Moving to Spain gives you more than just a better lifestyle — it offers a fresh perspective on what really matters.
For many expats, that means not only enjoying their wealth today, but ensuring it’s passed on efficiently to loved ones tomorrow.
Viewing posts categorised under: Spain
Can I Pass On My Investments Tax-Efficiently in Spain?
By Matthew Green
This article is published on: 18th October 2025
18.10.25
But here’s the catch: Spain’s inheritance and gift tax system works very differently from what most expats are used to in their home countries. And without the right planning, your family could end up facing an unnecessary and unexpected tax bill.
Understanding How Inheritance Works in Spain
In Spain, inheritance tax (Impuesto sobre Sucesiones y Donaciones) is paid by the beneficiary, not the estate.
That’s often the first surprise for newcomers — it’s your spouse, children, or other heirs who pay the tax, rather than your estate before distribution.
The amount payable depends on:
- The relationship between the deceased and the beneficiary (spouses and children generally receive the biggest allowances)
- The value of the inheritance
- The region of Spain you live in — because each autonomous community (like Valencia or Madrid) sets its own allowances and reductions
For example, Madrid currently offers one of the most generous regional allowances, with reductions of up to 99% for close family members. Valencia, on the other hand, provides smaller deductions — which can make a significant difference to your family’s eventual tax exposure.
Structuring Your Investments Can Make a Big Difference
The way you hold your assets determines how smoothly — and efficiently — they can be passed on. Investments in a Spanish tax-compliant bond can offer a number of key advantages when planning for succession:
- You retain full control of your investment during your lifetime
- You can name multiple beneficiaries, who inherit directly without the need for probate delays
- The bond’s structure allows for efficient transfer of value — avoiding the administrative complexity that often comes with overseas holdings
- Beneficiaries may receive significant tax advantages, depending on your region of residence
In short, compliant structures help your heirs inherit assets that are clean, locally compliant and immediately accessible, without triggering unnecessary tax consequences.
Avoiding Common Pitfalls
Many expats unintentionally make things more complicated by:
- Holding UK ISAs, investment accounts, or offshore funds that aren’t recognised under Spanish law
- Keeping property or assets in personal names rather than through efficient vehicles
- Failing to review beneficiary nominations after moving to Spain
These issues can create double taxation risks, delays or even cause assets to fall outside your heirs’ allowances. A simple review of your portfolio through the lens of Spanish succession law can often fix these risks before they become costly.
Peace of Mind for You and Your Family
Effective planning is about more than saving tax — it’s about clarity and peace of mind. Knowing that your wealth will transfer smoothly and efficiently to the people you care about is one of the greatest gifts you can leave behind.
Whether your goal is to ensure your spouse is financially secure, or to pass on assets to your children in the most tax-efficient way possible, a little forward planning today can make all the difference tomorrow.
Final Thought
If you’ve chosen to make Spain your long-term home, your financial plan should reflect that. Local advice can help you align your investments, pensions, and estate planning with Spanish law — so your wealth stays protected across generations.
If you’re an expat living in Valencia, Madrid, or elsewhere in Spain, and you’d like to understand how to structure your assets for efficient inheritance and succession, I can help.
We’ll review your existing arrangements and identify ways to reduce potential inheritance tax exposure, simplify the transfer of assets, and ensure your loved ones are properly protected.
Get in touch for a no-obligation consultation to discuss your personal situation and learn how to build a clear, tax-efficient legacy plan for your family.
Financial Clarity for Expats in Spain
By Matthew Green
This article is published on: 16th October 2025
16.10.25
The Expat’s Guide to Building Wealth in Spain
What Catches most Expats Off Guard
When you move to Spain, the dream is clear: sunshine, a slower pace, and more time to enjoy life. But for many expats, the reality of managing money here soon brings a new challenge — understanding how the Spanish tax system treats your investments.
In the UK or elsewhere, you might have built wealth using ISAs, premium bonds, or investment portfolios with little thought for cross-border implications. But once you become a tax resident in Spain, those same structures can start working against you rather than for you.
New Life, A New Set of Rules
One of the biggest surprises for newcomers to Spain is that Spain taxes your worldwide income and gains — not just what’s earned here. That includes dividends, interest, and even growth within investment funds.
It’s easy to assume that investments left “back home” can be ignored, but in reality, the Spanish tax authorities (Hacienda) expect full reporting of your global assets.
