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My name's Alex and this is my website all about La Torre Resort in Spain. Register now for free to talk about Taxes in La Torre Resort: Suma, NIE and general tax advice and much more!
We are considering retiring to Spain. We would like to know what taxes we would be liable to. We will be buying a property and will have an Annual income of around £30,000 plus approx. £250,000 in savings and investments
I & others on here can give general advice, based on our own experiences & knowledge; but you should really also seek professional advice, as the sums and impact involved can be significant.
To retire to Spain, you will need a Non Lucrative Visa (NLV) in order to become resident for more than 90 days. There are several other posts on here (including several by me) setting out the process.
You will then become a resident of Spain and, as such, Spain will tax you on your 'worldwide assets and income'. This isn't too much of a concern unless you have assets of €1million + and there are exceptions in this for your pension fund, the property you actually live in, etc.
In general, if you're selling your property in the UK, you need to avoid doing so in the same Spanish tax year as you buy (or already own) a property in Spain, as you would become liable for Capital Gains Tax in Spain (as that would constitute a second property).
As part of the NLV application, you need to be able to demonstrate 'means of maintenance' roughly equivalent to €33,000 pa for a couple - this can be from pensions, savings, shares, bonds, etc.
You would be liable for income tax in Spain (on your pension, share dividends, income from rental property, etc.) - as you would in the UK. However, whilst the tax rates in Spain are roughly similar to the UK, the personal allowances are lower, so overall, you pay more tax.
When buying a property here, you should allow an additional 12%-13% on top of the purchase price, for all the costs involved. The main one is the Property Purchase Tax, which is 8% (as opposed to, say, 1.5% for Stamp Duty in the UK).
On the plus side, council tax (in Spain, this is IBI) is a lot lower than in the UK. For example, my council tax in the UK was £3k pa, here it is about €450 !
Hope this helps as a starter - and happy to answer any other questions you may have.
Posted: Wed Nov 17, 2021 7:43pm
Helpful member
RichT wrote on Tue Nov 16, 2021 6:19pm:
I & others on here can give general advice, based on our own experiences & knowledge; but you should really also seek professional advice, as the sums and impact involved can be significant.
To retire to Spain, you will need a Non Lucrative Visa (NLV) in order to become resident for more than 90 days. There are several other posts on here (including several by me) setting out the process....
Read more...
...
You will then become a resident of Spain and, as such, Spain will tax you on your 'worldwide assets and income'. This isn't too much of a concern unless you have assets of €1million + and there are exceptions in this for your pension fund, the property you actually live in, etc.
In general, if you're selling your property in the UK, you need to avoid doing so in the same Spanish tax year as you buy (or already own) a property in Spain, as you would become liable for Capital Gains Tax in Spain (as that would constitute a second property).
As part of the NLV application, you need to be able to demonstrate 'means of maintenance' roughly equivalent to €33,000 pa for a couple - this can be from pensions, savings, shares, bonds, etc.
You would be liable for income tax in Spain (on your pension, share dividends, income from rental property, etc.) - as you would in the UK. However, whilst the tax rates in Spain are roughly similar to the UK, the personal allowances are lower, so overall, you pay more tax.
When buying a property here, you should allow an additional 12%-13% on top of the purchase price, for all the costs involved. The main one is the Property Purchase Tax, which is 8% (as opposed to, say, 1.5% for Stamp Duty in the UK).
On the plus side, council tax (in Spain, this is IBI) is a lot lower than in the UK. For example, my council tax in the UK was £3k pa, here it is about €450 !
Hope this helps as a starter - and happy to answer any other questions you may have.
Excellent answer!!!
