# Retiring to Spain



## ChrisMcNab (Apr 29, 2012)

First, forgive me if this topic has been raised before - I've searched but not found anything directly relevant.

My wife & I are over retirement age and are seriously considering selling our UK home & furniture to buy a 3-bed apartment or similar in Spain although we intend to rent initially and find a good location. We'll have sufficient capital after a purchase, which when added to my pensions, will mean we are not a drain on the country. We don't want to find work and are aware of the higher cost of prescription drugs. We don't speak Spanish beyond tourist level but will attempt to improve. We are aware of the dire economic situation (not just Spain of course) but think this will actually help us as the cost of living should fall.

The question - are we living in cloud-cuckoo land and missing some obvious drawbacks?


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## xabiaxica (Jun 23, 2009)

ChrisMcNab said:


> First, forgive me if this topic has been raised before - I've searched but not found anything directly relevant.
> 
> My wife & I are over retirement age and are seriously considering selling our UK home & furniture to buy a 3-bed apartment or similar in Spain although we intend to rent initially and find a good location. We'll have sufficient capital after a purchase, which when added to my pensions, will mean we are not a drain on the country. We don't want to find work and are aware of the higher cost of prescription drugs. We don't speak Spanish beyond tourist level but will attempt to improve. We are aware of the dire economic situation (not just Spain of course) but think this will actually help us as the cost of living should fall.
> 
> The question - are we living in cloud-cuckoo land and missing some obvious drawbacks?


:welcome:

tbh the cost of living isn't THAT different here - yes, in some areas you can live VERY cheaply - but they aren't usually the areas where expats choose to live - but if you've done your sums & are sure then why not?


as for being a drain on the country - you won't be - the country won't give you ANYTHING - so no need to worry about that 


the only caveat I'd add really, is that there are a lot of changes afoot atm & it's not clear if the current reciprocal agreement between the UK & Spain for healthcare for pensioners will continue - the DWP recently posted on here that they are 'in discussion', because the Spanish govt. has announced changes which will come into effect at the end of August which don't quite fit with the agreement as it stands

if that were to disappear then you'd have to have private healthcare, so would need to factor that cost in - so it might be worth waiting to see what happens over the next few months


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## Lucie123 (Dec 7, 2011)

Aslong as you have enough to live off then there really shouldnt be an issue imo. Like you say you dont need to work which is the major problem for people who want to move. after all if your pension isnt enough to live on spain then it certainly wont be enough to live off in the uk!!.


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## xabiaxica (Jun 23, 2009)

Lucie123 said:


> Aslong as you have enough to live off then there really shouldnt be an issue imo. Like you say you dont need to work which is the major problem for people who want to move. after all if your pension isnt enough to live on spain then it certainly wont be enough to live off in the uk!!.


ahhhh - but in the UK there a lots of 'side benefits' though aren't there??

istr that my parents got quite a lot of other benefits on top of the state pension which aren't exportable to Spain


as I said though - if the sums do add up, then why not?


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## fergie (Oct 4, 2010)

Hi, if you are financially stable after buying a place here, with pensions and some capital in case of emergency, then I would say go for it. It is younger people who need to work having the problems, because there is no work, which is very sad, so it is a least one advantage of getting older!
Property prices are a lot lower here at the moment so there are plenty of places to choose from, but same with Uk properties they are difficult to sell, we still haven't sold ours, but luckily have a long term tenant in our house.
One thing I will say is that there are only private care agencies should one of you become infirm as you get older. We have private medical insurance so that we are not a drain on the state.
The weather tends to be kinder nearer the coastal areas, you would very rarely get below freezing temperatures in winter.
We are pensioners, settling nicely into our new area, and learning Spanish although it is not as easy as when you are younger, we love to buy healthy and very fresh Spanish food produce and get to know the local people. We enjoy supporting local Spanish business's when ever we can in our adopted country. Our children have forgiven us for coming here they are all turned 30yrs old, and enjoy coming over for holiday with the grandchildren.


