Planning your finances before moving to Spain is one of the most important steps you can take. From proving your income for visas to managing taxes, pensions and savings, careful organisation will help you start your new life abroad with confidence.
Even if you’ve been saving for years, relocating to Spain involves a lot more than buying a property. You’ll need to budget for ongoing costs, understand how Spanish tax rules may affect you and ensure you have a financial cushion in place. Here’s how to get organised.
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Contents
- Budgeting for your move
- Understanding ongoing costs
- Tax and savings planning
- Pensions and income in Spain
- Frequently asked questions
Budgeting for your move
Before committing to a move, it’s essential to calculate your full financial picture. Spanish visas – such as the non-lucrative visa – often require proof that you can support yourself without relying on local work. Even if you’re not applying for a visa, it’s reassuring to know you’ve got every expense covered.
Alongside the cost of purchasing or renting a home, factor in additional fees such as property transfer tax, notary costs and legal fees. These can easily add 10-15% to your property budget. Having a realistic plan from the start avoids unpleasant surprises later.
Understanding ongoing costs
Owning or renting a home in Spain comes with monthly and annual expenses. Being aware of them will help you manage your income and savings effectively.
| Expense | Typical cost | Notes |
|---|---|---|
| Utilities (electricity, water, internet) | €100-€200 per month | Varies by region and usage |
| Community fees | €50-€250 per month | For shared facilities like pools or gardens |
| Annual property tax (IBI) | 0.2-1.5% of property value | Paid to your local town hall |
| Home insurance | €160-€700 per year | Depends on property size and cover |
Tax and savings planning
Moving to Spain changes your tax obligations. Spanish residents pay tax on worldwide income, so pensions, rental income and even overseas savings may be taxable. Wealth tax, although it only applies above certain thresholds, is another consideration. Spain also has a 60% rule, where your combined Wealth Tax and Income Tax liabilities cannot exceed 60% of your taxable income base – something to discuss with a qualified tax advisor.
Many expats also review where they keep their savings. Spanish banks offer accounts in euros, and you may wish to maintain a UK account for income in sterling. Currency fluctuations can have a big impact, so using a specialist provider for transfers can protect your funds.
Pensions and income in Spain
If you are retiring to Spain, it’s wise to check how your pension will be taxed and paid. UK state pensions can be claimed, via a UK or Spanish bank account. Private pensions and investments may benefit from tax planning before you leave, so speak to a financial advisor with experience in both the UK and Spain.
Frequently asked questions
What is the 60% rule in Spain’s wealth tax?
The 60% rule caps your wealth tax bill so it cannot exceed 60% of your taxable income, helping protect those whose assets may be high but annual income relatively modest.
Where should I put my savings in Spain?
Most expats choose between Spanish bank accounts, international savings accounts or investment products such as bonds or funds. The best option depends on your residency and tax situation.
Are you taxed on your savings in Spain?
Yes, residents are taxed on interest earned from savings and investments, with rates ranging from 19-28% depending on the amount. Your worldwide savings are included in Spanish tax returns.
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