Question
Is it tough for Americans to retire in Spain?
Answers
These are the answers of Spainguru’s Facebook group members:
“I hope not! But, to be honest I think the Spanish Govt wants to make it easier?!”
“The money Americans will bring, spend and then there is taxations of Americans as well as other foreigners.”
“Spain is not interested in fixing us or saving us from ourselves, but if we have the capacity to pay our way they let us in on an NLV so no paid work–period. I’ve lived here for nearly four years and I love it. But, I was looking forward to the culture and the geography, so I was coming to something I wanted to experience.
I worry about people who seem to be focused on saving money or leaving their current situation and the move is way too much work if there is not a lot of love for Spain at the heart of the decision to come here.”
“Some of us don’t feel we or Spain need fixing. Both are just fine and simpatico.”
“Well stated…..Spain doesn’t need Americans. But if you absorb yourself into their culture & their love of life, it’s the best medicine in the world!”
“What’s Spain’s tax rate like for ppl that have a NLV? Do they tax your pension or investments? If so, at what rate? I know people spend only 6 months out of the year in Spain to avoid becoming a tax resident, but is that necessary with a NLV?
Asking for my parents. I have researched the topic, but there is a lot of conflicting information. If you have any tips or if you can refer me to someone it would be greatly appreciated. Thanks in advance!! I will most def return the favor.”
“Social Security is taxed and so is other worldwide income. Government pensions go tax free. Cap gains on anything you sell are taxed, so careful to structure your home sale (yes US home sales are taxed here–even when they are not taxed in the US) to happen before your first tax year here.
If you have savings they may be subject to wealth taxes even when they are just cooling in the bank. The reason for the conflicts is that different local/regional governments can have different tax laws–so sorting all of that out before you move is critical if that is important to you.”
“I read that if a person is 65 or older and sells their house, the sale is not taxed.”
“Be aware of the wealth tax. Yes it is all very confusing.”
“Not what we heard and so we timed the sale to happen in the first half of the year we moved and then only arrived after mid-year–so not a tax year in Spain.”
“If you’re 65 or older my understanding is that you will not pay taxes for capital gain. Also regardless of your age if you buy a home with the gain to live in within 2 years you can also avoid taxes. I’m sure if I’m wrong I will be told so.”
“Very well said! People cannot come here and expect things to be better than their situation back home. If you come because it’s your dream/passion, you will be happy and make it work – and that goes for anywhere, not just Spain.”
“I agree. I visited Spain many times and have been researching how to live there. What I have seen and for most Americans, they are adjustments. Meal times, festivals and holiday hours. Allowing yourself time and patience and enthusiasm to learn Spanish. While in some places you don’t need that much Spanish, it will give you more freedom and flexibility if you do learn.”
“We need Spanish if we want to actually live here. Maybe not so much in the big cities of Madrid or Barcelona, or in the vacation hot spots, but everyone else needs to hear us trying. Otherwise, we are dismissed as tourists and that is a label that I want to avoid.”
“Spot on….Yes absolutely right. They don’t need us. But if you love their way of life & culture you’re fine. We have been to España several times & we love the people. We have made many friends. We are trying to move there. Enjoy each day.”
“Money is a big issue if it means the difference between being able to afford to live a decent life somewhere or not. Doesn’t mean someone is money-centred.”
“Just read the comments here long enough and you will see why, so far, 73 people felt the need to agree with my comment. Don’t come here for a deal or to dodge some problem back home. Come here as a cherished destination and things work out. Read these postings long enough and you will see that the other reasons all end in flames.”
Conclusion
Retiring in Spain as an American involves navigating a complex landscape of cultural, financial, and legal considerations. While the potential benefits are significant, including embracing a new lifestyle and enjoying the culture, the challenges such as adjusting to local customs, handling taxation, and overcoming language barriers are substantial. The consensus among expats emphasizes the need for genuine affinity for Spanish life and adequate financial preparation to ensure a successful transition.
