Want to move to sunny Spain for a better life and lower taxes? Then read this post to find out our pick of the best cities in Spain for expats.
November 22, 2024
By: Bobby Casey, Managing Director GWP
Spain is a country that gets around 3,000 hours of sunshine every year, which is enough for most people to pick up everything and move immediately. In addition, the people are friendly, the food’s good, and the culture’s amazing.
But moving isn’t just about the quality of life; you have to factor in boring things like taxes too. Thankfully, Spain’s a decent country for expats in terms of taxes, so all you have to do is pick the right place to live.
In this article, we’ll show you the best cities in Spain for expats. This information will help you choose a destination that you’ll thrive in.
6 Best Cities in Spain for Expats
Madrid
One of the top choices for Spanish cities to move to is Madrid, the capital. As you’d expect from most capital cities, there’s a high quality of life, and you’ll find high concentrations of expats here too. This gives Madrid a more international feel, so you won’t feel as homesick if you move to this city.
More importantly, Madrid has a 100% Wealth Tax exemption. To explain, let’s first explore this tax in Spain.
The Wealth Tax is applied to any resident who has assets worth over €700,000 (€1.4 million if you have a spouse); there’s an exemption of €300,000 for your primary home. The tax rate falls between 0.2% to 2.5% (starting at around €10 million for the highest rate).
Each Spanish region gets to decide whether their residents pay the Wealth Tax and whether it applies to worldwide assets as well. For example, in Madrid, you’re exempt, but if you have assets totaling over €2 million, you must still file the form.
In terms of the city itself, there are diverse neighborhoods and international schools if you’re bringing the entire family along. Plus, there’s a vibrant cultural scene with world-famous museums and theaters, and there’s a lively nightlife. With its top-rated healthcare facilities and strong public transport system, Madrid should be a top contender on your list.
Beckham’s Law
The Beckham Law is named for the soccer player David Beckham and is something expats can take advantage of, no matter where they move to in Spain. Under this law, you can only be taxed at a rate of 24% for six years (with a maximum income of €600,000); in comparison, normal income taxes range from 19% to 47%.
To qualify, you must not have been a tax resident in the previous five years before you moved to Spain, and you must move for work. Do note that you must have a job offer before you move as well. There are many other requirements, which you can find easily on the internet.
Barcelona
Barcelona is another large Spanish city that expats love. It may not be the safest city in Spain, but if you’re looking for a rich cultural life, you’ve got it here. It’s one of the best places to live in Spain as an American.
In Barcelona, you’ll get to enjoy a Mediterranean climate with beautiful beaches. There’s gorgeous architecture, and you can keep busy with festivals and delicious food in the hot culinary scene. Not only is Barcelona great for those who want an active lifestyle, but there are plenty of English-speaking services due to its international community.
Like with Madrid, you can take advantage of the Beckham Law. However, you won’t be exempt from the Wealth Tax; the tax-free allowance is lower in Catalonia than in other regions. Expect to pay between 0.21% and 2.75%.
Valencia
Are you searching for a city in Spain that has a lower cost of living? Then you’ll want to try Valencia. It’s very affordable compared to Madrid and Barcelona.
Your quality of life won’t have to suffer either. Revel in the laid-back lifestyle of the city and stroll through the pretty beaches and parks. There are walkable neighborhoods, good infrastructure, competitively-priced public services, and many expats, so it’s ideal for families and older people.
In general, taxes tend to be lower, especially property tax. This makes Valencia attractive to retirees and expats on a budget.
Also, Valencia has a moderate Wealth Tax; however, overall income tax rates tend to be lower. In addition, if you’re a retiree from countries with favorable tax treaties (like the US or the UK), you may also benefit from reduced double taxation, depending on the specifics of your income.
Do note that on October 29, 2024, Valencia had its worst flood in decades and it destroyed much of the infrastructure. If you want to move soon, then this city may not be the best choice, as it’ll take at least a few months for Valencia to rebuild itself.
Malaga (Costa del Sol)
Malaga is a popular destination for retirees, as is the surrounding Costa del Sol region. There’s year-round sunny weather and a wide variety of leisure activities, such as golf and cultural festivals. This just may be the best place to live in Spain for English speakers since there’s a huge expat community of them here.
The lifestyle in Malaga is relaxed yet vibrant, so it’s got the right mix of serenity and excitement. And there are affordable housing options, which means you can stretch your dollar further.
You’ll have to pay a Wealth Tax in Andalusia (the region), but the rates are lower than in other regions. Property tax is also reasonable, so if you want to buy a house, Malaga’s an excellent place to do so.
Bilbao (Basque Country)
Bilbao is an interesting city to be in, as it’s part of the Basque Country (in fact, it’s the capital). It has a unique fiscal regime, which means it has partial control over its taxes. Here, personal income taxes can be lower than in other parts of Spain, which is great for business-oriented expats and entrepreneurs.
People enjoy living in Bilbao since it’s undergone major modernization. This city has excellent public services, a top-rated healthcare system, and cool cultural landmarks like the Guggenheim Museum. This urban location has a quieter yet scenic lifestyle and offers a high standard of living.
Alicante
Alicante is a Spanish city with a lower cost of living and a fantastic tax structure, which has caused retirees and remote workers to flock here. Your daily expenses are generally lower than in bigger cities, and if you want to own property, the tax rates are affordable too.
Plus, if you’re from the UK, you’ll feel right at home here. Alicante has one of the largest British expat communities in the nation, so not only will you run into fellow countrymen, but you’ll also find no shortage of English-speaking services.
What people love about Alicante is its mild climate, sandy beaches, and easygoing vibe. It offers a peaceful yet active lifestyle. And if you ever want to explore, Alicante’s well-connected by trains to larger cities.
Check Out These Best Cities in Spain for Expats
The above are the best cities in Spain for expats, ranging from the capital city of Madrid and busy Barcelona to urban Bilbao. Each offers unique benefits, whether it’s tax considerations to lifestyle perks.
It’s worth visiting the cities you’re interested in to get a feel for things before you start this new chapter in life. And in addition, consult local tax advisors for more tailored insights if possible.
Contact us today if you’d like to move to Spain and would like to protect your assets in the process. Global Wealth Protection is here to help you minimize your tax obligations.
