The Expatriate Experience in Spain: A Comprehensive Guide

Spain has long been a popular destination for expatriates from around the world. With its warm climate, relaxed lifestyle, rich culture, and relatively low cost of living, Spain attracts a diverse expatriate community.

Expats in Spain

According to the most recent data available from the Organisation for Economic Co-operation and Development (OECD), over 8.2 million foreign-born residents live in Spain, making up approximately 17% of the total 48.35 million population.

More expats in Spain hail from Morocco than anywhere else—Moroccans make up 12.5% of the expat community in Spain and 2.1% of the overall population. Next are Columbia and Romania.

In terms of recent expat flows into Spain, more people have moved to Spain from Columbia (172,200 in 2022), Morocco (113,700 in 2022) and Ukraine (91,600 in 2022) than anywhere else.

Where do expats choose to live in Spain?

The expatriate community in Spain is particularly concentrated in coastal areas like Costa del Sol, Costa Blanca, and the Balearic Islands, as well as major cities like Madrid, Barcelona, and Valencia. (These areas are also popular with tourists, who must pay a nightly tourist tax to stay over) Many expats in Spain are retirees seeking a better quality of life, while others are working professionals, digital nomads, or entrepreneurs taking advantage of Spain's growing economy and startup scene.

British Expats in Spain

British citizens form one of the largest expatriate communities in Spain, with analysis of OECD data suggesting around 300,000 British nationals reside in the country. The UK ranks 8th in terms of accumulated stock in Spain (with close to 300,000 expats from the UK)—a high ranking owing to strong flows in 2020 and 2021, in particular. In 2022, 19,000 people moved from the UK to Spain, down from 33,900 in 2021 and 29,500 in 2020.

The British expatriate community has deep roots in Spain, dating back several decades when affordability and accessibility made Spain an attractive alternative to the UK.

British expats are particularly concentrated in areas like Costa del Sol (especially Málaga and Marbella), Costa Blanca (Alicante region), and the Balearic Islands. Many British residents have established their own communities, complete with British shops, pubs, and social clubs.

Following Brexit, the status of British expats has changed, requiring more paperwork and different residency processes compared to EU citizens. Despite these challenges, Spain remains a top destination for British nationals looking to relocate.

Are Expats Leaving Spain?

Recent years have seen some fluctuation in expatriate numbers in Spain. While there was concern about a potential exodus of British expats following Brexit, the anticipated mass departure hasn't fully materialized. However, there have been some noticeable trends:

Some older retirees have returned to their home countries due to healthcare concerns, particularly during the COVID-19 pandemic. Others have faced challenges with post-Brexit residency requirements, prompting some to reconsider their situation.

Conversely, the rise of remote work has attracted a new wave of younger expatriates to Spain. The introduction of Spain's Digital Nomad Visa in 2023 has made it easier for remote workers to legally reside in the country, offsetting some of the departures.

And there is a new worry for those thinking of relocating from outside the EU: Spain is considering a new tax of up to 100% on the value of properties bought by non-residents hailing from non-EU countries, including the UK. While this law is meant to discourage foreign buyers from purchasing property to make money from, exacerbating the housing crisis there, we expect that this new law will further discourage migration to Spain from outside of the EU.

But overall, while there have been some shifts in the expatriate demographic, Spain continues to maintain its appeal as an expatriate destination, with new arrivals balancing out those who leave in recent years.

Reasons to Move to Spain as an Expatriate

Spain offers numerous compelling reasons for expatriates to relocate:

Spain Expat Property Tax

Property taxation is an important consideration for expatriates in Spain. The main property taxes include:

Impuesto sobre Bienes Inmuebles (IBI): This is similar to council tax and is paid annually to the local municipality. Rates vary by location but typically range from 0.4% to 1.1% of the cadastral value of the property, which is usually lower than the market value.

Non-Resident Income Tax: Non-resident property owners must pay a tax on deemed rental income, even if the property isn't rented out. This is currently around 24% of 1.1% of the cadastral value for non-EU residents and 19% for EU residents.

Wealth Tax (Patrimonio): This applies to worldwide assets for residents and Spanish assets for non-residents. There's a general exemption of €700,000 per person, plus up to €300,000 for a primary residence for residents.

Capital Gains Tax: When selling property, expatriates are subject to capital gains tax, currently at 19% for EU residents and 24% for non-EU residents.

Inheritance Tax: This varies significantly by region, with some autonomous communities offering substantial reductions for close family members.

Plus, the above-mentioned proposed new tax on properties purchased by non-residents from non-EU countries. But if you become a resident in Spain, this tax would not apply.

It's crucial for expatriates to understand that tax residency in Spain is generally triggered by spending more than 183 days in the country within a calendar year, which can have significant implications for worldwide taxation.

Expat Spain Queuing Culture

Adjusting to local customs is part of the expatriate experience, and Spain's approach to queuing can be surprising for newcomers, especially those from the UK or Northern Europe where orderly lines are the norm.

