Retiring in Spain vs Portugal

If you want to retire to a place where you can enjoy a relaxed lifestyle, a rich culture and a community full of friendly and helpful people, you should consider southern Europe, with Spain or Portugal among the top choices.

In this post we will explain why these two countries are the most recommended for retirees and why you should choose Spain or Portugal.

Spain has 7.4 million foreign residents and 10.3 million people born abroad, about one in five of its 49.8 million inhabitants (Source: INE, July 2026). Portugal had 1.59 million foreign residents at the end of 2025 (Source: AIMA, September 2026).

We would like to explain the reasons why our retired clients choose to live in Spain rather than Portugal, especially in Spain they choose to retire in Malaga where the cost of living and retirement can make more sense for those who prefer a more relaxed lifestyle.

However you can contact us if you have any questions and we will advise you on the whole process of obtaining a Spanish visa.

Who is Eligible?

Check to see if you qualify for a visa to retire in Spain if you’re thinking of moving there in your golden years. Are you from one of the European Union countries? Do you already live in Spain? A visa would be issued to you if the following situations apply to you:

EU Citizens

Spain has been in the European Union since 1986, which makes it easy for EU citizens to retire in Spain. You don’t need a visa or residency permit to work or retire in Spain if you are a European Union citizen. If you stay longer than three months you register as a resident (certificado de registro), and as a retiree you show health insurance and enough income to live on.

Non-EU Citizens

A long stay visa or a residence visa must be obtained by non-EU citizens, depending on their nationality, in order to enter the country. For retirees, that visa is almost always Spain’s main retirement visa, the Non-Lucrative. The first non-lucrative residence permit lasts one year. If you plan to stay in Spain for a long period of time, you can apply for a long-stay visa or spain retirement visa, which is then renewed for two years at a time. To renew it, you must have lived in Spain for more than 183 days in the calendar year. A long-term residency visa is the most common option for expats who want to retire in Spain. This long-term visa does not allow you to work in Spain, and you need passive income of at least €2,400 a month (€28,800 a year) in 2026.

Obtaining a Visa Spain or Portugal

In order to apply for a visa to Spain, you must first meet the specific requirements for the type of visa you wish to obtain. For Spain’s retirement visa you must prove you can support yourself without working: at least €2,400 a month (€28,800 a year) in 2026, plus €600 a month for each family member. Each country has its own criteria, so tell us your situation and our team will tell you which visa fits.

Non-Lucrative Visa Requirements for Retiring in Spain

A complete list of documents and requirements for entry into Spain can be obtained from your local consulate. Your passport must be valid for at least one more year, and you need bank statements proving your income, a criminal record certificate covering the last five years, private health insurance from an insurer authorised in Spain with no co-payments, and a medical certificate.

The ‘Golden Visa’, closed since 2025

Spain closed this route on 3 April 2025. Buying property worth 500,000 euros, or investing a million in a company, no longer gets you a residence permit, and no equivalent programme has replaced it.

Permits granted before that date are still valid and can still be renewed under the old rules, which is the only reason the golden visa still comes up at all. If somebody is offering you one today, they are selling something Spain no longer issues.

If you were counting on this route, the two that work for most retirees are the non-lucrative visa, which asks for passive income rather than an investment, and the digital nomad visa if you still work remotely. Tell us your situation and we will tell you which one fits.

Taxes – What to expect

Retiring to Spain will mean paying taxes, whether you become a citizen or not. Anyone weighing Spain or Portugal for retirement used to look first at Portugal’s non-habitual resident (NHR) regime, but it closed to newcomers on 1 January 2024, and Spain has never had a tax regime for pensioners. Those who are looking at retiring in Spain vs Portugal often take the two different tax situations into account before deciding where to live.

Its replacement, IFICI (2024), taxes qualifying professional income at 20% for ten years, but it excludes pensions. A retiree moving to Portugal now pays the normal income tax scale, from 12.5% to 48% in 2026, on a foreign private pension.

