Retiring in Spain as a Foreigner: Visa, Pension, and Taxes
Photo by Jorge Salvador on Unsplash
Spain welcomes many foreigners who've decided to retire here. The climate, public healthcare, and cost of living are the big draws. But nobody tells you what can go wrong. And it can get expensive.
This guide is for you if you're planning your retirement in Spain, or you already live here and aren't quite sure how pensions, visas, and taxes actually work.
The costliest mistake: assuming living in Spain doesn't change your taxes
Here's what a lot of people don't realize — and it ends up costing them thousands of euros a year. If you spend more than 183 days in Spain in a calendar year, the Spanish tax agency (Hacienda) considers you a tax resident. That means you're taxed here on all your worldwide income, including your foreign pension.
The most common trap: you arrive in January, enjoy the year, and by December you realize you've been here 10 months and Spain wants taxes on a pension your country has already withheld tax from. Paying twice is not the norm: Spain has double taxation treaties with around 100 countries, and even without one, Spanish income tax law lets you deduct what you paid abroad, up to what you would pay here on that same income (art. 80 of Law 35/2006). What does happen is that your country keeps withholding until you prove you now live here, and getting that money back is slow. You sort that out with your pension provider and the tax residence certificate from the Spanish Tax Agency, not with the consulate.
Non-Lucrative Visa: what you need to live here legally
If you're not an EU citizen, you'll need the Non-Lucrative Residence Visa. It's designed exactly for retirees or people with passive income who aren't going to work in Spain.
The main requirement: proving financial means of at least €2,400 a month (400% of the monthly IPREM, which is €600), either with regular income (a pension, for example) or with savings that cover the whole authorization period: €28,800 for the first year. If you're bringing a partner or family members, add €600 per additional person.
- Health insurance: that is all the regulation says (art. 61.2.b of Royal Decree 1155/2024). In practice, consulates usually ask for private coverage with no copays and full coverage in Spain, so check with yours before you buy a policy
- Criminal record certificate from every country you've lived in during the last 5 years
- Proof of financial means: pension, rental income, dividends or savings, backed by any legally valid evidence (bank certificates, property deeds…)
- No work permit — this visa doesn't allow any paid work activity
You apply at the Spanish consulate in your home country before you arrive. It's valid for 1 year and renews in 2-year periods. To renew it, you must have actually lived in Spain for more than 183 days in the calendar year (art. 64.2.f of Royal Decree 1155/2024), and anyone who spends more than 183 days a year in Spain is a tax resident here (more on that below). After 5 years, you can apply for long-term residency.
If you're an EU citizen (or from Norway, Iceland or Liechtenstein), you don't need a visa. If you're staying longer than three months, apply in person to be entered in the Central Foreigners' Registry (Registro Central de Extranjeros), at the foreigners' office or the police station, within three months of arriving. Heads up: as a retiree or non-working person, staying longer than 3 months does require you to prove sufficient financial means and health insurance covering all risks in Spain (Article 7 of Royal Decree 240/2007). If you're a pensioner, you meet the insurance requirement by showing, with the relevant certificate, that you're entitled to healthcare paid for by the country that pays your pension (art. 3 of Order PRE/1490/2012). It's simpler than a visa, but it's not free of financial requirements.
Collecting your foreign pension in Spain: yes, it's possible — but there's paperwork
Your pension can land in a Spanish bank account without any technical issues. The money crosses borders just fine. What doesn't cross automatically are your rights and tax exemptions.
The first thing you need to do once you settle here: notify your home pension agency of your change of residence. Each country has its own process:
- United States: notify the Social Security Administration at ssa.gov
- United Kingdom: contact the DWP's International Pension Centre
- Germany: write to the Deutsche Rentenversicherung
- Argentina: notify ANSES with the specific form for residents abroad
- Mexico: contact IMSS or ISSSTE depending on your scheme
If you skip this step, your home country may keep withholding taxes at the source even though you're already paying in Spain. And getting that wrongly withheld money back is a slow, bureaucratic process.
Bilateral treaties: pay once, not twice
Spain has signed Double Taxation Agreements (DTAs) with around 100 countries. These treaties determine which country taxes your pension: Spain, your home country, or split between both.
