How much money do you need to retire in Spain?

01The visa income requirement to retire in Spain §

If you hold an EU, EEA or Swiss passport, skip this section — you register rather than apply, and the test is a lighter one of sufficient means plus healthcare cover. See EU residency in Spain.

Everyone else needs the non-lucrative visa, and Spain sets its income test as a multiple of the IPREM, the public income indicator: a set multiple for the main applicant, plus an additional percentage for each family member joining you. Because the IPREM is revised, any article quoting you a hard euro figure without a date should be read with care — including this one, which is why we check it against the current year for every client.

• Income and savings can be combined. You do not need it all as monthly income.
• The evidence matters as much as the amount. Bank certificates on letterhead showing balances over time, not screenshots and not a single recent deposit.
• A large sum that arrived last month raises questions rather than answering them. Season it before you file.
• It rises per person. A couple needs meaningfully more than one applicant.

Clearing the threshold is necessary, not sufficient. It is the number that gets you the visa, not the number you can live on.

02What it costs to live in Spain as a retiree §

Spain is cheaper than northern Europe on most things and not on all of them. The honest headline is that a couple can live comfortably on the Costa Blanca for meaningfully less than in the UK, Germany or the Netherlands — but "comfortably" is doing a lot of work in that sentence.

Cheaper here

• Eating and drinking out, dramatically so outside the tourist strips.
• Fresh food from a market. Fruit, vegetables, fish and wine.
• Local transport, and running a small car.
• Private dental and many private medical consultations.
• Council property tax on a modest home.

Not cheaper, and sometimes worse

• Electricity. Spanish electricity is not cheap, and a poorly insulated villa in January is an unpleasant surprise on the bill.
• Private health insurance, if you do not qualify for an S1 form. Premiums rise steeply with age.
• Community fees, if you buy in a complex with a lift, a pool or an ageing façade.
• Cars and fuel, roughly comparable, and new cars are often dearer than in Germany.
• Flights home, which you will take more often than you now think.

The useful exercise is not to look up an average. It is to write down what you spend now, line by line, and re-price each line here. Most people find the total falls by a fifth to a third — and that the shape changes more than the size.

03How much tax you will pay in Spain §

Once you spend more than 183 days in a calendar year here you are tax resident, and Spain assesses your worldwide income. The double taxation treaty decides which country taxes which pension, and treaties commonly split them: government and civil service pensions are often taxable only in the paying country, while private and occupational pensions are usually taxable where you live.

That means two neighbours with identical gross incomes can end up with very different net incomes. A retired teacher and a retired engineer with the same £40,000 may pay materially different amounts.

There is also Modelo 720, the declaration of assets held outside Spain, and in some regions a wealth tax. Neither is a reason not to come. Both are excellent reasons to run the numbers before you sell anything, which is what pension tax in Spain covers in detail.

04The one-off costs of moving to Spain §

These are the ones that catch people out, because they all land in the same three months.

• Visa and paperwork — consular fees, TIE card, criminal record certificates, apostilles, sworn translations, medical certificates. Per person.
• Professional fees — immigration lawyer, tax adviser, relocation coordination.
• Rental deposit — landlords frequently ask foreigners without Spanish payslips for several months up front.
• Buying a home — allow roughly 12–14% above the purchase price for transfer tax or VAT, notary, land registry and legal fees. See buying property in Spain.
• Furnishing and a car — the boring items that quietly add up to five figures.
• A Spanish will — a few hundred euros, and the best-value item on this list. See Spanish wills and inheritance.

05A worked example: what a couple actually needs §

Take a British couple, both 66, one occupational pension and two state pensions, planning to rent for a year in Dénia before buying.

1. Visa test. They must clear the current IPREM multiple for two people. Their combined pensions do, comfortably, so savings are not needed to top up.
2. Healthcare. Both draw UK state pensions, so an S1 is likely — which removes an insurance premium that would otherwise have been one of their largest fixed costs.
3. Living costs. Renting a two-bedroom apartment away from the seafront, running one car, eating out twice a week: they price their monthly life at roughly a third less than in Kent.
4. Tax. Under the treaty their state pensions become taxable in Spain. The occupational pension too. Their adviser models the annual difference — and recommends they take a pending lump sum before becoming Spanish tax resident, not after.
5. One-off. Paperwork, professional fees, a year’s rent deposit, a second-hand car, and — the following year — the 12–14% on top of the purchase price.

The number they needed was not the one they searched for. It was the fourth one: the lump sum decision, worth more than everything else on this page combined.

The question is rarely “can we afford it”. It is “in which order do we do this so it costs the least”.