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## James3214 (Jun 25, 2009)

I don't think you are living in cloud cuckoo land and it sounds like it is a sensible move in your circumstances but can you not keep your UK property and maybe let it before deciding if it is the right move? With the sliding EUR that GBP rent might be worth a little more than you thought? and you will always have that option of coming back to it if things don't work out.


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## Lucie123 (Dec 7, 2011)

xabiachica said:


> ahhhh - but in the UK there a lots of 'side benefits' though aren't there??
> 
> istr that my parents got quite a lot of other benefits on top of the state pension which aren't exportable to Spain
> 
> ...


Only if you have i think less than eight thousand in savings


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## djfwells (Sep 28, 2009)

You have rightly identified issues with the language and healthcare, which many don't so that is to your credit.
You also mention renting for the short term, which is also highly recommended.
Spain is fantastic place to live - don't let anyone tell you otherwise - as long as you don't have to work for a living and are able to live comfortably off your Uk pensions(s) / assets.
It sounds to me like you are on the right track.


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## Seb* (Mar 22, 2009)

Overall you should be fine. I would be careful with buying property right now though. House prices are falling and some people are talking about a further drop of up to 35% over the next years. It might not be the right time to invest in property.


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## fergie (Oct 4, 2010)

We didn't mind investing in property here, and we have kept lots of the locals busy with employment re-furbing it to our comfort standards. We love it here, love the weather, love the people and know that it may depreciate in value, but there are no pockets in shrouds, so we are happy as little sand boys and girls, and feel much healthier already.


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## mrypg9 (Apr 26, 2008)

If you have no dependents, a sufficient retirement income and intend Spain to be your permanent home, you will be happy and comfortable here.

I'm not sure I would sell my UK property though. We sold all properties we owned but we do not have to worry about leaving an inheritance as my son is in no need of any support from us - in fact we shall be looking to him when/if our money runs out.

When we were planning our move, we did our calculations on the worst-case basis of parity between £ and euro - at that time the £ bought 1.22 euros. Shortly after we arrived in late 2008 that parity very nearly was achieved!!

I think that many people falsely assumed that exchange rates were fixed and didn't plan for a significant reduction in their pension/investment incomes. During our years in the Czech REpublic we had seen our income drop in value by one-third. We were lucky in that this depreciation had no effect on our standard of living. But it's a factor that should be considered when planning a move.


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## Lunar-Tech (Nov 21, 2011)

ChrisMcNab said:


> First, forgive me if this topic has been raised before - I've searched but not found anything directly relevant.
> 
> My wife & I are over retirement age and are seriously considering selling our UK home & furniture to buy a 3-bed apartment or similar in Spain although we intend to rent initially and find a good location. We'll have sufficient capital after a purchase, which when added to my pensions, will mean we are not a drain on the country. We don't want to find work and are aware of the higher cost of prescription drugs. We don't speak Spanish beyond tourist level but will attempt to improve. We are aware of the dire economic situation (not just Spain of course) but think this will actually help us as the cost of living should fall.
> 
> The question - are we living in cloud-cuckoo land and missing some obvious drawbacks?


My wife and I took early retirement and moved here a few years ago. We come from the north of England and I can tell you that the lifestyle here is much better! 
As far as the cost of living is concerned I find it cheaper here as long as you don't want all British products. Unlike the UK we can afford eat out whenever we want! Since you are retired under EU rules your health care will be supplied under the Spanish system paid for by the UK government regardless of any reciprocal agreement. 
Since my wife and I are below retirement age my wife works to provide us with health care since the UK retirement age keeps moving further and further away.
All in all its a good life here but not all together the idyllic dream .
You do really need to be very very careful when buying property in Spain many people have lost their life savings here!


