Moving to Spain. Where do you even start? Phew, there is so much coming at you. For a lot of people it starts with a dream. Or with buying a holiday home that turns out to be so lovely they never really want to go back to Dutch life. You are sick of the rat race. You want peace, freedom, decent weather. You want to relax and enjoy yourself. Whatever the trigger, more and more people are deciding to make the dream real and move to Spain. To a life with more sun, more space and less stress. The Costa Blanca North in particular, with places like Dénia, Jávea, Moraira and the Jalón valley, is hugely popular with Dutch people who want to live in Spain. We get it, because the climate here really is good. It is one of the healthiest climates in the world.
Contents
- Resident or non-resident?
- The documents you need
- Tax in Spain: what you really need to know
- Health insurance and banking
- Cars and driving licences
- What to really watch out for with houses
- Schools and children: what to know when you move to Spain
- Moving to Spain: what to do, step by step
It is a lovely dream. But you don’t just do it on a whim. All right, we do sometimes move a bit fast. But we are flexible and we have no children. There is far more to it than buying a house and calling in the removal van. We see it as our mission to inform people properly, so that you don’t only fall in love with the view but also know everything that has to be arranged to genuinely build a new life. In this long read we take you through it step by step, so that later on you enjoy not just the sun but also peace of mind. That way your head doesn’t start spinning, you simply know what to do. Because moving to Spain shouldn’t turn into an ‘Ik vertrek’ story. It should be a success.
But our advice is this. Start with a spell of trial living before you burn all your bridges. Living, working and making a life here really is different from being on holiday.
Resident or non-resident?
The first big choice is whether or not you officially become a resident of Spain. If you do, you live in Spain for at least 183 days a year and you become liable for tax here. That has consequences for your tax return, your health insurance, your driving licence and your pension, to name a few. If you stay non-resident, you officially still live in the Netherlands and you use your Spanish house as a holiday home. That sounds easy, but as soon as you actually spend more than half the year in Spain you are automatically regarded as a resident, even if you never formally registered. So it is up to you to prove that you spend more time in another country. That is why it is important to make clear choices about this right from the start.
The documents you need
Moving abroad means going through a series of administrative steps in Spain. The first and most important is applying for an NIE number. You need this even before you buy a house. It is essentially a sort of BSN, but for foreigners. Without this tax identification number you can arrange almost nothing: no bank account, no house purchase, no car registration. After that you register with the town hall, the so-called empadronamiento. This is comparable to registering in the Basisregistratie Personen in the Netherlands and it is necessary for things like applying for healthcare or childcare.
If you decide to become a resident, you also have to apply for your residencia and you get a padron . That is the official confirmation that you are living in Spain permanently. On top of that you will have to register with the Seguridad Social, the Spanish social security system, to get access to public healthcare.
Tax in Spain: what you really need to know
Plenty of people assume Spain is cheaper than the Netherlands, and while that is often true for day-to-day living, tax is a different story. In the Netherlands we tend to think of Spain as a tax haven. But in Spain you already hit the top rate of income tax above an income of roughly € 60.000, whereas in the Netherlands that threshold sits well above € 73.000. On top of that you have to deal with wealth tax if your savings, investments and possessions go beyond the allowance, which is around €700.000 per person. It mounts up fast. Because you only get a € 300.000,- allowance for your main home. So they add absolutely everything together.
Scenario 1: you sell your Dutch house before you are a resident in Spain
Do you sell your home before you officially register as a resident in Spain? Then everything stays the way you are used to:
- The sale falls under Dutch rules.
- In the Netherlands you pay no tax on the profit from selling your own home.
- Spain does not look at it at that point. You do not fall under the Spanish tax rules yet.
Example: You still live in the Netherlands. You sell your house in Utrecht with €150.000 of equity. After that you move to Spain and become a resident. In this case you pay no tax at all on that €150.000, neither in the Netherlands nor in Spain.
Scenario 2: you become a resident in Spain first and sell your Dutch house afterwards
Do you sell your house after you have officially registered as a resident in Spain? Then the situation changes:
- Spain taxes your worldwide assets.
- You have to declare your total assets, including the proceeds from the sale of your Dutch home.
- You may have to pay wealth tax (Impuesto sobre el Patrimonio) in Spain if you go beyond the allowances.
The allowance in the Comunidad Valenciana comes to roughly €700.000 per person for wealth tax. And don’t forget that they add all your assets together: houses, cars, boats, jewellery, art, investments. Everything above that is taxed at a rising rate.
Example: You become a resident in Spain in April. In August you sell your house in the Netherlands and receive €200.000 in equity. From that moment on you have to add that €200.000 to your assets in Spain. If your total (savings, investments, the value of your new home in Spain) comes to more than €700.000 per person, you pay wealth tax on the excess.
Note: you do not pay income tax on the sale profit itself. This is purely about wealth tax if you go over the threshold.
What if you sell a Box 3 property?
Do you have a second property in the Netherlands (a holiday home or a rented-out house, for example)? Then the story changes. If you sell that property after becoming a resident in Spain, the sale profit is taxed as a capital gain in Spain.
The rates are then:
- 19% on the first €6.000 of profit
- 21% on €6.001 to €50.000 of profit
- 23% on €50.001 to €200.000 of profit
- Above €200.000 even 27%-28% tax
So this does not apply to your former main home, only to properties you already held as an investment.