These are the areas where I see expats run into problems most often:
- Selling shares or funds that trigger capital gains tax at 19–28%
- Holding money in non-compliant offshore accounts
- Missing annual reporting obligations on overseas assets (Modelo 720/721)
Smarter, More Efficient Options are Available to You
Spain offers legitimate, tax-efficient investment structures designed specifically for residents. One of the most effective is the Spanish tax-compliant investment bond.
Here’s why so many expats in Valencia and Madrid are switching to these structures:
- Your money still grows through diversified investments (funds, equities, etc.)
- Growth inside the bond is tax-deferred — you only pay tax when you withdraw
- Withdrawals are treated proportionally, so only a small part is taxable
- No annual reporting required on the underlying investments
- It simplifies wealth management — one structure, one report, all compliant with Spanish law
For example, if your investment grows 5% in a year and you take a small withdrawal, only a fraction of that amount is taxable – not the full sum. Compare that to a General Investment Account, where every sale or fund switch could trigger tax immediately.
Building Your Wealth with Peace of Mind
The goal isn’t just to save tax — it’s to grow wealth sustainably, with peace of mind.
By using compliant structures, you can:
- Avoid unnecessary annual tax drag on your investments
- Allow your capital to compound over time
- Keep your financial reporting simple and transparent
And when it comes to retirement planning or accessing your UK pension, having your investments structured correctly in Spain makes a world of difference to how much you actually keep.
Why Personal Advice Matters
Every expat’s situation is unique — from how income is generated, to where assets are held, to whether a move is permanent or temporary.
That’s why getting regulated local advice matters.
The Spanish system can be generous when you plan properly – but unforgiving if you don’t.
So before you make any investment or draw from your pension, take a moment to review your setup. The right structure today can save you thousands over the years ahead, and keep your finances aligned with the lifestyle you came here to enjoy.
Spain rewards those who plan ahead. Take the time to understand your options, and you can enjoy the life you moved here for – without letting unnecessary taxes eat into what you’ve built.
If any of this resonates with your situation, the best next step is a conversation.
About Matthew
Matthew Green is a UK-qualified financial adviser based in Spain, working with British and international expats across Valencia, Madrid, and the wider Costa Blanca region.
He is a member of The Spectrum IFA Group — one of Europe’s leading independent financial advisory firms for expatriates — and is regulated to provide cross-border financial advice.
Matthew’s approach is straightforward: understand your life first, then build a plan around it. No jargon, no pressure, no one-size-fits-all solutions.
What to Expect:
It starts with a conversation — usually 20 to 30 minutes. There’s no preparation needed on your part. We’ll talk about your situation, what’s on your mind, and whether there are areas where I can help.
There’s no cost, no obligation, and no pressure. The goal is simply to give you a clearer picture of where you stand.
Spectrum IFA begins Employee Ownership for a Sustainable Future
By Spectrum IFA
This article is published on: 14th October 2025
14.10.25
Empowering People, Ensuring Continuity, and Deepening Commitment to Clients
At The Spectrum IFA Group, our success has always relied on our people, their expertise, dedication, and a shared belief in doing what is best for our clients. As a firm founded on trust, transparency and building long-term relationships, we recognise that sustainable growth depends not only on sound financial advice but also a solid grounding in joint ownership and responsibility.
Since its inception, Spectrum has aspired to share company ownership with its advisers and staff. Establishing a clear succession plan is essential, not only to ensure business continuity but also to provide long-term security for our advisers, employees, and most importantly, our clients.
Today, Spectrum’s advisers and staff collectively hold over 15% of the company’s share capital. This initiative reflects our belief that those who contribute daily to looking after our clients’ interests should also participate in the company’s growth. In 2026, Spectrum plans to increase employee and adviser equity participation to approximately 30%. Our longer-term intention is for advisers and employees to own 48% of the business, with the remaining 52% retained by the founders.
This approach demonstrates our commitment to creating a resilient, people-focused organisation where everyone has a vested interest in delivering exceptional advice and service. By aligning ownership with those who directly support our clients, we are securing our longevity whilst embedding the long-term continuity of relationships that help define our unrivalled service standards.
At Spectrum, we view this as more than simply an exercise in restructuring company ownership – it reflects of our core values. We are building an organisation that empowers people, rewards dedication, and safeguards the future security of our clients, advisers, and employees alike. Together, we are shaping a stronger, more sustainable Spectrum team for generations to come.