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## xabiaxica (Jun 23, 2009)

Lunar-Tech said:


> My wife and I took early retirement and moved here a few years ago. We come from the north of England and I can tell you that the lifestyle here is much better!
> As far as the cost of living is concerned I find it cheaper here as long as you don't want all British products. Unlike the UK we can afford eat out whenever we want! *Since you are retired under EU rules your health care will be supplied under the Spanish system paid for by the UK government regardless of any reciprocal agreement. *
> Since my wife and I are below retirement age my wife works to provide us with health care since the UK retirement age keeps moving further and further away.
> All in all its a good life here but not all together the idyllic dream .
> You do really need to be very very careful when buying property in Spain many people have lost their life savings here!


that _*is *_the current reciprocal agreement which _*might not*_ continue


fingers crossed & I'm sure the UK will do everything within reason to continue it - but it is 'under discussion' so who knows what will happen


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## ChrisMcNab (Apr 29, 2012)

First, thank you all for taking the time to reply - believe me, it's appreciated and has been VERY instructive. I feel I have to do a lot more research so I think a two month 'tester' is the way forward; I'll post again with my experiences.


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## Wannabe Expat (May 2, 2012)

*Spanish Inheritance laws on UK property!*



James3214 said:


> I don't think you are living in cloud cuckoo land and it sounds like it is a sensible move in your circumstances but can you not keep your UK property and maybe let it before deciding if it is the right move? With the sliding EUR that GBP rent might be worth a little more than you thought? and you will always have that option of coming back to it if things don't work out.


I have just discovered that if you do keep your house in the UK and acquire tax residence status in Spain, your property in the UK would be subject to the tough Spanish inheritance tax laws on your death. This would also apply interspouse as well as to your kids and the only annual exemption is just under 16,000 Euros. I'm sure not many UK ex-pats realise this. Have done a lot of research on this and it certainly reduces the size of your estate in the UK unless you can think of a way round it. Actually it's technically the beneficiary who pays the IHT and not your estate as here in the UK, but it is still tough for your kids!


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## ChrisMcNab (Apr 29, 2012)

That's good fun! No matter what you plan, there's some politician there waiting to make sure it doesn't work. Thanks for the info - most useful.


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## Leper (May 12, 2010)

Everything is in your favour. I dont know why you are waiting. I would advise not to sell your house in the UK and rent in Spain. It is a renters market now and probably will be forever. Two bedroom decent properties can be rented in decent resorts for €500 per month (please note Euro not GBP£).

Start actively planning now, go in October, stay until April, why confine yourself to one area only spend time in several resorts, return to UK in May - go again the following October. Have the best of both worlds in the cheapest possible way.


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## Stravinsky (Aug 12, 2007)

Wannabe Expat said:


> I have just discovered that if you do keep your house in the UK and acquire tax residence status in Spain, your property in the UK would be subject to the tough Spanish inheritance tax laws on your death. This would also apply interspouse as well as to your kids and the only annual exemption is just under 16,000 Euros. I'm sure not many UK ex-pats realise this. Have done a lot of research on this and it certainly reduces the size of your estate in the UK unless you can think of a way round it. Actually it's technically the beneficiary who pays the IHT and not your estate as here in the UK, but it is still tough for your kids!


I'm not knocking what you say, but solicitors in both the UK and also in Spain, as well as documentation I have read over the last years denotes that when you peg it, your UK will will take precedence over your Spanish will and your UK home will not be subject to Spanish IHT

In fact if I go first here my wife inherits, and she will (at the current basis) pay hardly any IHT at all. I know this, as we have a neighbour who has gone through it and indeed paid NO IHT at all.

To the OP, i know it is all down to life style, but I still struggle to cope with the view that it is as expensive to live here as it is in the UK. So far as I am concerned it simply isnt the case, and I own places in both countries and spend time in both countries. I retired early here, in fact 13 years before I become a pensioner, and as we dont have to work we find it a good place to live. As stated, if a pensioner then you are able to get healthcare here, and although rules have changed recently I'm not sure that the actual reciprocal health care for pensioners will go as it is part fo the EU agreement

So, as a retiree not needing to work I am sure you would find a better pace of life here ....... and then of course there is the weather .......