Paying wealth tax in Spain: how does that work?
How are your assets calculated? Everything you own worldwide counts:
- Savings and bank accounts
- Property (both in Spain and in the Netherlands and worldwide)
- Investments (shares, crypto, funds)
- Cars and boats (via official Spanish valuation tables)
- Art, antiques and jewellery (market value)
- Receivables (outstanding loans, for instance)
Debts directly tied to these assets, such as mortgages, may be deducted.
Examples:
| Asset | Valuation |
|---|---|
| Savings | Balance on 31 December |
| Spanish property | The highest of the purchase price, the cadastral value or the tax value |
| Dutch property | WOZ value |
| Cars | Value from the Spanish tax tables |
| Boats | Value from the tables or the insured value |
| Art, antiques, jewellery | Market value, backed up by a valuation if needed |
Important: the value is fixed on 1 January of each year.
Losing your Dutch allowances when you move to Spain
Something else that is important to know is that allowances such as child benefit, housing benefit or healthcare benefit do not exist in Spain. There are tax advantages for families with three or more children and for single parents. Older people and people with a certain degree of disability can sometimes count on extra deductions too.
Mortgage interest relief as we know it in the Netherlands is only available to a limited extent. Only if it concerns a mortgage on your main home and you meet specific conditions can you claim a tax deduction in Spain.
Health insurance and banking
As a resident you are entitled to public healthcare through the Seguridad Social, provided you work or receive a pension. If you don’t work, you will have to take out private health insurance. In Spain it is very common to have additional cover through providers such as Sanitas, DKV or Adeslas.
You will also need a Spanish bank account to pay your fixed costs, such as energy, water, internet and taxes. Bear in mind that some banks ask for a residencia number and proof of registration with the town hall. For us, paying those insurance policies is genuinely awkward and a bit of a world away. We have a gestor take care of it. Not too expensive, and that way you always know for certain that things actually get paid.
Cars and driving licences
If you stay in Spain for longer than six months, you are obliged to put your car on Spanish plates. That means having an ITV inspection done (the Spanish MOT) and applying for a new registration through the DGT, the traffic authority. Take import duties into account, unless you qualify under the removal scheme. And whatever you do, don’t forget: this is Spain too. It all takes a long time. So make sure you start early. There are long waiting times for those inspections alone, and then again for the import afterwards.
Would you rather buy a car in Spain? Then you need your NIE number and your registration (Padron). Your Dutch driving licence stays valid for the time being, but some town halls do still require you to exchange it for a Spanish licence after two years. You can buy a car without being registered as well. We still live in the Netherlands too. We are not registered here. It causes no end of confusion for the car dealer. But you have to explain clearly that you are buying the car for your holiday home.
What to really watch out for with houses
Spanish houses were not built with winter in mind. There is often no central heating, no cavity wall and the insulation is minimal. In summer that is wonderfully cool, but in winter it usually means sitting indoors shivering while the sun shines outside. We are dealing with a different build quality from the one we are used to in the Netherlands.
Houses close to the sea also have to cope with high humidity. That means rust problems, paint flaking off and damp walls, certainly on the shady side of the Montgó, for example. Always have a structural survey carried out before you sign a reservation contract. And don’t forget that not everywhere is connected to the sewer: in many cases a septic tank is still in use.
But it is also a cowboy world. Estate agents here are often driven by money. They want to sell. They say: ‘Oh no, that’s just how it is in Spain, nobody checks that anyway’. We often hear: no, the lawyer checks everything here. But there are plenty of risks and pitfalls when buying a house in Spain. You really do have to check whether a house is legal.
We think it matters that you really get a taste of the area. Where do you want to live? What suits you? Think it through properly. What makes you happy? You need to get your finances sorted out. After that we help you find the perfect house. Beforehand you also get a short valuation report with comparables. That way you know for certain that you are buying a good house and getting a good deal. And don’t forget, don’t go looking at all sorts of houses and phoning round yourself. Then a buying agent can no longer help you.. Strange way of working. But that is Spain.
Schools and children: what to know when you move to Spain
If you are moving with children, it is important to look into which school suits you all at an early stage. How does it work for Dutch children going to school in Spain? In Spain you have a choice between state schools, concertado schools (partly subsidised private schools) and fully private international schools.
At state schools Valencian is often taught alongside Spanish, and in the Costa Blanca North region especially, Valencian is a fixed part of the curriculum. Children generally adapt quickly, but preparation is important to make the transition go smoothly.
Did you know, by the way, that with a large family (familia numerosa) you get a great many tax advantages in Spain? You have no right to all sorts of allowances, but you do get plenty of deductions.
Moving to Spain: what to do, step by step
- Get to know the region and the towns properly.
- Apply for an NIE number.
- Register with the town hall.
- Apply for residencia if you are becoming a resident.
- Open a Spanish bank account.
- Arrange your registration with the Seguridad Social.
- Arrange private health insurance if you need it.
- Check all the legal documents when you buy a property.
- Plan the move of your belongings carefully.
- Get proper guidance on your tax affairs, so that you are not caught out by surprises.
A well-prepared move doesn’t just mean enjoying Spanish life more, it also means living, working and getting on with life without a worry. Moving to Spain is more than just relocating. It is a fresh start. And it has to feel right.
Would you like to know how we can help you with those first steps? Do get in touch. We are happy to think it through with you.
