Retiring to Spain

Retiring to Spain? Here’s What You Need to Know About Taxes and Healthcare

If you're thinking about retiring to Spain, you're not alone—more and more people are choosing this beautiful, sun-soaked country as their ideal retirement destination. But before you pack your bags and start planning beach days and tapas nights, it’s important to understand how taxes and healthcare work here. Here's a practical summary of the essentials:

Taxes for Retirees in Spain

Tax Residency
You’ll be considered a tax resident in Spain if you spend more than 183 days in the country within a calendar year. As a tax resident, you're liable to pay Spanish tax on your worldwide income, including pensions. However, Spain has double taxation agreements with many countries to help ensure you don’t pay tax on the same income twice.

Pension Income Tax
Whether your pension is taxable in Spain depends on its type:

Private pensions (from employment or personal savings): Taxed in Spain as earned income.
Government pensions (e.g., from civil service, military, or public-sector work): Often only taxable in the country of origin if a bilateral treaty applies.
Spain offers certain deductions and allowances for pension income, and treaty protections may further reduce your liability—depending on your home country.

Non-Resident Taxation
If you spend fewer than 183 days in Spain and don’t meet the criteria for tax residency, you won’t typically be taxed on foreign pensions. However, non-resident income tax applies to income earned within Spain:

24% for most non-residents
19% for residents of EU/EEA countries
This only applies to Spanish-source income, not pensions from abroad.

Healthcare Access in Spain

EU/EEA Retirees
The EHIC (European Health Insurance Card) covers only temporary stays—it’s not sufficient for long-term residency. If you're receiving a state pension from an EU/EEA country, you can request an S1 form from your country’s health authority. Registering the S1 in Spain grants you full access to the public healthcare system, typically free of charge.

Non-EU Retirees
You can access public healthcare through the Convenio Especial—a special agreement that allows non-EU residents to pay a monthly fee to join the system:

Approx. €60/month if under 65
Approx. €157/month if over 65
This provides full access to Spain’s high-quality public healthcare.

Bilateral Agreements
Some countries (e.g., the USA, Canada, Australia) have social security agreements with Spain. These may allow you to access public healthcare depending on your contribution history and the terms of the agreement.

Final Note

Relocating to a new country is exciting, but understanding tax obligations and healthcare access can be daunting. The good news is you're not alone—many Spanish-based professional service providers with English-speaking staff can assist with everything from establishing tax residency to registering for healthcare.

Whether you're planning your move or already enjoying life in Spain, getting the right advice will make your retirement smoother, safer, and more enjoyable.