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## Wannabe Expat (May 2, 2012)

Stravinsky said:


> I'm not knocking what you say, but solicitors in both the UK and also in Spain, as well as documentation I have read over the last years denotes that when you peg it, your UK will will take precedence over your Spanish will and your UK home will not be subject to Spanish IHT
> 
> In fact if I go first here my wife inherits, and she will (at the current basis) pay hardly any IHT at all. I know this, as we have a neighbour who has gone through it and indeed paid NO IHT at all.
> 
> ...



That's great news about the IHT on the UK home - there seems to be a lot of conflicting info out there on the net! Sounds good to me! Will definitely consider taking the plunge earlier than originally planned!


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## Stravinsky (Aug 12, 2007)

Wannabe Expat said:


> That's great news about the IHT on the UK home - there seems to be a lot of conflicting info out there on the net! Sounds good to me! Will definitely consider taking the plunge earlier than originally planned!


There are those around that say starting a UK limited company and using it to own your Spanish property will also be a good remedy. I can see the logic behind it, because when you die YOU dont actually own the house, the Ltd Company does. However, they charge ridiculous amounts of money to set it up. Ive hear £5k banded about, and as you can register your own Ltd Company iin the Uk for about £50, it seems a little bit much


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## Wannabe Expat (May 2, 2012)

*Still not convinced!*



Wannabe Expat said:


> That's great news about the IHT on the UK home - there seems to be a lot of conflicting info out there on the net! Sounds good to me! Will definitely consider taking the plunge earlier than originally planned!


I have re-read your post and still have queries. What you are talking about is the law of succession and the fact that if an ex-pat in Spain has a UK will, it will govern the way his or her property devolves to the heirs so the Spanish laws of succession will not apply. I think this is very clear from most of the info available on the net. However, this is a totally separate issue from whether Spanish IHT is payable on that property in the UK. According to some sites belonging to reputable accountants the world wide assets of a UK ex-pat tax resident in Spain are subject to Spanish IHT on his or her death. One Spanish lawyer site agreed that this is the case but in practice if you have a Spanish will which refers only to the Spanish property you will only have to file evidence of payment of Spanish IHT on that property and no questions will be asked about any property in the UK. this may be the case in practice, but the point is 'is this legal'?

The reason ex-pats resident in Spain do not pay much IHT at all if their spouse dies is that in Valencia IHT has virtually been abolished inter spouse for Spanish owned property provided that the beneficiary lives in Valencia. This would not apply where beneficiaries are not resident in Spain unless they agree not to sell the property for 10 years. Not much use for our son in London who would want to use the funds in part purchase of a flat there!

Have a search around on the net and let me know what you think. If anyone has any personal knowledge of IHT being payable on a UK property because the deceased owner was tax resident in Spain at the time of death, I would be grateful for any comments.


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## Stravinsky (Aug 12, 2007)

Wannabe Expat said:


> The reason ex-pats resident in Spain do not pay much IHT at all if their spouse dies is that in Valencia IHT has virtually been abolished inter spouse for Spanish owned property provided that the beneficiary lives in Valencia..


Its not just Valencia  

I take your point, it very much depends on individual circumstances.

I mentioned that the Ltd Company is an option. If you own a property in Spain but become non resident then there is no question of liability to IHT on the UK property at all. The other option is to sell your UK property either fully or partly to your inheritors. This can still be done with a right to live in it.
Take out a life insurance


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## Wannabe Expat (May 2, 2012)

*Reiting to Spain and IHT on UK Property*



Stravinsky said:


> Its not just Valencia
> 
> I take your point, it very much depends on individual circumstances.
> 
> ...



Yes I know it's other community areas as well which have exemptions to IHT for Spanish residents. I am only really interested in the Valencia area to live in. I think we may consider gifting it to our son before we leave for Spain and set up some sort of trust for us to get the rent. We can't afford to spend one part of the year in Spain and the other half in the UK as need the rent from the UK property. Too old to get life insurance cheaply unfortunately!

Still not giving up on the idea - am sure can come up with a workable solution.

Do you think the cost of living round the Oliva area is cheap?

