Retiring to Spain from the UK: your complete guide

Dreaming about your retirement under the Spanish sun? It's simple to understand why, given that Spain provides beaches, warm weather, and sangria just a quick journey from the UK. 

Thanks to its large community of UK expats, adaptation to this country can be smooth. With plenty of activities and an excellent healthcare system, Spain could be the perfect place for your retirement.

Continue reading to understand everything about retiring in Spain, including details about buying a property here. 

Is it a good idea to retire in Spain?

Spain is a popular choice for retirement, thanks to its warm weather, relaxed lifestyle, and generally lower cost of living than the UK. 

Consumer prices are 21.1% lower than in the UK (excluding rent), and property prices are generally more affordable than in many British cities. For instance, buying an apartment outside the city center is 49.4% more expensive than in Spain.

How to retire to Spain from the UK?

UK citizens are allowed only a 90-day stay without a visa. To retire in Spain after Brexit, the first step is obtaining the necessary visa. 

Non-EU citizens have two options: a long-stay visa (visado nacional) or a retirement visa (visado de residencia no lucrativa). Both options allow you to stay in Spain for over 90 days. 

How to get a retirement visa for Spain

First and foremost, it’s essential to demonstrate you have enough income to sustain yourself in Spain. To retire comfortably in the country, you'll need you'll need approximately £1,500 to £1,650 per month, which translates to about £18,000 to £19,800 annually.

The resident permit you’ll receive is valid for 1 year and is granted to non-EU citizens who wish to stay in the country without working. 

Required documents include:

• Completed visa application forms
• A recent passport-sized photograph
• A valid passport with biometric data
• Proof of financial means
• Health insurance
• A criminal record certificate
• A medical certificate
• Proof of residence
• Payment of fees

Some of the most important things to consider when you want to retire in Spain include:

1. Researching the perfect location and planning your move
2. Taking out healthcare insurance (your insurance must offer the same coverage as the public healthcare system in Spain, except if you receive a UK state pension and possess a UK-issued S1 healthcare entitlement certificate)
3. Applying for a non-lucrative or retirement visa
4. Finding a place to live: renting or buying a property
5. Applying to receive your UK pension in Spain
6. Registering as a resident

What are the best places to retire in Spain?

Spain offers a wide range of options. Depending on how you want to spend your days, you can choose a location for your lifestyle.

Costa del Sol

Costa del Sol is ideal for retirees looking to combine tranquil beachside living with rich cultural experiences. Malaga, Marbella, and Torremolinos are widely favored destinations among British expats in search of abundant sunshine and amazing Andalusian cuisine. 

Canary Islands

The Canary Islands in the Atlantic Ocean offer an ideal setting for those looking for a slow pace of life. Costa Adeje and Playa de las Américas in the south are especially popular among UK citizens. 

This archipelago promises a tranquil lifestyle with opportunities for outdoor adventures. However, it's important to note that the islands attract many tourists, and the local economy heavily depends on this industry.

Balearic Islands

The Balearic Islands are a beautiful group of islands in the Mediterranean Sea. Mallorca, Ibiza, and Menorca offer retirees a lovely Mediterranean culture, stunning scenery, and sunny weather for an enjoyable retirement. 

However, if you're seeking from time to time some entertainment, Ibiza could be your destination for an endless party experience. 

Madrid

Madrid can be an option worth considering if you enjoy being where things happen. It's also a well-connected city, and you can explore more areas of Spain. Being the capital of Spain, you'll come across numerous expats to make friends with.

Barcelona

Barcelona offers both mountains and the sea; it's a city teeming with tourists and plenty of activities to keep you from getting bored. Thanks to many tourists, if you decide to return to the UK for a while, you can rent out the apartment for a short period, as long as you have a valid tourist license.

It's worth keeping in mind that retiring in a city like Madrid or Barcelona is more expensive than retiring in a rural area of Spain.

How much does it cost to buy a property in Spain?

In September 2023, the average price per square meter for residential properties in Andalusia was 1,931 EUR, marking a 5.92% increase compared to September 2022, when it stood at 1,823 EUR per m2.

