The cost of living in Spain
The cost of renting in Spain varies greatly from area to area – as it does in most large nations. Rental costs in Madrid or Barcelona are about $14 per square meter (10.76 sq. ft.). On the coast or in central Sevilla, it’s about $7.50 – $8.90 per square meter per month. Elsewhere in the country, rental costs will be more like $5 per month per square meter.
The electricity bill for two people will be about $14 per month except for summer when it goes up about 30% if you have air conditioning.
Gas bills for two people, including a gas water heater and gas stove, are about $44.50 a month during the winter. Telephone bills are about $32 a month, plus the calls you make. Food for two people will run about $380 a month and a restaurant meal costs an average of $15.20 per person.
What this all amounts to is that to live in one of Spain’s major cities you will need a minimum of $1016 to $1150 per month. You will enjoy a bit more comfort at $1650 a month – which would include drinks, coffee and some local weekend excursions.
Taxes in Spain
Even retirees are taxed in Spain.
If you live in Spain as a non-resident and have assets in Spain, you must appoint a fiscal representative to carry out your tax duties. A foreign resident in Spain must also file an income tax return for personal obligations and on your worldwide income. Income tax rates go from 18% to 48% on earnings above around $89,400 at the time of this writing (July, 2010).
If you reside in Spain for more than six months per year, you will be considered a tax resident. Spain does have double taxation agreements with a number of other countries so if you have already paid taxes in the U.S., you can deduct this from your Spanish tax bill.
Spain also has a Patrimonio or annual wealth tax. It is levied on all assets in Spain – property, bank accounts, cars, bonds, stocks and shares. If you are a non-resident, this tax will be assessed on all your property, no matter its value. It is based on either the cadastral value, purchase value or value as estimated by the tax authorities – whichever is greater. The wealth tax is 0.2% on assets up to $197,000 and goes up to a maximum of 2.5%. In addition, there is a Value Added Tax (IVA)) or transfer tax (ITP) applied on resale properties. Both of these are currently 7%.
If you own property in Spain, you will also pay an annual property tax. This tax is based on the cadastral value – the official value of your house for tax purposes – rather than the price you paid for it. This tax varies a lot from town to town but you can expect to pay about 0.2% of the cadastral value of your property.
A large part of the Spanish cuisine derives from Roman, Jewish and Arab traditions. Several native foods of the Americas have been introduced to Spain and a modern Spanish chef would not be without potatoes, beans, tomatoes, and peppers.
Daily meals in Spain are usually made from fresh ingredients bought daily at a local market.
In Spain, like many countries, the cuisine varies greatly from one region to another. However, all Spanish cooking tends to have common characteristics such as:
- The use of olive oil in items such as fritters
- Using sofrito to start the preparation of many dishes
- Garlic and onions as major seasonings
- The custom of drinking wine throughout meals
- Serving bread with most meals
- A lot of salads – especially during the summer
- A piece of fruit or a dairy product for dessert
Real Estate in Spain
If you venture into the Andalucian hinterland – into Spain’s far west – along the Bay of Biscay, the Costa de la Lux or the Costa Azahar, you will find the real Spain. While this part of Spain is virtually unknown to foreigners, it offers mountain foothills with citrus groves and villages that cling to a centuries-old way of life.
You say rural living is not for you? For modern comforts, you can choose to live in the Costa Blanca and Costa del Sol regions along Spain’s Mediterranean coast as these areas are still among Europe’s best investments. On the other hand, homes cost much more in areas such as Marbella where a home purchased during pre-construction phase can increase 30% in value when completed. Many people buy and sell just for that reason.
Thanks to Spain’s geographical situation, its climate is very diverse – not even including its mountains.
The inland areas of the Peninsula have a continental Mediterranean climate, while Galicia and the coastal strip near the Bay of Biscay enjoys an oceanic climate. The country’s southeast region has a semiarid climate and the Andalusian plain along the southern and eastern coasts up to the Pyrennes have a Mediterranean climate.
As a rule, Spain’s interior has a continental climate with dry, hot summers and cold winters. The Mediterranean coast usually sees moderate, cloudy conditions with spring and summer rainfall. And the Atlantic Coast normally has cooler summers with fairly heavy rainfall in the winter.
Retiring to Spain
Retiring to Spain? Then a retirement visa is probably your best choice.
To get one of these, you will first need to meet the general requirements for Spain Visas. This means you will need to show such documents as a passport that’s valid for six months, four recent pictures, original marriage certificate, original medical certificate verifying that you’re free of quarantine diseases (including yellow fever, cholera and the plague), and proof of medical insurance that will cover you while in Spain.
Once you have a visa, you can apply for a retirement visa or visa de Jubilados that will allow you to reside in Spain as a retiree. In addition to the documents listed above, you will need an original certificate certifying that you receive a pension and it must specify the amount of the pension. You will also need proof of any other income source. These must total at least $2,000 annually, plus $1,700 for each dependent. And if you own property in Spain, you must bring original proof of ownership
When you arrive in Spain, you may also be asked to buy medical insurance so that you’re not a drain on the public medical system. Naturally, this can be difficult for retired persons.