Many thanks for your input


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## baldilocks (Mar 7, 2010)

ChrisMcNab said:


> First, forgive me if this topic has been raised before - I've searched but not found anything directly relevant.
> 
> My wife & I are over retirement age and are seriously considering selling our UK home & furniture to buy a 3-bed apartment or similar in Spain although we intend to rent initially and find a good location. We'll have sufficient capital after a purchase, which when added to my pensions, will mean we are not a drain on the country. We don't want to find work and are aware of the higher cost of prescription drugs. We don't speak Spanish beyond tourist level but will attempt to improve. We are aware of the dire economic situation (not just Spain of course) but think this will actually help us as the cost of living should fall.
> 
> The question - are we living in cloud-cuckoo land and missing some obvious drawbacks?


Sorry but I don't know where you get the idea that prescription drugs here are more costly. If you have to pay, you will find that they are much less costly than the UK's blanket prescription charges such as £7.65 for a packet of aspirin that you could buy for less than 50p. You can buy over the counter (i.e. no prescription) many more things than in the UK

As an OAP you will be entitled to free prescriptions until the 10% charge starts which will still be much less that the UK charges.

I notice that further in the thread Inheritance tax subject is raised. If you have no outside assets and are living in Andalucia, there is a 98% exemption plus another allowance which means that a spouse virtually pays no IHT.


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## Stravinsky (Aug 12, 2007)

Wannabe Expat said:


> Yes I know it's other community areas as well which have exemptions to IHT for Spanish residents. I am only really interested in the Valencia area to live in. I think we may consider gifting it to our son before we leave for Spain and set up some sort of trust for us to get the rent. We can't afford to spend one part of the year in Spain and the other half in the UK as need the rent from the UK property. Too old to get life insurance cheaply unfortunately!
> 
> Still not giving up on the idea - am sure can come up with a workable solution.
> 
> ...


The cost of living around here is certainly less than in the UK on the basis that you adopt a Spanish lifestyle and dont go buying UK foods from the UK supermarkets

When we came here we used to go to Carrefour twice a month. It wasnt particularly cheap, but at the time we werent bothered. Then the crisis and the rate of exchange disaster happened and we decided to take more care. We now go to Aldi and / or Lidl for all we can get from there and then Mercadonna for the rest. We have am place in the UK and we go back there from time to time. When we do we spend money like water. A local trip to the supermarket we kiss good bye to £120 - £150 and that doesnt seem to last us long. Oliva is also historically an agricultural town. theres a good market each Friday with fresh fruit and veg at good prices.

Thats the thing about shopping in Spain. You cant get everything cost effectively from one place, you have to do a round trip . Suits pensioners but it must be a nightmare for those that work.

On the IHT thing .... there ARE ways of lessening the blow. If you go before your spouse you are unlikely to pay IHT, its when the second goes that it can be costly for your kids. I dont plan to own my UK home in time  In an ideal world I wont own a villa in Spain when I am much older .... but thats another story and another challenge


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## Wannabe Expat (May 2, 2012)

*Retiring to Spain and cost of living*



Stravinsky said:


> The cost of living around here is certainly less than in the UK on the basis that you adopt a Spanish lifestyle and dont go buying UK foods from the UK supermarkets
> 
> When we came here we used to go to Carrefour twice a month. It wasnt particularly cheap, but at the time we werent bothered. Then the crisis and the rate of exchange disaster happened and we decided to take more care. We now go to Aldi and / or Lidl for all we can get from there and then Mercadonna for the rest. We have am place in the UK and we go back there from time to time. When we do we spend money like water. A local trip to the supermarket we kiss good bye to £120 - £150 and that doesnt seem to last us long. Oliva is also historically an agricultural town. theres a good market each Friday with fresh fruit and veg at good prices.
> 
> ...


We do the same here, part Lidl, part Tesco and part local market (which has really cheap fruit- about half the price of Tesco's. We went to the street market in Oliva when we were there a few weeks ago. We would be looking to shop for and eat only local food and drink the local wine. We will be on a fairly tight budget in principle but with enough built-in contingency funds from capital to cover unexpected expenditure, dental bills, non-payment of rent by tenant at this end etc. etc.


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