook explains the taxes on owning, such as the local property tax and the tax on imputed income for non-residents. The section on owning and selling explains insurance, supply contracts and community charges. Ask the seller for twelve months of bills, and the administrator for the accounts and the budget. These give real numbers.

§ 3Health cover

If you have an entitlement from your home country or your pension, your health cover may be covered. If not, more on healthcare explains the public agreement and its fees as published by the ministry, and private insurance is an alternative. Include the premium for the whole of your stay, and remember that premiums can rise with age.

§ 4Tax

Income tax is not optional. A retiree who becomes resident is taxed in Spain on worldwide income, subject to treaties, while a non-resident owner pays Spanish tax on Spanish income and imputed income. The residency section and the costs section explain the principles. Ask a tax adviser for the combined effect of your pension, any savings and the home.

§ 5Currency and transfers

If your income is in another currency, exchange rates move your budget. The section on mortgages and money explains how transfers work. Keep a buffer and avoid assuming today’s rate.

§ 6Local differences

Prices differ between a village, a provincial capital and a resort town, but we found no official index we could cite at that level, so use local quotes. Ask residents what they pay for the same items.

§ 7Test it

Rent for a month in the season you will live there, keep your receipts and compare with your budget. A test month shows costs and also tells you whether you like the place.

§ 8A margin for the future

Plan for a time when you need help at home or a move closer to services. More on neighbours and the community touches on the community side of that question.

§ 9What we could not verify

We did not read the national statistics institute’s price tables or any official cost-of-living comparison, so no averages appear here.

§ 10More on this topic

More on schools explains how school admission works and what to ask when moving with children and more on living near an airport explains how to check airport noise before buying.

General information only. This is not legal, tax or financial advice. Check your own situation with a qualified adviser.