Outside those regimes, foreign dividends, interest and capital gains are taxed in Portugal, with a credit for any tax already paid in the country they come from. In Portugal the flat rate on investment income is 28 percent.

Spain’s special regime, the Beckham Law, is not for retirees. It is for people who move to Spain for a job, remote work on the digital nomad visa, a director post or an approved start-up. It taxes employment income at 24% up to €600,000 and 47% above that, and most foreign investment income is left out.

To qualify, you must not have been tax resident in Spain in any of the previous five years. The regime lasts six tax years: the year you become resident and the next five.

A retiree who becomes a normal Spanish tax resident is taxed on worldwide income, including foreign dividends and capital gains; a tax treaty gives you a credit for tax paid abroad, not an exemption. Tax rates in Spain on savings income run from 19% to 30% in 2026, depending on the amount. Wealth tax only applies above an allowance of €700,000 per person in most regions (€500,000 in Catalonia and Extremadura, €2 million in Valencia, €3 million in the Balearics), plus €300,000 for your main home. Madrid, Andalusia, Cantabria, La Rioja and Extremadura give a 100% discount, but above about €3.7 million the national solidarity tax still applies. Taxes are a major reason behind why someone might decide to retire to Spain vs Portugal. With Portugal’s NHR closed, a retiree now pays normal income tax in either country, so whether Spain or Portugal is cheaper to retire in depends on your type of income and the region you choose.

Tax Criteria

You become a tax resident in Spain if you spend more than 183 days here in a calendar year, or if your main economic interests are here. Renewing the non-lucrative visa already requires more than 183 days a year in Spain, so almost every retiree on it is a tax resident. As a resident you pay Spanish income tax on your worldwide income. You can skip the annual return only if your income stays within these limits:

1) Salary or pension of up to €22,000 a year from a single Spanish payer (€15,876 if a second payer pays you more than €1,500 a year, or the pension is paid from abroad).
2) If you’re self-employed in Spain, you always have to file.
3) Up to €1,000 a year of deemed income from a second home you do not rent out.
4) Up to €1,600 a year of interest, dividends and gains with Spanish tax withheld.

If you claim a credit for tax paid in another country, you must file whatever your income. And foreign assets worth more than €50,000 in any category (accounts, investments or property) must be reported on Form 720.

Allowances and deductions for Spanish tax purposes

Every resident gets a tax-free allowance, and it grows with age and children (state amounts; some regions set higher ones for their share of the tax):
1) Under 65-year-olds are entitled to a €5,550 personal allowance.
2) Over 65, the allowance rises to €6,700.
3) Over 75, it rises to €8,100.
4) If you have children under 25 who live with you and earn less than €8,000 a year, you add a child allowance.
5) The child allowance is €2,400 for the first child, €2,700 for the second, €4,000 for the third and €4,500 for the fourth and each one after.
6) Add €2,800 for each child under three.

The Wealth and Inheritance Tax

If your net worth is above €700,000 (the general allowance; some regions set another), you may pay wealth tax on the excess at 0.2% to 3.5% on the state scale, and regions apply their own scales and discounts. Residents can add up to €300,000 for their main home on top of that allowance.

In Spain the heir pays inheritance tax, on a state scale of 7.65% to 34%, but the regions set their own discounts. For a spouse or children, Andalusia, Madrid, Valencia, Murcia and several other regions take 99% off the bill, and the Balearic Islands and Cantabria 100%. Catalonia and Asturias charge noticeably more. What your heirs pay depends on the region where you live. Portugal has no inheritance tax as such. Heirs pay 10% stamp duty on assets in Portugal, but spouses, de facto partners, children, grandchildren, parents and grandparents are exempt. The 0.8% stamp duty on Portuguese property applies to lifetime gifts, not to inheritances.

Advantages of retiring in Spain vs Portugal?

Compared to the rest of Europe, both Spain and Portugal have attractive benefits to retirees for luring them to the respective countries’ borders. Both Madrid and Barcelona are popular destinations for retirees looking for a southern European retirement destination. But what are the advantages and disadvantages of retiring in Spain vs Portugal?

