Retiring in Spain
Spain: the tax picture for FIRE
Spain taxes general income on a progressive scale, from 19% to a top rate of 47% above €300,000, after a personal minimum of €5,550. Ember models that minimum as a tax-free allowance; in reality it is a tax-reducing credit, so results are slightly approximate. Investment gains are modelled at a progressive 19–28% with no annual exemption, approximating Spain's savings-income schedule, which itself runs to 30%. At death Spain applies a recipient-side inheritance tax by relationship group, with no unlimited spouse exemption at state level; the 17 autonomous communities add reliefs of up to 99%, so resident spouses and children often pay far less than the state scale suggests.
Under the UK–Spain treaty, UK private, occupational and State Pensions are taxed only in Spain for residents; government-service pensions stay UK-taxed. Cost of living is modelled at a relative factor of 0.72, a low-confidence, illustrative figure. Coverage limits: regional income-tax variation (Madrid lower, Catalonia and Valencia higher) and the Beckham regime are not modelled, rates are confirmed 2025 figures pending 2026 updates, and the capital-gains and inheritance estimates carry low confidence.
Income tax (2026)medium confidence
| Band | Rate |
|---|---|
| €0 – €12,450 | 19% |
| €12,450 – €20,200 | 24% |
| €20,200 – €35,200 | 30% |
| €35,200 – €60,000 | 37% |
| €60,000 – €300,000 | 45% |
| above €300,000 | 47% |
What this model doesn’t capture (11)
- mínimo personal (€5,550) modelled as a tax credit at 19% (scale(base)−scale(5,550) mechanic) — matches Spain's method; regional mínimo variation still not modelled
- autonomous-community scale variation not modelled (single combined default scale; Madrid lower, Catalonia/Valencia higher)
- savings-income schedule (renta del ahorro 19–30%) not modelled — dividends/interest/gains fall on the general scale here instead of the separate schedule
- Beckham regime (flat 24% to €600k for qualifying new arrivals) not modelled
- IRNR non-resident rental modelled as flat 24% gross / 19% EU-EEA net (nonResidentRental module) — renta imputada on non-let periods (Art. 24.5), the Art. 46 IRPF-option election, and the pending TS appeal on non-EU expense deductibility are not; the EU-net base reuses the vacancy+maintenance haircut as a coarse expense proxy
- 2026 reconciliation DONE (2026-07-19, AEAT/BOE primary sources): general state scale (9.5/12/15/18.5/22.5/24.5 halves), mínimo personal €5,550, IRNR 24%/19% and the Patrimonio+ITSGF stack all VERIFIED-unchanged under the PGE-2025 prórroga; the savings scale was corrected to 27% (€200k–300k) / 30% (>€300k) per Ley 7/2024. RD-ley 5/2026 (17 Feb, BOE 19-2-2026, art. 28) adds a low-income work deduction (€590.89 up to €17,094, tapering to nil at €20,048.45) — not modelled, like the €2,000 otros gastos it sits beside
- tributación conjunta (joint filing) not modelled — a joint declaration reduces the base by €3,400 (two-parent) / €2,150 (single-parent) per year (Arts. 82–84 LIRPF, unchanged 2026); jointFiling is only modelled for DE/FR/US
- autónomo cuota approximated as a band, not the real income-based monthly quota (draft/low)
- small-company 23% corp rate not modelled (flat 25%)
- savings-scale dividend tax approximated
- wealth tax: regional variation not modelled — the state Art. 30 scale is wired; Madrid/Andalucía 100% bonificación (≈zero IP below ~€3M net wealth), Cataluña/Valenciana/Balears exemption variants, the €300,000 habitual-residence exemption and the pension-rights exemption are all unrepresented (overstates the €700k–€3M window for bonificación regions; the ISGF floor above €3M applies nationally either way)
Capital gainsmedium confidence
Capital gains are taxed at 19%–30%.
19–30% progressive savings base (base del ahorro): 19% to €6k / 21% to €50k / 23% to €200k / 27% to €300k / 30% over €300k. Nationwide (regions cannot alter). Top rate rose 28%→30% for FY2025.
Inheritance & estate taxlow confidence — approximate
Tax is charged on each recipient, scaled by their relationship to the deceased.
Recipient-side ISD by relationship group (I–IV). NO unlimited spouse exemption at state level — the spouse (Group II) gets only the €15,956.87 reduction, so spouseExempt=false. CRITICAL unmodelled feature: after the scale the cuota is multiplied by an Art. 22 pre-existing-wealth/relationship coefficient (Groups I–II 1.0–1.2; Group III 1.5882–1.9059; Group IV 2.0–2.4), so sibling/unrelated liability is up to ~2.4× the band figures — not representable here. Spain is intensely regional: the 17 autonomous communities apply bonificaciones up to 99% for Groups I–II, so resident close relatives often pay near zero. This pack encodes ONLY the state default scale + reductions.
When should you claim your Spain state pension?medium confidence
Spain state pension (Seguridad Social)
Normal pension age 67. Deferring adds about 4% for each year you wait (no cap). You can't claim before the normal age.
Modelled defer-only: the demora (deferral) bonus is ≈+4% per full year. Early-retirement reduction coefficients depend on contribution history and are simplified out — confidence low.
The best age to claim isn’t just about these factors — it depends on your life expectancy, your other income, and which country you’re tax-resident in when the money lands. Deferring into a lower-tax country can flip the answer entirely. Optimise your claim age →
Cost of living
72%
of a UK baseline (100%) — a rough, illustrative comparison, not a forecast.
UK private pension
Under the UK treaty, a UK-sourced private pension paid to a resident here is generally taxed only where you live (not by the UK).
Common questions
How are capital gains taxed in Spain?
Ember models capital gains under Spain's savings-income schedule at a progressive 19% rising to 28%, with no annual exemption. This estimate carries low confidence, and in the income-tax model dividends and interest currently fall on the general scale rather than the separate savings schedule — an approximation that matters most when investment income is a large part of a plan.
Will my UK pension be taxed in Spain?
Under the UK–Spain treaty, a UK private or occupational pension — and the UK State Pension — is taxed only in Spain once you are resident there. The exception is UK government-service or military pensions, which by default remain taxed in the UK.
Is there inheritance tax in Spain?
Yes — Spain taxes the recipient, not the estate, by relationship group, and there is no unlimited spouse exemption at state level: a spouse gets only a reduction of about €15,957. In practice the 17 autonomous communities apply reliefs of up to 99% for spouses and children, so resident close relatives often pay near zero. Ember encodes only the state default scale and reductions, and a pre-existing-wealth multiplier that can raise sibling or unrelated-heir bills up to roughly 2.4× the scale figure is not modelled, so the estimate carries low confidence.
What does Spain do to your FIRE date?
The free calculator compares your number across every covered country; the full planner models your actual accounts, pensions, residency moves and these exact tax rules — with the maths behind every figure shown.