Ten common doubts foreign pensioners in Spain have
From how your pension is taxed in Spain, to what inheritance laws apply and whether you qualify for public healthcare, here are some of the most common questions foreign pensioners have and the answers to their doubts.
Q: How is my foreign pension taxed in Spain, and will I be taxed twice?
Foreign pensions are generally taxed as employment income under Spanish personal income tax (IRPF). The amount you are taxed depends on how much your pension is and where in Spain you live.
The good news is that it’s unlikely you’ll be taxed twice, however, because double taxation treaties determine whether taxing rights belong to Spain or your home country (or the one your pension comes from).
In most treaties, government or civil service pensions are taxed in the country they come from, while state and private occupational pensions are taxed in Spain. Regardless, you must still declare this on your tax return. This is because Spain applies the exemption with progression rule (exención con progresividad), which increases the tax rate applied to other taxable income.
READ ALSO: What taxes do foreign pensioners in Spain pay?
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Q: How do I qualify for Spanish public healthcare?
If you’re a retiree from an EU or EEA country or the UK, you can access state-funded healthcare by registering for an S1 certificate, which covers you.
Non-EU pensioners will usually need to buy private health insurance to qualify for a visa such as the non-lucrative, but after one continuous year of legal residency, you can pay to use the public system via the Convenio Especial.
READ ALSO: How to apply for the ‘convenio especial’ to pay for public healthcare in Spain
Q: What defines Spanish tax residency, and what is the 183-day rule?
You will typically be considered a Spanish resident for tax purposes if you spend more than 183 calendar days here. It means that you will be liable to pay taxes on worldwide income and capital gains. If you spend less than this then usually you won’t be considered a tax resident.
It’s important to be aware, however that if you spend less than 183 days, you may still be considered a tax resident if your primary centre of economic interests are in Spain, or close family members live in Spain.
READ ALSO: How Shakira’s tax battle in Spain could affect foreigners and the 183-day rule
Q: Do I have to declare my overseas bank accounts and properties?
Yes, in certain circumstances. If you’re a tax resident in Spain and you have more than €50,000 in foreign assets either in bank accounts or real estate or investments etc, you must declare it to the tax authorities here.
It means you will have to submit an annual informative declaration known as Modelo 720. It’s important to note that it doesn’t mean you’ll be taxed on this amount, it’s simply for information purposes, but if you fail to report it or file incorrectly then you could face fines.
Q: Will I have to pay Spain’s Wealth Tax?
It depends on the total value of your assets. Wealth tax (Impuesto sobre el Patrimonio) is an annual tax on the net value of your worldwide assets held on December 31st each year.
In 2026, the general state tax-free allowance is €700,000, with up to €300,000 exempt for a main home, meaning that you’ll only have to pay wealth tax above these amounts.
It’s worth keeping in mind, however, that different regions set their own rates and allowances. In Catalonia for example, the personal tax-free allowance is €500,000, instead of €700,000.
The Spanish government also introduced a Solidarity Tax on Large Fortunes (Impuesto Temporal de Solidaridad de las Grandes Fortunas), which generally applies to net wealth exceeding €3 million, factoring in personal allowances.
READ ALSO: Everything you need to know about Spain’s wealth tax
Q: What are the visa and income requirements for non-EU retirees?
If you’re from a non-EU country such as the US, Canada, the UK or Australia for example, you will have to apply and qualify for a visa to be able to retire in Spain. The best visa for this purpose is the Non-Lucrative Visa or NLV.
Under the rules of this visa, you’re not allowed to work, either in Spain or remotely, but you must prove that you earn passive income like from a pension or rent from a property you own. The amount you need to prove is tied to Spain’s IPREM, an economic index used in Spain as a reference for granting public financial aid. The amount you need to have for the NLV is 400 percent of the IPREM, which for 2026 is €600 per month. This means for the NLV you need to have €2,400 per month. Each accompanying family member requires an additional 100 percent of the IPREM (€600 per month). You will also need to pay for private health care as mentioned above.
READ ALSO: The only visa Brits and Americans can now apply for to retire to Spain
Q: How does Spanish inheritance tax work, and do I need a Spanish will?
Spain applies inheritance tax (Impuesto sobre Sucesiones y Donaciones) directly to the recipient. Under Spanish law, children have a protected right to a significant portion of the estate, regardless of where they live.
According to Albir Abogados law firm, if your assets are located in Spain, your children must file and pay Spanish Inheritance Tax even if they live in the UK.
Under EU Regulation 650/2012, succession is governed by the law of the country where the deceased had habitually resided, however according to Article 22 a person can choose the inheritance laws of the country they have nationality from. It means that a French person living in Spain can choose French law for example. According to law firm Peralta Rojas “The choice must clearly be shown in the terms of their will”.
Q: Can my foreign pension be paid directly into a Spanish bank account, and what about currency risk?
Yes, many government pension offices allow international direct deposits in local currency, such as Euros. Some private schemes, however, might only pay in the currency where they’re located though.
Despite the fact that a government pension can be paid directly into your Spanish bank account, it may not always be advisable though. Many banks here levy steep transfer charges and unfavourable exchange rates, so it’s better to use specialised transfer platforms instead that don’t charge you as much in fees.
READ ALSO: How to transfer a UK pension to Spain
Q: Can I exchange my foreign driver’s licence for a Spanish one?
This will depend on where you’re from. If your licence is from an EU or EEA country it will remain valid in Spain, so you won’t necessarily need to switch. If you’re from a non-EU country, it will depend on if your country has a bilateral exchange agreement with Spain.
If it does, you can exchange your licence for a Spanish one, but if not or if you haven’t exchanged it within six months of residing in Spain, you must take a Spanish driving test and pass both the practical and theoretical exams to get a Spanish licence.
READ ALSO: Can I exchange my foreign driving licence for a Spanish one?
Q: What local property taxes will I owe as a homeowner or tenant?
If you purchase a property in Spain, you will have to pay what’s known as the IBI tax (Impuesto sobre Bienes Inmuebles). It’s like an annual council real estate tax. You will also have to pay monthly community fees for the upkeep of the building and shared expenses such as a cleaner for common areas or maintenance for a shared pool. You may also have to pay rubbish tax, but this will depend on where you live in Spain.
READ ALSO: What is Spain’s IBI tax and how do I pay it?
If you rent a home in Spain, generally you won’t have to pay any of these taxes as it should fall on the landlord, but look over your contract carefully as sometimes they will state that you have to pay them.
Our journalists at The Local are not tax professionals, if you are in any doubt about what taxes you must pay as a pensioner, visas or inheritance laws, you should contact a lawyer.
