6 Things That Will Change For The Better When You Move to Spain

If your list of things you don’t like about the UK is longer than your arm, it’s time to think seriously about moving abroad. Spain is a country that’s particularly attractive to many expats, not only for its sunny weather, relaxed Spanish culture, delicious Mediterranean diet, and the promise of an afternoon siesta whenever you fancy—it also offers a lower cost of living and a much better quality of life.

If you’re thinking about moving to Spain, you probably don’t need much convincing. But if you do, you’ll be happy to know that this popular European country offers several advantages that can give you a better life than the one you have in the UK, especially when it comes to taxes in Spain.​

Keep reading for six things that change for the better when you relocate to Spain.

1. Your Income Tax Rates Will Be Lower

Do you hate paying your taxes? Spain isn’t tax-free (the idea of paying no taxes whatsoever is sadly too good to be true), but the good news is that rates for income tax in Spain can often be more favourable than they are in the UK and other European countries, especially if you’re retired or have a moderate income.

How much tax do you pay in Spain? Thanks to its progressive tax system, you might find yourself paying less overall for your taxes in Spain than you currently pay in the UK. And thanks to the UK-Spain Double Tax Treaty that applies to UK nationals, double taxation relief means you won’t end up getting taxed twice on the same income. ​

2. You’ll Access Better-Quality Healthcare

There’s no denying that the doctors and nurses in the UK work extremely hard and provide some of the best healthcare in the world.

But the quality of the services we receive in the UK is often hindered by the financial strain on the NHS. The all-too-familiar struggle of trying to secure a doctor’s appointment, the long wait times for hospital referrals, and overworked staff do not have the time to give patients the attention they need.

Spain’s national health service is known for being high-quality, with shorter wait times than you’ll get with the NHS, so you don’t need private health insurance. When you get your Spanish residence permit, you’ll start making social security contributions, which will give you access to public healthcare services for free.

3. You May Be Exempt From Wealth Tax

This benefit applies only to those planning to move to Spain with assets over €700,000. If you fit this description, you’ll need to pay the Spanish wealth tax, but some regions offer exemptions.

For instance, if you’ve got your eye on Madrid or Andalucía property in the Costa Del Sol, moving to one of these regions will entitle you to a 100% wealth tax exemption, and other regions offer smaller wealth tax relief.

If the Spanish government doesn’t classify you as a resident who needs to pay taxes in Spain (if you’re spending less than 183 days there in a calendar year), you’ll only be taxed on any assets you have in the country.​

4. Capital Gains Tax Is Simplified

If you pay capital gains tax in the UK, you’ll be happy to hear that capital gains tax in Spain for British citizens is generally much more straightforward.

Typically, Spain’s gains taxes are fixed based on the size of the gain, and there are clear exemptions for things like selling your main home or retiring over 65.

Comparably, things in the UK can get complicated, with taper relief rules and shrinking allowances to get to grips with. Spain’s system is easier to follow, especially once you become a Spanish resident, and you are more generous in some cases.

5. You’ll Get Outside More

The harsh reality of living in the UK is that at least half the year is spent indoors, with freezing cold weather making venturing outside completely unappealing.

Spain still gets cool in the winter, but its climate is much milder, especially down south. You’re guaranteed to spend more time outdoors because you’ll actually want to.

Unsurprisingly, Spanish people are more active (think hiking, biking, and running are much more enjoyable in the sun), with the opportunity to enjoy the restorative effects of the sun and fresh air.

6. You’ll Find it Easier to Make Tax Declarations

Spain makes it much easier to manage your tax obligations, with tools like the Spanish Tax Calculator simplifying the job of estimating liabilities, and the Modelo 720 form giving you a straightforward means of declaring your overseas assets to Spanish authorities, so tax declaration in Spain shouldn’t make you want to tear your hair out.

Bonus tax benefit: Some regions offer generous succession tax exemptions in Spain for close relatives, and when you commit to proper estate planning, you can potentially save a lot compared to the UK inheritance tax system.​

Final Thoughts

Moving to Spain certainly offers plenty of advantages, especially when it comes to your taxes. But before you even think about learning to speak Spanish and swapping your UK driving licence for a Spanish one, there are things you’ll need to understand regarding your finances, as you would when moving to any new country.

Taxes in Spain can be complicated for residents, with the Spanish taxation rates being complicated to understand, especially now that the UK has left the European Union—and that’s where you might feel more comfortable seeking expert help.

We recommend contacting a tax professional who specialises in Spanish taxes for expats. They can help you if you’re looking to learn more about the steps to becoming a Spanish tax resident or have already moved and need assistance with your Spanish tax return.