Last Updated on May 19, 2026 by Bruno Bianchi
Spain vs Italy for Expats: The Big Question
Any thoughts about Spain vs Italy? I have dual citizenship. Italy has high taxes. What about Spain? I just might do part time.
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Spain vs Italy for Expats: What the Community Says
These are the answers from Spainguru’s Facebook group members:
“People worry too much about high taxes, and not the overall cost-of-living including taxes. Taxes in Spain are much higher than in the US, but the excellent quality, low cost healthcare, extremely low property taxes, and much lower cost of living more than make up for it for most people. Not to mention a much better lifestyle. You have to look at the big picture when making financial decisions.”
“It all depends upon your specific financial situation. For some people, the higher taxes are offset by everything that you mentioned. For others, the taxes will be prohibitive, and the cost will outweigh the benefits.”
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Meet Tax Experts →“Exactly. Not to mention the quality of life. Would take Spain any day. While Spain’s bureaucracy is annoying, Italy’s is impossible.”
“You should check on what your taxes would be in each nation. They’re both pretty high for income taxes, but of course you get a lot more for it.”
“Also, here’s the thing. You have to decide for yourself what’s most important in your life. If it’s money, yeah, make your decision based on taxes. If it’s quality of life, well… then it’ll depend on what things you like.”
“Your profile says you worked for the federal government. As such, your FERS or CSRS retirement wouldn’t be taxed in Spain, but as an Italian citizen it likely would be taxed in Italy. Consult with experts, it might make a significant difference.”
“US Social Security is taxable in Spain. Spain doesn’t consider US Social Security a government pension. A government pension is one paid to government workers through their separate pension plans.”
“Spain does not tax United States Social Security benefits as income when the recipient is a tax resident of Spain, due to the provisions of the U.S.–Spain Income Tax Treaty. Under Article 20 of the Convention Between the United States of America and the Kingdom of Spain for the Avoidance of Double Taxation, payments made under the social security legislation of one contracting state are taxable only in that state.”
“However, there is an important technical nuance that often causes confusion. While Spain does not tax U.S. Social Security benefits directly, Spanish tax authorities may require that the income be declared for informational purposes and may include it in the calculation of the applicable marginal tax rate under the ‘exemption with progression’ principle. This does not create Spanish tax liability on the Social Security income itself, but it can slightly increase the tax rate applied to other taxable income earned in Spain or abroad.”
“The Dual Taxation Agreement between the USA and Spain, clearly states that social security and the Spanish equivalent are taxed in the SOURCE COUNTRY. What is confusing you and others, is that it is still reported on your Spanish income taxes, and any other income will be taxed at a higher rate, as it pushes that income into a higher tax bracket.”
“It won’t be the full tax in both places. Sometimes you’ll owe more in Spain and then you would pay the difference. For example (and this is very rough and for illustration purposes only): If you owed 30% in the US and 40% in Spain then you could end up paying 30% to the US and then 10% (40-30=10) to Spain. What would NOT happen is that you would pay 30% to the US and also 40% to Spain for a total of 70%.”
“Be careful not to conflate the top tax bracket with the effective tax rate you’d actually pay. Taxing your retirement pay makes a huge difference, but no one actually pays the top rate on all their income.”
“Taxes can make a huge difference. Came down between Spain and Portugal for us. Portugal just changed their tax rules for expats last year. We would be paying 50.5% income tax rate on our Social Security and one of my husband’s two pensions in Portugal. Although at a similar rate in Spain, just on that one pension, not on our SS income. HUGE difference. Like $30k a year difference.”
“I love Spain and would like to retire there…but the wealth tax scares me. Maybe it’s worth it? Not sure.”
“In most parts of Spain, if your worldwide assets are under 3 million euros, you are ok, but research it, laws may have been or be changing. IF however, you have significantly more than that, and higher income, the tax is much higher than the USA. In that case, you can look at Andorra.”
