Yes, Spain generally taxes U.S. retirement income for residents, but the U.S.-Spain Tax Treaty (CDI) and specific income type determine the exact tax treatment, with private pensions often taxed in Spain, Social Security primarily taxed in the U.S. (but reported in Spain), and U.S. Federal Pensions sometimes exempt, requiring professional tax advice for specifics like IRAs and 401(k)s.
Tax implications for US expats living in Spain
As such, they are subject to Spanish taxes on their worldwide income — including foreign retirement income.
Non-residents, however, are taxed only on their Spanish-sourced income. Although the U.S. and Spain have a tax treaty, U.S. expats in Spain can face double taxation due to the U.S.'s citizenship-based tax system.
Vibrant expat community: As of 2024, there are around 41,000 American expats, many of whom are retired, living in Spain. Affordable cost of living: Retiring in Spain can mean spending less of your retirement savings. Rent and consumer prices are almost 31% lower than in the US.
Key Takeaways for Retiring in Spain
If you are a non-EU or US citizen, you need to have a residence permit, which is a Non-Lucrative retirement visa. Spain's retirement visa requires a minimum of €2,400 monthly income, €28,800 annual income. You can also add your dependents with an additional fee of €600 per person.
Absence from U.S. territory
Normally, persons who are not U.S. citizens may receive U.S. Social Security benefits while outside the U.S. only if they meet certain requirements. Under the agreement, however, you may receive benefits as long as you reside in Spain regardless of your nationality.
In calculating the proof of income for non-lucrative residency, you must have an annual income of 400% of IPREM in your bank account. The IPREM for 2025 remains at €600 per month. Therefore, as an individual, you will need to have €2,400 as a regular guaranteed monthly income or a yearly income of €28,800.
Spain also offers a rich cultural scene and easy travel within the EU. Cons can include bureaucracy, language barriers, and potential tax implications for foreign income. Some areas may also experience seasonal crowds or rising property prices.
Spain's Beckham Law offers a unique tax break for foreign professionals moving to Spain. If you qualify, you can pay a flat 24% tax rate on Spanish-sourced income—rather than Spain's standard progressive rates that reach as high as 47%.
What's Spain's 100% Tax All About? The proposed 100% property tax means that non-EU buyers, including British nationals, would need to pay a tax equal to the property's purchase price. So, let's say you choose to purchase a villa costing €200,000, you will need to pay an extra €200,000 in taxes.
Portugal and Spain both offer relatively affordable costs of living compared to other Western European countries, but the cost of living in Portugal generally has a slight edge in terms of affordability.
For qualifying U.S. expats, Spain's Beckham Law offers something rare in international tax: simplicity and savings. A flat 24% tax rate on Spanish income—and no Spanish tax on your global earnings—can mean thousands saved over six years. But making it work means understanding more than just Spanish tax law.
Frequently Asked Questions: Retiring in Spain as a US expat
Will I have to pay taxes in Spain as a retiree? If you live in Spain for more than 183 days in a year, you become a tax resident and must pay Spanish taxes on your worldwide income. If you stay less than that, you'll only owe taxes on income earned in Spain.
The reasons for their exodus are as diverse as the expats themselves. Some grapple with the anxieties of navigating a labyrinthine bureaucracy, their hopes for a secure retirement in Spain clouded by concerns about residency, healthcare, and pensions.
However, non-EU citizens, including Canadians who want to retire in Spain must obtain an appropriate visa to live in Spain as a retiree. You can apply for a Golden visa or a Non-Lucrative visa. Each visa has specific eligibility criteria and requirements; we'll discuss each in detail in subsequent sections.
Is Portugal or Spain safer for tourists? Portugal tends to have slightly lower crime rates and is often considered more tranquil, especially in smaller towns and coastal villages.
Unfortunately, the Golden Visa, which granted residency to those who invested €500,000 in property in Spain, ended on 3 April 2025. This route is no longer available to new applicants.
A Spanish bank account is essential when buying property in Spain, but the setup process is relatively easy. While fees and queues can be frustrating, having a local account will make managing your property much more convenient.
Portugal, Spain, and Germany are among the easiest countries to live in, offering clear visa options and supportive expat communities. Ireland and Italy are attractive for retirees, while Malta and Greece offer sunny destinations with straightforward residency programs.