Modelo 720 Spanish Tax Form
By Jett Parker-Holland
This article is published on: 13th October 2025
13.10.25
When people move to Spain, they often expect challenges around property or residency, but one of the biggest surprises comes from the tax office. After settling in, most people become accustomed to the Spanish tax system; however, one common pitfall that British expats encounter is the requirement for a single tax reporting form, known as Modelo 720.
Importantly, this is not a tax bill; it is a declaration, but failing to address it correctly can still result in hefty penalties and unnecessary stress.
The Modelo 720 is an annual information return that Spanish tax residents must file if they hold certain assets abroad worth more than €50,000 in any of three categories: bank accounts, investments, and property. Once filed, it does not need to be submitted again unless your foreign-held assets increase by more than €20,000, or your wealth in another category exceeds the €50,000 threshold. It aims to give the Spanish tax authorities a clear picture of your worldwide wealth.
Importantly, the form itself does not create a tax liability, but it can leave you open to scrutiny, which is where the risk lies. Failure to declare or even minor errors can lead to fines, backdated tax assessments, and interest charges. Once you’re on Hacienda’s radar, future scrutiny tends to increase, which is a headache nobody wants when settling into life in Spain.
Many expats worry that the cash and investments they have held in the UK may pose a potential issue with the Modelo 720, and that failing to declare in previous years may prevent them from doing so now. The good news is that by structuring your finances in advance, you can avoid this problem altogether. Certain Spanish-compliant investment bonds are not classed as foreign assets for Modelo 720 purposes, meaning you don’t need to declare them. For those anxious about declaring, this can be a great opportunity to structure your wealth so that it does not need to be declared, thereby avoiding ongoing scrutiny.
Beyond avoiding declaration, a bond allows for tax-deferred growth within the bond, meaning that your wealth can continue to collect interest and benefit from favourable tax treatment on withdrawals. Spanish-compliant bonds are not just about avoiding taxes or declarations; they are about ensuring compliance with Spanish regulations. For many of my clients, transferring assets into a compliant bond is the single most significant step they take to streamline their financial life in Spain.
Modelo 720 may seem like a minor formality, but mishandling it can turn into an expensive problem. By structuring your wealth effectively, you can reduce the risk of fines while also gaining ongoing tax efficiency and estate planning benefits. If you are already living in Spain or planning a move, now is a good time to review your arrangements.
A Spanish-compliant product is (almost) a prerequisite for an expat investor in Spain; it is the cleanest way to stay on the right side of Hacienda while keeping your money working hard for you.
As a Chartered Wealth Manager with a master’s degree in Investment Management, I specialise in helping British expats in Spain manage pensions, investments, and tax-efficient structures. With years of experience advising across both the UK and Spain, I focus on making cross-border finances simple, compliant, and effective for the long term.
If you would like a confidential review of your situation or would like to explore your options, please don’t hesitate to contact me. Proper planning today can save you a great deal of time, money, and stress tomorrow.
Smart investing for expats in Spain
By Chris Burke
This article is published on: 13th October 2025
13.10.25
Regular saving & investing for Expats in Spain: A New Way to Build Your Future Wealth
For many of my clients here in Catalonia and across Spain, their wealth is locked away in their home/property. It’s a comforting form of security, however most people understand the need to make their surplus money and savings work for them —as the years are passing and the need to plan for future expenses and retirement are becoming ever more important.
But here’s the challenge:
If you live in Spain, your options for tax-efficient long-term saving are extremely limited — unlike in the UK, where private pensions allow contributions of up to £60,000 per year with valuable tax relief.
So, what can you do if:
- You don’t have a large lump sum to invest right now, but
- You do have a monthly disposable amount that you could commit toward your financial future?
Until recently, the answer wasn’t encouraging. Most products available locally offered poor returns, high fees, and were designed to benefit the banks or institutions more than the investor.
That’s changed.
Today, we have a cost-efficient investment strategy that allows our clients to start with a modest initial amount and then add to it monthly — a plan that truly works in your favour.
Here’s why it’s such a powerful approach and can increase your wealth allowing your money to pay for future life goals:
1. Compounding Growth: Your Money ‘Making’ Money
When you invest regularly, your returns begin to generate returns — that’s the magic of compound interest.
For example:
- Initial investment: €50,000
- Monthly contribution: €1,000
- Average annual return: 6%
Timeframe: 10 years
At the end of that period, your total balance could exceed €254,850.
The rule of 72 is a handy guide here: divide 72 by your annual return (72 ÷ 6 = 12 years), and you’ll see how long it takes to double your money. The longer you invest, the more powerful compounding becomes.
