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Retiring to Spain post Brexit: Latest Considerations

Kyero team member

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*Article fact-checked by Lauren Rubio-Hughes, lawyer at HN Abogados. 

Sun-worshipping Brits have been flocking to Spain’s sandy shores for decades. With its warm weather, picturesque coastline and affordable living costs, it’s easy to see why there are more than 350,000 British citizens enjoying expat life in Spain.

After the European Union gave citizenship rights to its member nations in the early 90s, moving to the Med became a breeze for Brits. Post-Brexit, things are a little different, but it’s still possible to make the move. That said, you’ll need to do some forward planning if you want to avoid unwanted tax bills and pension complications. 

Want to make your dreams of retiring to Spain post Brexit a reality? Read on for all the latest information on retiring to Spain post-Brexit. 

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Visas and Residency

Before Brexit, Brits could visit, live and work anywhere inside the EU. Moving to Spain was relatively easy, as there were no visa restrictions or limitations on maximum stay. 

If you want to retire in Spain after Brexit, the rules for Brits are now similar to those in place for non-European citizens. UK passport holders can stay in Spain for a maximum of three months during any six month period. If you want to stay longer, you will need to register as a resident. 

As a pensioner in Spain, you will be considered ‘economically inactive’. You have the option to apply for two different types of visa; the Spanish non-profit residence visa and the Spanish golden visa.

The non-profit residence visa will cost around £3,500 per couple to obtain, factoring in costs such as the visa fee (currently £516 for British citizens, if you’re not a British citizen, check what your fee will be here), tax and solicitor/gestor fees, medical checks, criminal records checks, legal stamps and translation of official documents.  

This visa is likely to be a good option for most retirees, as long as you can provide evidence of your income. The lead member of the family must have a monthly income of at least €2,130.04, whilst each additional family member must have a monthly income of at least €532.51 (figures correct at time of writing). You will also need to prove that you do not have any criminal records. 

If your application is successful, the non-profit residence visa is valid for one year, after which you can renew it in blocks of two years. After living in Spain for five years, you can apply for permanent residency. 

The Spanish Golden visa costs in the region of €6000 per application. The Golden visa allows Brits to enjoy flexible residency rights in a range of EU countries, as long as they make a significant investment in the local economy. If you plan to retire in Spain after Brexit, investment is possible in a number of ways – from purchasing property worth at least €500,000 or buying €1m worth of shares in a Spanish company to investing €2m in Spanish public debt.

The Spanish Golden visa carries similar requirements to the non-lucrative visa, but the amount you need to prove sufficient incoming funds, is reduced to the same amount requested of any EU citizen – 400% Iprem and 100% Iprem per family member. 

If you are retiring to Spain from UK 2021, your application for the Spanish Golden visa will cover your spouse, as well as your financial dependents. The Golden visa will initially be granted for a period of two years, after which it can be renewed for five-year periods. Once you have lived in Spain for five years, you will be eligible to apply for permanent residency. 

Accessing your UK Pension in Spain

After retiring to Spain post Brexit, any income drawn from your pension pot will be subject to Spanish income taxation, unless you have a Government employee pension, which is only taxable in the UK. 

If you move to Spain permanently, you will usually be considered a Spanish tax resident after 183 days. This means that your UK state pension will be taxed as regular income, in accordance with Spanish tax rates.

The 25 per cent tax-free pension lump sum cash rule will no longer be applicable if you move to Spain, and there is no non-taxable element of a pension fund in Spain. If time allows, it’s wise to draw any tax-free cash from your pension pot before you move to Spain.

Healthcare

When retiring to Spain after Brexit, you will need to provide evidence that you do not suffer from an illness that could be a burden to public health, for example Severe Acute Respiratory Syndrome (SARS) or smallpox. 

Spain has one of the best public healthcare systems in the world, with more than 750 state-run hospitals. Under the terms of your visa, you will need to arrange comprehensive health insurance cover to the value of at least €30,000 for the full duration of your residency permit. This will need to be arranged through a Spanish insurance company.

It is important to obtain quotes from several different insurance firms before buying a policy, and you may wish to seek advice from a specialist healthcare insurance broker. You can expect to pay between €50 and €300 per month. 

Where to Move

Whether you choose cosmopolitan Denia, popular Benidorm or sunny Tenerife, Spain really does tick every box. If you’re considering retiring to Spain post Brexit, check out Kyero’s 11 best destinations to retire in Spain for more inspiration. To learn more about the practicalities of moving to Spain, listen to our podcast. 

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