When it came to properties in the Canary Islands region, the province of Santa Cruz de Tenerife recorded the highest average asking price per m2 at 2,756 EUR. Conversely, the province of Las Palmas had the lowest average price, at 2,107 EUR per m2.

Barcelona and Madrid are among the most expensive places to buy a property. In Barcelona, the average price is 4,024 EUR/m2, while in Madrid, it reaches 4,011 EUR/m2.

A mortgage can enhance your property budget and serve as a valuable investment.

With services like Homevest, applying to multiple banks is made simple through a single application process, allowing you to effortlessly upload your documents. This enables you to compare a variety of competitive mortgage offers and connect with banks to discover the perfect fit for your requirements.

How easy is it to get a mortgage in Spain to buy a property?

Getting a mortgage in Spain as a retiree can be a good option if you have a stable income and meet the eligibility criteria set by Spanish banks. 

However, the ease of obtaining a mortgage can vary based on factors such as your age, financial situation, and the specific bank's policies.

Eligibility criteria

You should be a maximum of 75 years old when you finish paying back the loan. Some banks allow up to 80 years. This means that mortgages are shorter, typically lasting 10 to 15 years.

As the mortgage term is shorter, the interest is lower than a 30-year mortgage. In this scenario, the buyer can also save on life insurance, which typically covers individuals up to the age of 65, and amortization insurance, which usually provides coverage until 70.

Requirements

To apply for a mortgage in Spain as a retiree from the UK, you'll need to provide the following documents:

• A copy of your national identity document or passport
• A certificate of annual tax payments and deductions 
• Proof of your primary residence (e.g. lease agreement or land registry title)
• Your NIE number (Foreigner Identification Number)
• Bank statements covering the past 6 months
• Statements confirming your savings and investments (to demonstrate your deposit)
• A credit report
• Property details

Mortgage options

As a UK citizen, you'll have access to mortgage funding from Sabadell, Santander, CaixaBank, Bankinter, and Cajasur, as these are the primary Spanish banks that offer mortgages to those earning in GBP.

Whether you're considering Santander, Caixa, or any other Spanish bank, make sure you have your P60 form ready. This tax document is essential for evaluating loan offers, as it details your income, taxes, and contributions from the previous year.

Learn more about their mortgage offerings, and continue reading to discover the best mortgages in Spain for UK residents and explore your options. 

If you're looking to compare mortgages in Spain directly from the UK, Homevest can easily assist you. Homevest offers a convenient platform that grants access to leading non-resident banks in Spain, including CaixaBank, Santander, Sabadell, Cajasur, and Bankinter. 

Explore the benefits of Homevest:

• prioritize your case and negotiate the most competitive mortgage offer for you
• assist you in comparing offers from top Spanish banks
• speak your language and understand the local property market

Retiring in Spain: pros and cons

Pros

• low cost of living compared to the UK
• a strong healthcare system 
• the possibility of transferring your pension to Spain from the UK
• the warm weather and the relaxed pace of daily life
• plenty of direct flights to the UK for visits from your family and friends
• property prices are more affordable than in your home country
• you can easily travel within the Schengen area once you have a Spanish visa

Cons

• the necessity of a visa due to post-Brexit changes
• your foreign pension is treated as a source of income so you’ll need to pay taxes
• if you're selling your property in your home country, you'll need to pay capital gains tax. Wealth tax applies to assets worth more than 700,000 EUR
• the main language is Spanish, and in some cities, it can be difficult without speaking the local language

Retiring to another country can be challenging, but it can also be the most beautiful thing you can give yourself, especially if it involves a beach, sunshine, good food, and a slow-paced life.

Obtaining property financing in Spain from the UK may appear intimidating, but with the right assistance, securing the necessary funds becomes a more achievable goal.

Remember, Homevest is here to streamline the process and assist you in saving time.

Sources used and checked in October 2023:

1. Cost of living in the UK vs. Spain
2. Housing pricing in Spain
3. Retirement visa Spain
4. Retire to Spain after Brexit

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.