“For the last six years, my private insurance has been outstanding and has covered everything. I’ve had several major surgeries, countless doctors and specialist visits and spent a total of a month and a half in the hospital. The medical care here I’ve received has been excellent. I’m terrified of ever having to use the US healthcare system again.”
“Unless it’s a government pension from a public employee like a teacher fireman, or a government worker, yes, the taxes will be higher in Spain. But you need to take into account the big picture. Low cost, excellent healthcare, almost nonexistent property taxes, and the lower cost of living make up for it for most people.”
“I think culture will play a larger part on your decision. If you actually look at what Americans pay between all the state, federal and local taxes as well as car licensing fees, etc, etc, its actually quite high even in comparison to Europe. Factor on all the extra benefits you get in Europe and it’s a win.”
“Spain is much more relaxed than the US, but the beauracracy can be uptight in places. Italian beauracracy can be all over the place. If you expect something to be done in a month in the US, expect it to take 2 months+ in Spain. If they tell you 2 months in Italy, expect it to take 6 or more. They aren’t concerned about your schedule.”
“Italy can be tough for literal/linear folks.”
“Depending upon your income and assets, many European countries may have slightly higher taxes than in the US. That’s how they provide universal health care and other benefits. If your primary goal is to minimize your tax liability, Bulgaria may be the place for you. I find that the quality of life in a country like Spain is worth paying for.”
“Check out Italy’s 7% regime, I visited many beautiful towns that count, they are smaller towns, but quite livable and charming.”
“I live in Italy and not so crazy about it so far. People are greedy and disrespectful many times on the streets. My opinion is to simply live where you feel good.”
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Spain vs Italy for Expats: Final Verdict
The Spainguru community’s response to the question of Spain vs Italy for expats reveals that taxes are the dominant concern, but rarely the deciding factor on their own. Most members agreed that while Spain’s income tax rates are higher than in the United States, the overall cost of living, healthcare quality, and lifestyle benefits make the move financially viable for many retirees and expats.
A key point of debate was the taxation of US Social Security in Spain. The US-Spain Double Taxation Treaty exempts Social Security from Spanish income tax, though it must still be declared and may affect the marginal rate applied to other income. Government pensions (FERS, CSRS) are taxed only in the US, which could be a significant advantage for federal retirees considering Spain over Italy.
For anyone weighing Spain vs Italy for expats, the community’s advice is consistent: look at the full financial picture rather than tax rates alone, factor in healthcare and lifestyle, and consult a qualified tax professional before making a decision. This article is based on personal opinions from the Spainguru community and is not legal advice.
This comparison table summarizes the key insights and experiences shared by the Spainguru community regarding the move to Spain versus Italy. You can copy and paste this directly into your WordPress editor (using a Table or Custom HTML block).
Spain vs. Italy: Expat Comparison Summary
| Feature | Spain Insights | Italy Insights |
| Taxes | Higher than the US, but offset by lower cost of living. US Social Security is exempt from tax (but must be declared). | High taxes generally, but offers a 7% flat tax regime for retirees in specific small towns. |
| Government Pensions | FERS/CSRS pensions are typically not taxed in Spain (taxed only in the US). | Federal pensions are likely taxable in Italy for Italian citizens/residents. |
| Bureaucracy | Described as “uptight” and slow; expect tasks to take twice as long as in the US. | Described as “impossible” and chaotic; can take 6+ months for simple tasks. |
| Healthcare | Excellent quality, low cost, and highly rated by expats compared to the US system. | Mixed reviews; some find it difficult to access (long waits for routine check-ups). |
| Cost of Living | Much lower than the US; extremely low property taxes compared to US rates. | Food and dining out are cheaper than the US, but can be more expensive than Spain. |
| Wealth Tax | A concern for high-net-worth individuals (usually applies to assets over €3M). | Not prominently mentioned as a primary deterrent in this discussion. |
| Lifestyle & Culture | Relaxed, “worth paying for,” and progressive; modern rail and infrastructure. | “Enchanted” and beautiful, but can be clannish and harder to integrate into. |
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