The number 7 is an iconic number which is used in many contexts either signifying good or bad – Lucky 7, Dante’s 7 sins, 7 days a week, on the seventh day God rested, “Seven brides for Seven brothers”, Snow White and the seven dwarfs and so on. Here’s another: the seven biggest mistakes that expats make when moving to Spain!
There are many great reasons to move to Spain – the weather being the obvious one. Food, standard of living, the cost of living and the freedom to be outdoors most of the time all add to a rather great mix of the why live there? BUT, before arriving, it’s imperative to understand the do’s and don’ts, the differences and similarities, as well as the absence of certain things and the appearance of others.
To help people transition into their new lives in Spain, at PCC Property, we thought we would reveal the 7 biggest mistakes when moving to Spain people can make which cause grief, frustration and possibly money.
It is entirely natural for people to use the social structure and procedures of their home country as a frame of reference – that is the largest obstacle to overcome as it’s a bit like trying to drive from Marbella to Madrid using a map of the UK!
This is my number one choice from all of the feedback we get.
Attaining NIEs, TIEs, empadron certificate, registering in the healthcare system, and changing your driving licence to a Spanish one, is a sea of bureaucracy and can be super frustrating.
Ensure that this bit is at the top of your priority list in the first two or three weeks of your move.
Each document requires a previous document to show you are following the process. Every application requires a photocopy of almost everything as well as proof of the original. One photocopy of something that you are missing catapults you to the back of the, often long, queue to start all over again. The order in which to tackle issues are:
So please swap the beach and al fresco lunches for the queues after having visited the photocopier shop.
The video clip below offers a humorous insight to the procedures.
Good luck!
It has to be emphasised that the cost of living is lower than the UK, USA and most other European countries.
This also means that salaries are consequently lower as a result.
By far the biggest shock for people though is that the frame of reference for taxation remains back in their home country. Assumptions that ISA’s are tax free (not in Spain), or that your 25% tax free cash from your pension fund is still “tax free”, it’s not!
Whilst things like Premium Bond winnings are tax exempt in the UK they aren’t in Spain. This is also followed by the assumption that a state pension is assessed for tax in the home country and so no further tax – Not true! It’s reassessed all over again in Spain and if there is a tax deficit then that must be paid.
Theres also the assumption that foreign earnings are not subject to tax in Spain – they are!
Speak to an IFA who can restructure assets quickly to ensure you can be as tax efficient as possible in Spain – and do it as quickly as possible. Private Client Consultancy’s wealth management branch can help with this.
In summary and especially for British expats:
Many British expats assume that their UK financial arrangements will remain the same in Spain. Unfortunately, that’s not the case:
Expats who don’t plan for these changes can face unexpected tax bills. Consult a financial advisor who specialises in expat taxation to ensure your finances are structured tax-efficiently before your move.
It is entirely understandable that if someone moves to Spain from a non Euro (currency) country that the vast majority of their assets and income will be in a different currency. If left like that then this gives rise to exchange rate risk.
A case study can emphasize this.
Back in 2007 the exchange rate of GBP to the Euro had been relatively stable bobbing between 1.40 to 1.50 and expats moving to Spain often had their pensions in Sterling, their savings in sterling, their investments in sterling and would transfer sums of money to live off.
At the end of 2007 GBP got the wobbles and by the end of 2008 the exchange rate fell to1.04 (yes a 30% decrease) meaning that those individuals who had their assets and income sin sterling took a 30% hit in the money available to spend – added into the pain was that a lot of people had their cash in the bank earning interest at 6% and this rate fell to less than 1% in the same period.
As an example someone with £200,000 on deposit would expect interest of £11,000 per annum which at, say 1.45, was producing €15,950 per annum. In the course of 12 months the £200,000 was now producing £2,000 interest and converted at 1.04 gave €2,080 per annum to spend.
Figure 1 shows the GBP/Euro volatility since 2003 to now
fig 2 shows interest rate rises and falls.