2. Smoothing Out Market Volatility (Dollar/Euro-Cost Averaging)
By investing a fixed amount every month, you buy more when prices are low and fewer when they’re high — automatically reducing your risk.
This strategy, known as dollar/euro-cost averaging, helps take the emotion out of investing and smooths out short-term market swings.
Over time, it leads to a lower average cost per unit and more stable growth.
3. Time in the Market Beats Timing the Market
Even professional investors can’t consistently predict when to buy or sell.
What matters most is staying invested — because missing just a few of the market’s best days can dramatically impact your long-term returns.
A disciplined monthly investment keeps you in the game and lets you capture long-term market growth without the stress of guessing when to act.
4. Builds a Strong Saving Habit
Treat your monthly investment like a bill — a payment to your future self.
This simple mindset creates powerful financial discipline and ensures you’re always moving closer to your goals, even when life gets hectic.
5. Your Money Working Harder — and Smarter
Regular investing means your money is always working for you.
Through dividends, interest, and capital growth, your returns compound over time — accelerating your wealth creation.
6. Protecting Your Wealth Against Inflation
Cash sitting in a bank account is losing value every year due to inflation.
Investing in assets such as stocks, bonds, or diversified funds gives your money a real chance to outpace inflation and grow in real terms.
7. Building Financial Independence
Consistent, long-term investing helps you create assets that generate income and give you freedom.
Whether your goal is a secure retirement, helping your children with education, or achieving financial independence, this strategy is designed to get you there — steadily and confidently.
In Summary
You don’t need a fortune to start — just commitment, consistency, and a smart structure.
Our investment strategy gives you the flexibility to start small, save a sizeable monthly disposable amount, and build meaningful wealth over time — without the high costs or complexity of traditional financial products.
If you’re an expat in Spain ready to make your money work harder for your future, now is the time to act.
Ready to see how this could work for you?
Get in touch for a confidential, no-obligation conversation about building your financial future in Spain – NOTE, a minimum saving amount of €1,000 per month applies.
If you would like to have an initial consultation to explore your personal situation, you can do so here.
Click here to read independent reviews on Chris and his advice.
Driving in Spain as an expat
By Matthew Green
This article is published on: 4th October 2025
04.10.25
What you need to know about licences and rules
If you’re planning to drive in Spain as an expat, there are a few important things to know before hitting the road. From converting your license to understanding local rules, here’s a complete guide to make the process easier.
Can You Drive on Your Current Licence?
- EU/EEA Drivers: You can use your existing licence, but you may need to exchange it after two years of residency.
- Non-EU Drivers: You can usually drive with your foreign license for up to 6 months after becoming a Spanish resident. After that, you must get a Spanish licence.
- UK Drivers Post-Brexit: UK licences are no longer automatically valid beyond 6 months, but there’s a process to exchange without retaking the test (if done within the allowed timeframe).
How to Exchange Your Licence for a Spanish One
You’ll need:
- Valid foreign driving licence
- Proof of residency (padrón certificate)
- Passport/NIE
- Medical check at an authorized center (psicotécnico)
- Passport-size photos
- Application fee (around €28)
Appointments are booked through the DGT website (Spain’s traffic authority).
Driving Rules Expats Should Know
- Speed limits: 120 km/h on motorways, 90 km/h on secondary roads, 30 km/h in many urban areas.
- Always carry: licence, insurance, car papers, high-vis vest, and warning triangle.
- Using your phone while driving—even on speaker—can result in heavy fines unless hands-free.
- Alcohol limit: 0.5 g/l (lower than in some countries).
Insurance and Car Registration
If you bring your own car from abroad, you’ll need to register it in Spain and pay the relevant taxes. This can be complex—many expats hire a gestor to handle the process.
Plan Ahead for a Smooth Transition
Sorting out your driving documents is just one part of settling in Spain. Managing taxes, pensions, and investments under Spanish rules is another big step—and getting it right early can save you stress and money later.
As a financial planner with The Spectrum IFA Group here in Valencia, I help expats like you plan smart so you can enjoy life without financial worries.
If you’d like a free, no-obligation chat about setting up your finances for life in Spain, feel free to get in touch. It’s all about making sure you can enjoy everything Valencia has to offer—without financial stress.