The general rule in most DTAs: private pensions are taxed in the country of residence — that is, in Spain. Public-sector pensions are sometimes treated differently depending on the specific treaty.
| Country | Has a DTA with Spain? | Pension mainly taxed in |
|---|---|---|
| United States | Yes | Spain, but the US can also tax Social Security; US government pensions, only the US (unless you are also a Spanish national) |
| United Kingdom | Yes | Spain (as resident) |
| Germany | Yes | Spain; a German statutory pension (Deutsche Rentenversicherung) with entitlement arising from 2015 can also be taxed in Germany (max. 5%; 10% if entitlement arises from 2030) |
| France | Yes | Spain (as resident) |
| Argentina | Yes | Spain (as resident) |
| Mexico | Yes | Spain (as resident) |
| Brazil | Yes | Spain up to US$3,000 a year; anything above that can be taxed in both countries |
| Chile | Yes | Spain (as resident) |
Here's what nobody tells you: having a signed DTA doesn't do anything automatically. Usually, the country that pays your pension will ask for a tax residency certificate from the Spanish Tax Agency (AEAT) before it stops withholding, although each country sets its own procedure.
You can request the certificate through the AEAT's online portal (sede.agenciatributaria.gob.es) or in person at one of its offices, and it's issued if the AEAT's records show that you're resident in Spain.
The 183-day rule: exactly where you stand
183 days is the legal threshold. Go over it in a calendar year and you're a tax resident in Spain. And Hacienda keeps count.
Short trips abroad still count as days in Spain, unless you prove with a certificate that you're a tax resident in another country.
Watch out for this: it's not just about the days. You're also a resident if the main base of your activities or economic interests is in Spain. And if your spouse (unless you're legally separated) and your dependent minor children live in Spain, Hacienda presumes you live here too, unless you prove otherwise, even if you spend fewer than 183 days here.
Two common situations worth understanding clearly:
- You arrive mid-year: if you arrive on July 2 or later and hadn't been in Spain earlier that year, you won't go over 183 days, so the day count alone won't make you a tax resident that year (although you will be one if your main economic interests are already here). That gives you some breathing room to get organized before the next tax year starts counting.
- You have residency in two countries: if you keep a primary home in your home country too, the DTA can protect you from a residency conflict, but you need solid documentation from the start.
Taxes in Spain on your pension: the real numbers
If you're a tax resident here, your pension is taxed as employment income under the IRPF (personal income tax). There is a personal allowance that is not taxed: €5,550 a year, €6,700 if you are over 65 and €8,100 if you are over 75. The rates combine a state portion and a portion set by each autonomous community. If the regional portion matched the state one, they would look like this (for guidance only):
| Annual bracket | IRPF rate |
|---|---|
| Up to €12,450 | 19% |
| €12,450 – €20,200 | 24% |
| €20,200 – €35,200 | 30% |
| €35,200 – €60,000 | 37% |
| €60,000 – €300,000 | 45% |
| Over €300,000 | 49% |
If your pension is €1,500 a month (€18,000/year) and you have no other income, you'd pay around €1,700 a year in IRPF if you're 65 or under, and around €1,450 if you're over 65 (it depends on your autonomous community). You'd also have to file an income tax return: when whoever pays you isn't required to withhold Spanish tax, as is usually the case with a pension paid from abroad, you must file from €15,876 a year (art. 96.3 of Law 35/2006).
And if you already paid taxes at home, the double-taxation deduction on your IRPF lets you subtract what you paid there, up to what you would pay here on that same income. With the right DTA applied from the start, your net tax bill can be pretty reasonable.
Your next step
This week, do these two concrete things:
1. Go to the Spanish Ministry of Finance website (hacienda.gob.es, under Normativa y doctrina → Normativa → Convenios de doble imposición) and check whether your country has a DTA signed with Spain and what it says about pensions.
2. Contact your home pension agency and ask for the form or process to notify them of a change of residence abroad. Many have a specific form for residents in Spain.
If you've been living in Spain for more than a year without filing an income tax return, talk to a tax advisor before Hacienda finds you first. Sorting it out on time is always cheaper than responding to a formal notice.