A Must-Read For Anyone Considering Moving to Spain
Spain offers a fantastic quality of life, but it’s important to understand the financial requirements for obtaining Spanish residency, in order to make your move a success.
This detailed guide covers the income requirements for the most common residency options available to American and non-EU citizens, ensuring you have all the information you need to prepare for your application.
Understanding Income Requirements for Different Visa Types
Spain provides several residency permits, each with specific income thresholds. The most common options are the Non-Lucrative Visa and the Golden Visa.
Meeting these income requirements is key to your application, as it shows that you can support yourself and your family without relying on public services.
1. Non-Lucrative Visa
The Non-Lucrative Visa (also know as the Spanish Passive Income Visa) is a popular choice for retirees and those who wish to live in Spain without engaging in any work.
To qualify, you need to demonstrate sufficient financial resources to support yourself and your dependents.
As of 2024, the required income is set at 400% of the IPREM (Public Indicator of Multiple Effects Income), which is approximately $2,600 per month or $31,200 annually. For each additional family member, you must add around $650 per month.
Example: If you’re applying with a spouse, you’ll need to demonstrate an income of approximately $39,000 annually ($31,200 for yourself plus $7,800 for your spouse). For a family of four, the required annual income would be around $54,600.
This visa is ideal for those who have stable passive income, such as pensions, investment returns, or rental income, and who wish to live in Spain without the need to work.
2. Golden Visa
The Spanish Golden Visa is designed for those who wish to make a significant financial investment in the country in exchange for residency. The qualifying investment options include:
- Real Estate Investment: A minimum of €500,000 (approximately $540,000) in Spanish property.
- Government Bonds: A minimum investment of €2 million (approximately $2.16 million) in Spanish government bonds.
- Shares in Spanish Companies: A minimum investment of €1 million (approximately $1.08 million) in shares of Spanish companies.
The Golden Visa does not have a specific income requirement beyond the investment itself.
This visa is particularly suitable for individuals looking to establish a strong financial and legal connection with Spain, with fewer restrictions on working and living in the country.
Additional Considerations for Income Requirements
Passive Income vs. Savings
Spain allows you to use both passive income and savings to meet the financial requirements for residency.
Passive income can include earnings from pensions, dividends, rental properties, and other non-salaried sources. If relying on savings, it’s essential to show consistent account balances that meet the required thresholds over time.
Health Insurance
In addition to income requirements, you must obtain private health insurance that covers you fully during your stay in Spain.
The policy should have no co-pays or deductibles, and the cost can range from $50 to $200 per month depending on your age and coverage needs. This expense should be factored into your financial planning.
Exchange Rate Fluctuations
For those whose income is in a currency other than euros, exchange rate fluctuations can impact whether you meet the income requirements.
To safeguard against this, maintaining a financial buffer above the minimum required amount is advisable.
Practical Tips for Meeting Income Requirements
- Thorough Documentation: Ensure that all income sources are well-documented, with clear records such as bank statements, tax returns, and investment account statements. Spanish authorities scrutinize financial information, so organized and transparent documentation will go a long way.
- Stable Financial History: Maintain a consistent bank balance that exceeds the required threshold for several months before applying. This demonstrates financial stability and reduces the likelihood of application delays.
- Budgeting for Regional Costs: While meeting the visa’s income requirement is important, consider the cost of living in your chosen region in Spain. Major cities like Madrid and Barcelona are more expensive, so adjust your financial planning accordingly.
- Seek Professional Guidance: Navigating the Spanish residency application process can be challenging. Consulting with an immigration lawyer or financial advisor specializing in Spanish residency can help ensure you meet all financial and legal requirements, increasing your chances of a smooth application process.
Frequently Asked Questions (FAQ)
Can I use rental income from properties in the U.S. to meet the income requirement?
Yes, you can use rental income from U.S. properties to meet the income requirement for Spanish residency. You’ll need to provide detailed documentation, such as rental agreements and bank statements, to prove the consistency and reliability of this income.
Is there a minimum stay requirement in Spain for residency holders?
Yes, for most residency permits, including the Non-Lucrative Visa, you need to spend at least 183 days per year in Spain to maintain your residency status. This period is also important for determining your tax residency status in Spain.
Can I combine income from different sources to meet the requirement?
Absolutely, you can combine income from various sources – such as pensions, rental income, investment dividends, and savings – to meet the financial threshold. All income sources must be well-documented and presented clearly in your application.
How does the exchange rate impact my income requirements?
Exchange rate fluctuations can affect your income if it is in a currency other than euros. It’s advisable to maintain a buffer above the minimum required amount to ensure that currency changes don’t cause you to fall below the required threshold.
Can I work remotely while on a Non-Lucrative Visa?
The Non-Lucrative Visa explicitly prohibits any form of work within Spain, including remote work.
While some people do engage in remote work for foreign employers, this is a legal gray area and could potentially jeopardize your visa status. It’s advisable to consult with a legal expert to fully understand the implications.
What happens if my income dips below the required threshold after I’ve obtained residency?
If your income falls below the required threshold, it could jeopardize your ability to renew your residency permit. Spanish authorities assess your financial situation during the renewal process, so it’s best to maintain or exceed the income requirement to avoid complications.
Can my spouse and children be included in my residency application?
Yes, your spouse and dependent children can be included in your residency application. You’ll need to demonstrate additional income for each family member – typically around $650 per month per person – to ensure you can support them without working in Spain.
What are the tax implications of being a resident in Spain?
As a tax resident in Spain, which is determined by spending more than 183 days in the country per year, you’ll be required to pay taxes on your worldwide income.
Spain has a progressive tax system, and you may also need to report foreign assets. It’s important to understand these obligations and seek professional tax advice to manage your liabilities effectively.
Do I need to renew my residency permit, and how often?
Yes, most residency permits, including the Non-Lucrative Visa, require renewal. Typically, the first permit is valid for one year, with subsequent renewals lasting for two years each. After five years of continuous residency, you may be eligible to apply for permanent residency.
Can I eventually apply for permanent residency or citizenship in Spain?
Yes, after five years of legal residency in Spain, you can apply for permanent residency, which allows you to stay in Spain indefinitely. After ten years of residency, you may be eligible to apply for Spanish citizenship, provided you meet all legal requirements, including demonstrating integration into Spanish society.
Next Stop, Spain?
Whether you’re applying for a Non-Lucrative Visa or considering the Golden Visa through significant financial investment, thorough preparation, meticulous documentation, and careful financial planning are key to a successful application.
By following these guidelines and seeking professional advice when necessary, you can confidently navigate the residency process and enjoy your new life in Spain.
If you’re ready to take the next step, reach out to us for personalized assistance in making your move to Spain a reality.