Spanish is spoken throughout Spain and is the only language with official status. The principle language of government and trade is Castilian Spanish. However, Spain has a number of regional languages that are co-official in the communities where they are spoken.
The Spanish economy
Spain’s economy is the eight largest in the world and the fifth largest in Europe. It is considered to be the world’s 15th most developed country.
In fact, Spain’s economy created more than half of all new jobs in the European Union over a five-year stretch that ended in 2005.
However, a recession hit Spain, beginning at the end of 2008 caused primarily by a housing bubble that was punctured and mortgages began exceeding the value of the properties. Following a steep drop off in the country’s economy in late 2008 and throughout 2009, unemployment grew to 20%. It stabilized in the first quarter of 2010.
Spain is the world’s largest producer of olive oil. It also has large crops of wheat, vegetables, barley, sugar beets, citrus fruit, cork and grapes Its major industries are textiles and apparel, foods and beverages, metals and metal products, chemicals, ships, automobiles, machine tools, clay and refractory products, footwear, pharmaceuticals and medical equipment.
Health care in Spain is excellent. Today, there are many good hospitals and private clinics. But the costs of private health insurance vary dramatically, though it usually costs far less than you would pay in the U.S. As a rule, comprehensive health insurance for a person 55 to 60 years old will cost from $860 a year to around $2,000. A routine visit to a doctor is normally $35 to $55 and home visits are $50 to $100. A bed in a private hospital costs in the area of $125 a day or a total of $275 a day including doctors’ fees. National health care is available free or at reduced costs but to be eligible you must be contributing to Spanish social security or be receiving a state pension from another EU country.
Spain offers an amazing array of cultural activities.
The country’s culture is based on a variety of influences, including the Celts and Iberian cultures, the Romans, and Visigoths, Muslim Arabs and Basque.
In terms of architecture, the Romans left behind some of the most outstanding monuments in Spain. The Moorish invasion of 711 A.S. lead to eight centuries of its culture, followed by Renaissance architecture, Spanish Baroque and Neoclassicism.
Many of Spain’s architectural sites have been designated World Heritage Sites. Examples of the country’s architectural history, which can still be visited to this day, are the Great Mosque, the palaces of Alhambra, Cathedral of Santiago de Compostela, the Burgos Cathedral, the Palance of Charles V in Granada, and the Cathedral of Santiago de Compostela.
Today, Spanish architecture has become very amazingly contemporary as can be seen in buildings such as the Guggenheim Museum in Bilbao, The Auditorio de Tenerife, by Santiago Calatrava and the Ciutat de les Arts iles Ciències in Valencia.
Spain is also home to some of the world’s great museums, including Centrol Atlántico de Arte Moderno, the Archivo-Museo Don Alvaro de Bazãn and the Cólleccion Museográfica de las Villa de Camporrobles.
Retiring in Spain? Where to Retire in Spain? Be sure to check out these three areas
Most expats who retire to Spain do so in one of three coastal areas – the Costa del Sol, the Orange Blossom Coast or Costa Brava.
Costa del Sol. Most Europeans choose this part of the Spanish coastline because it has an excellent infrastructure, first-class medical facilities and real estate agents, lawyers and doctors who speak English. The Costa del Sol has some very exclusive areas such as the marine resort of Puerto Banus but also has some high-rise horrors. In fact, many of the resorts on the Costa del Sol feel about as Spanish as Munich.
As examples of property costs on Costa del Sol, an apartment in Alicante was recently offered for sale for $362,000, and a villa for $354,413.
Orange Blossom Coast. An hour north of Valencia is the heart of the Costa del Alhazar, the Orange Blossom Coast. It has acres of orange and almond groves as well as sun-kissed beaches. It has some of the same high-rise developments as the Costa del Sol but its backdrop of unscarred mountains tempers this.
Property values on this coast? An apartment in a residential area close to the beach on the Orange Blossom Coast (Benicario) was recently offered for sale at $62.200 and a coastal house was listed at $186,750.
Costa Brava. The picture-book province of Catalunya has Spain’s most spectacular scenery, the Costa Brava. While this area is not “virgin,” it has been mostly unsullied by mass tourism and boasts exquisite harbor villages, including Cap de Begur, Llafranc and Sa Tuna. This coast has seascapes that are absolutely gorgeous and feature crystal-clear, aquamarine waters.
Housing costs vary all over the place but a typical house on Costa Blanca may cost $149,000, $158,000 or more. Apartments on Costa Blanca can cost $177,300 or $216,500.
Reasonable housing costs, gorgeous coastlines, excellent medical care, mouth-watering food, a first-rate infrastructure, a reasonable cost of living – put all this together and what you end up with is one of the world’s 10 best places to retire.