In summary to protect yourself from this avoidable mistake, consider:
There is often a temptation to either buy “off-plan” or buy a resale based on entirely different factors.
Both have different advantages and disadvantages.
Off plan sales look great with AI generated photos and artist impressions whereas the reality is that an Urbanisation can take years to mature before it even resembles the initial photographs. A resale can be visited and imagined what it will look like and the initial wow factor sometimes overrides the issues such as lack of parking (remember lots of the roads were built for donkeys).
The ideal way to be absolutely sure that it is the right purchase is to rent first – if not possible please try and find out as much information as possible about the area, the community, the council taxes, the vicinity to schools, public transport, cost of cars (you’ll need one), the upsides as well as any drawbacks.
Choose a reputable estate agent – not just one who has the prettiest pictures on their website.
Ensure that all of the questions are asked about pros and cons of the area, development, and facilities around.
We know a good one 😉 www.pccproperty.com !
Remember that the stamp duty costs on a resale property vary between 7-10% of the purchase price depending on the autonomous community, and you should allow approx 13% of the purchase price (including the stamp duty) to cover the additional buying costs.
For a new build there is also a 10% VAT (IVA) and a further tax of 1.2% for“Actos Juridicos y Documentados” .
Real estate agent fees are paid by the seller not the buyer.
If you are purchasing in a region or area that relies on tourism then please understand that Summers are busier than a very busy thing.
It impacts on parking, supermarket queues, access to the beaches, traffic and traffic jams, space in bars and restaurants, even local prices which are often raised in tourist season.
It’s a fact of life in Spain – as long as you are aware and don’t become a residential tourist then life is cozy. We advise to shop early, book ahead, and embrace the seasonal buzz.
Spain’s healthcare system is entirely different, which whilst it is perfectly adequate and in many ways, better than other EU countries.
Navigating the bureaucratic system can be alien to newcomers to gain entry to the free services.
We highly recommend that people check this out and understand their rights.
However we also strongly recommend private health cover at the outset (especially if you are unemployed or receiving state benefits) where you may not be eligible for free healthcare.
Having comprehensive health coverage is crucial—it provides peace of mind and ensures you’re covered in any medical situation.
Not understanding the cultural differences – I want to share a few funnies of “complaints” left by British on holiday in Spain first and foremost:
“They should not allow topless sunbathing on the beach. It was very distracting for my husband who just wanted to relax.”
“We went on holiday to Spain and had a problem with the taxi drivers as they were all Spanish.”
“The beach was too sandy. We had to clean everything when we returned to our room.”
“When we were in Spain, there were too many Spanish people there. The receptionist spoke Spanish, the food was Spanish. No one told us that there would be so many foreigners.”
“It’s lazy of the local shopkeepers in Puerto Vallarta to close in the afternoons. I often needed to buy things during ‘siesta’ time — this should be banned.”
“No-one told us there would be fish in the water. The children were scared.”
“I think it should be explained that the local convenience store does not sell proper biscuits like custard creams or ginger nuts.”
“It took us three hours to fly home from Spain to Scotland. It took the French only one and a half hours to get home. This seems unfair.”
Scarily enough, those quotes are actually real comments, left by real people.
Those cultural, language and culinary differences are still there all year round for residents and we always need to remember that Spain is Spanish.
We really ought to attempt to learn Spanish and attempt to speak it, the praise and extra helpfulness is amazing.
The temptation to purely mix with other people of the same nationality is often strong, but understanding that the Spanish have their own traditions, culture, history, and rituals is important to fit in and to enrich your experience as an expat.
Spain offers an incredible lifestyle, but being prepared is key to a successful move. By avoiding these common mistakes—especially around bureaucracy, finances, and cultural differences—you’ll enjoy a much smoother transition.
If you’re considering buying a property in Spain, we’re here to help. Browse our listings at PCC Property and let us guide you to your dream home in Spain!
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