If you’ve long held a dream to spend your retirement years enjoying the sunny climes of Spain, you might be wondering how Brexit has impacted that plan.
The UK’s departure from the EU on 1st January 2021 inevitably brought change to the freedom of movement and residency rights within Europe for UK nationals. And while the changes are notable, they needn’t stop you from realising your dream of retiring to Spain, it will just need to be done under a different set of rules.
So, how do things work now and what do you need to know?
Property buying rights
The first thing to note is that there is no change to your right to buy property in Spain and purchase costs and taxes are also unaffected, they are the same for everyone, regardless of nationality.
If you were already lawfully settled in Spain before Brexit
UK nationals who were lawfully settled in Spain for at least five years prior to the transition period ending, with documentation to confirm it, continue to enjoy uninterrupted freedom of movement and citizens’ rights under the Withdrawal Agreement.
If you are planning to move to Spain post-Brexit
Unless you hold either Spanish residency or EU citizenship, as a UK national you can no longer come and go as you wish in Spain, or the rest of the European Union. For visa free travel there is now a limit of 90 days maximum in any 180-day period in which you can be in European Union countries.
So, if you planned anyway to split your time between Spain and the UK, there may be no change for you other than the way you schedule your time. The 90-day limit will reset either at the end of a 180-day period or once you have spent 90 days outside the Schengen zone.
If you don’t want these time restrictions or if you plan to make Spain your new permanent home then you will need to apply to stay in the country for a longer period by obtaining one of two different types of visa.
Types of visa
The non-lucrative visa (also known as the retirement visa) grants temporary residency for one year and can then be renewed twice, each for a period of two years. Once you reach five years in Spain through this route, you can then apply for permanent residency.
To obtain this visa you will need to:
- show you meet the annual income criteria to support yourself and any dependents within the visa requirements
- have private health insurance cover for Spain (you are only eligible for state cover once resident)
- commit to spending the required amount of time in the country to fulfil the visa criteria (generally 183+ days in a year)
You can apply for the visa at the Spanish consulate in the UK and it generally takes 3 months for the process to complete and the application to be accepted.
The ‘golden visa’ is a scheme offering a much more flexible option and is available to people who make a substantial capital investment in Spain, this includes the purchase of real estate. For this reason, buying Spanish property is one of the most common ways to qualify for this visa, although the property must be worth at least €500,000. This visa offers the freedom to come and go as you wish in Spain and includes access to public services like state healthcare, without having to become fully resident, although you will still need to show you have sufficient financial resources for yourself and other family members whilst you are in Spain.
You should note the if you spend more than 183 days in a year in Spain you will be considered a tax resident (this has nothing to do with residency in relation to immigration), this will mean you are liable for tax on your worldwide income and gains under Spanish jurisdiction. As rates, reliefs and allowances can vary between the 17 autonomous regions in Spain it is important to get the right advice on how you can be as tax efficient as possible for the region in which you live, as well as ensuring that you aren’t in danger of being tax resident in both Spain and the UK, which is possible and may mean you end up paying more tax than you need to.