Cost of Living, Spain vs Portugal

As previously stated, Spain is generally less expensive than other European countries. If you come from outside the EU, the visa sets the floor: the non-lucrative visa asks for at least €2,400 a month in 2026. Above that, rent is what makes the biggest difference.

If you’re looking to rent a home in Spain, you’ll find that prices can vary greatly depending on location. In Madrid, advertised rents averaged €23.30 per square metre in August 2026, so a 50 m² one-bedroom flat costs about €1,165 a month. In Málaga the average was €16.50 and in Valencia €16.30, about €825 and €815 for the same flat (Source: idealista, August 2026).

Rents drop fast once you leave the big cities. In inland capitals such as Cáceres, Jaén or Zamora the average was about €8.30 to €8.40 per square metre, about €415 to €420 a month for the same 50 m² flat (Source: idealista, August 2026).

Cost of Food, Spain vs Portugal

The cost of food and groceries in Spain is lower than in some other countries, making it an attractive option for tourists. On average, you should budget between €250 and €300 a month for food, depending on your personal needs. To top it all off, Spain’s wine is well-known throughout the world. For as little as five euros, you can get a decent bottle of wine or a pint of beer. If you like to eat out, Spain has some of the world’s best restaurants and cuisine. As a result, they are typically much less expensive than in other European countries. Those who are considering retiring in Spain vs Portugal often take food costs into consideration.

Cost of Utilities and transportation, Spain vs Portugal

Transportation and utility costs are two of the most significant expenses that most people face in their daily lives. In some parts of the world, the cost of these two things can be so high that they no longer make economic sense. However, in Spain, utility costs are generally lower than in other countries. It is common for utilities to include heating and water, as well as electricity; the cost of which can vary depending upon how much you use and the size of your home, along with the temperature and time of year in your area. Cable internet subscriptions can cost as much as €40 per month.

Cities like Barcelona, Valencia, and Madrid have excellent public transportation systems that are comparable in cost and quality to those elsewhere in the world. Metro systems link the city’s business districts to the surrounding neighborhoods and towns in every major metro area. There are also numerous local and inner-city buses running between these areas, so you should have no problem getting around.

You might not even need to own a car if you live in a city like Barcelona or Madrid. In these densely populated areas, finding a parking space can be a challenge. As an alternative, if you live in rural or suburban areas, you may benefit from owning a car. Since 1 January 2026 every car in Spain must carry a connected V-16 warning light, which replaces the old warning triangles, plus a reflective vest and a spare wheel or repair kit. Carry your licence and the car’s insurance papers too.

If you are stopped by the police without them, you can be fined.

Healthcare in Spain vs Portugal

The healthcare system in Spain is world-class. In most cases, it provides coverage to all of the people in the area. At some of the hospitals and health centers located there, you can access both private and public health care options.

If you are British and can obtain the S1, our lawyers will take care of registering your S1 in Spain.

There is a government agency in Spain called the Ministry of Health that oversees the system. The Ministry sets national policy, but each region runs its own health service and budget. Public healthcare in Spain is typically available to those who pay into the country’s social security system.

Public healthcare covers people who work and pay social security here, people receiving a Spanish pension or an S1 from another country, and their families. Visitors with an EHIC or GHIC get necessary care. Being over 65 is not enough on its own: a retiree on the non-lucrative visa keeps private insurance and, after a year of registered residence, can join the public system through the convenio especial.

For those who don’t meet the criteria for public healthcare in Spain, private health care is also common. Self-insurance is popular among expats because it allows them to access better medical care with fewer restrictions and shorter wait times.

Retiring in Spain or Portugal: Our Conclusion

Spain is one of the most developed countries in the world, with a standard of living higher than other countries. When compared to other European countries, the cost of living in Spain or Portugal is extremely low. A couple needs to show at least €3,000 a month for the non-lucrative visa in 2026 (€2,400 plus €600 for the partner). You can enjoy your golden years in peace thanks to the friendly locals and laid-back lifestyle. Consider retiring in Spain vs Portugal if you’re looking to retire somewhere warm and sunny.