In Spain, queuing culture is often more relaxed and less structured. In busy markets, small shops, or tapas bars, customers might cluster around a counter rather than form a line. People often rely on mentally tracking who arrived before them, and it's common practice to ask "¿Quién es el último?" (Who's last?) to establish one's place in an informal queue.

Government offices and banks typically use numbered ticket systems to manage queues more formally. Expatriates often note that patience and flexibility are essential when navigating Spanish queuing norms, which reflect the country's more relaxed approach to time and social interactions.

Spain Energy Bills for Expatriates

Understanding and managing utility bills is an important aspect of expatriate life in Spain. Energy costs in Spain have been subject to significant fluctuations in recent years:

Electricity: Spanish electricity bills can be complex, consisting of both fixed charges based on contracted power capacity and variable consumption charges. Many expatriates opt for the regulated tariff (PVPC) which offers time-of-use rates, with electricity being cheaper during off-peak hours.

Gas: Natural gas is not available in all areas of Spain, particularly in rural locations. Many households rely on bottled propane gas (bombonas) for cooking and heating.

Renewable energy: Spain has seen significant growth in renewable energy adoption, with many expatriates installing solar panels to reduce long-term energy costs. If solar panels can work in the UK, imagine how much energy they produce in parts of Spain!

Expatriates should be aware that energy bills in Spain often include taxes and other charges that can make up a substantial portion of the total. The IVA (VAT) on electricity is currently 5% (temporarily reduced from 21%), and there is also an electricity tax of 5.11%.

To manage costs, many expatriates adapt to local practices like using heating and air conditioning sparingly compared to what they might be accustomed to in their home countries.

What is an Expat?

The term "expatriate" or "expat" traditionally refers to a person who lives outside their native country, usually temporarily and for work-related reasons. The word comes from the Latin terms "ex" (out of) and "patria" (homeland or country).

In contemporary usage, an expatriate is often understood to be someone who has chosen to live abroad, typically retaining citizenship in their home country and maintaining ties there. Expatriates may relocate for various reasons, including:

The term is sometimes associated with certain privileges, as expatriates often maintain their original national identity and may live in communities with other expatriates from their home country.

Expat vs Immigrant

The distinction between the terms "expatriate" and "immigrant" is nuanced and sometimes controversial, as it can reflect underlying biases:

Expatriate typically connotes a temporary or voluntary move, often for professional, lifestyle, or retirement reasons. The person usually maintains strong ties to their home country and may plan to return eventually. The term is frequently applied to professionals, retirees, or citizens of wealthy nations who move abroad.

Immigrant generally implies a more permanent relocation, often with the intention of settling in the new country long-term or permanently. Immigrants may seek citizenship in their new country and integrate more fully into the local society and culture.

Critics note that these terms are sometimes applied inconsistently based on socioeconomic status, nationality, or race. For example, Western professionals working abroad are often called "expatriates," while people from developing countries doing similar work might be labeled "immigrants" or "migrant workers."

In Spain, many foreign residents embrace both identities—participating in expatriate communities while also integrating into Spanish society and culture. Increasingly, long-term foreign residents in Spain recognize the importance of integration and prefer to see themselves as immigrants contributing to their adopted country.

Expat Health Insurance

Healthcare is a crucial consideration for expatriates in Spain. The Spanish public healthcare system (Sistema Nacional de Salud) is highly regarded internationally, but access varies based on residency status:

EU citizens with an EHIC/GHIC card can access emergency care while visiting. Those who become residents can generally enter the public system by either working and contributing to social security or registering via the S1 form (mainly for retirees from EU countries).

Non-EU citizens typically need to show proof of comprehensive private health insurance when applying for residency.

Many expatriates opt for private health insurance even when eligible for public care, citing benefits such as:

Popular international insurance providers among expatriates in Spain include AXA, Bupa Global, Cigna, Allianz Care, and Sanitas (the Spanish subsidiary of Bupa). Premiums vary based on age, pre-existing conditions, and coverage level, but frequently range from €50-€300 per month per person.

When selecting health insurance, expatriates should consider:

Expat Car Insurance

Navigating Best car insurance as an expatriate in Spain presents unique considerations:

Spain requires all vehicles to have at least third-party liability insurance (seguro a terceros), though most expatriates opt for comprehensive coverage (seguro a todo riesgo) that also covers accident damage to your vehicle (while third-party only cover does not). Insurance costs in Spain vary widely based on factors including driving history, vehicle type, and location.

Expatriates face several specific challenges with car insurance:

Several insurance companies cater specifically to expatriates in Spain, offering services in multiple languages and understanding the unique situations of foreign residents. These include Liberty Seguros, Línea Directa, and Mapfre.

Many expatriates find that insurance comparison websites like Acierto or Rastreator can help identify the best rates. Additionally, banker's insurance (insurance offered through Spanish banks) sometimes offers competitive rates for customers with existing banking relationships.

For newly arrived expatriates, temporary car insurance options can provide coverage during the transition period before establishing longer-term arrangements.