The Cost of Living in Valencia
By Matthew Green
This article is published on: 29th September 2025
29.09.25
How to Budget for Your New Life
Valencia is one of Spain’s most attractive destinations for expats—and for good reason. With its stunning beaches, vibrant culture, and affordable lifestyle compared to other European cities, it’s no wonder so many people choose to call it home. But before you pack your bags, it’s important to understand what life in Valencia really costs and how to plan your budget.
Housing Costs
Accommodation is likely to be your biggest monthly expense. Valencia offers a wide range of housing options, from modern apartments in the city center to charming villas on the outskirts.
- City Centre: Expect to pay €900–€1,300 per month for a two-bedroom apartment in areas like Ruzafa or El Carmen.
- Suburban or Coastal Areas: Prices drop as you move away from the center—€700–€900 can get you a similar apartment in quieter neighborhoods or near the beach.
- Buying Property: Valencia is still more affordable than Barcelona or Madrid, with prices averaging €2,000 per square metre, but the market is heating up.
Tip: Factor in community fees (for building maintenance), property taxes, and if renting, a deposit (usually one or two months’ rent).
Food and Entertainment
Spain is famous for its food culture, and Valencia doesn’t disappoint. From traditional paella to modern tapas bars, eating out can be surprisingly affordable compared to Northern Europe or the US.
- Groceries: A weekly shop for two people costs around €50–€70 at local supermarkets.
- Dining Out: A menu del día (three-course lunch) costs €10–€15, while dinner for two at a mid-range restaurant might be €40–€60.
- Coffee & Drinks: Coffee is usually €1.50–€2, and a glass of wine is often under €3.
Entertainment such as cinema tickets, concerts, and cultural events are also reasonably priced – expect €8–€10 for a movie ticket.
Education and Transport
If you have children, education will be a key factor in your budget.
- Public Schools: Free for residents, though lessons are mainly in Spanish and Valencian.
- Private Schools: Fees start at around €300 per month.
- International Schools: For English-language or IB programs, expect €700–€1,200 per month per child.
Transport is another area where Valencia shines:
- Public Transport: A monthly metro/bus pass is about €40.
- Driving: Fuel is currently around €1.60 per liter, and parking in the city can be challenging and costly.
Hidden Costs Expats Often Overlook
Many new arrivals forget to budget for these:
- Healthcare Insurance: If you’re not eligible for public healthcare, private plans start at €50–€100 per month.
- Taxes: Wealth tax, property tax (IBI), and possible double taxation issues—always check your situation before moving.
- Paperwork & Administration Fees: NIE registration, residency paperwork, translations, and notary costs can add up.
- Home Setup Costs: Furniture, appliances, and deposits for utilities.
Final Thoughts
Valencia offers a fantastic quality of life at a relatively affordable price, but like any move, planning ahead is key. Create a realistic budget, understand where your biggest costs will be, and allow some flexibility for the unexpected.
As a financial planner with The Spectrum IFA Group here in Valencia, I help expats like you plan smart so you can enjoy life without financial stress.
If you’d like a free, no-obligation chat about setting up your finances for life in Spain, feel free to get in touch. It’s all about making sure you can enjoy everything Valencia has to offer—without financial stress.
School fees in Valencia
By Matthew Green
This article is published on: 19th September 2025
19.09.25
If you are a parent in Valencia and are concerned about how to meet the rising cost of private education, you are not alone. Many families are looking for smarter, more tax-efficient ways to cover these expenses without depleting their hard-earned savings.
At The Spectrum IFA Group, we help clients create investment strategies that can provide reliable income streams for school fees — while protecting wealth for the future.
The García Family Example
Mr and Mrs García live in Valencia and, like many families, are planning for the cost of private education for their children. With nursery fees averaging around €800 per month and secondary school fees closer to €960 per month, they wanted to ensure that they could cover these costs in a sustainable and tax-efficient way.
After speaking with their adviser at The Spectrum IFA Group, they looked at how best to structure their savings to provide the required income without eroding their long-term capital.
Using Investments to Generate Income
The Garcías had €250,000 available, which they invested into a tax-efficient bond. With an assumed long-term growth rate of around 5% per year, they were able to withdraw approximately €12,500 annually (about €1,040 per month).
This income stream was enough to cover the monthly school fees, while keeping the original capital invested and growing over the years.
Tax Efficiency Matters
In Spain, life assurance bonds are particularly attractive because of their favourable tax treatment. Only the gain portion of each withdrawal is taxable, making the early years especially efficient.
This structure meant the Garcías could cover school fees with minimal tax drag and without dipping into their capital base.
Flexibility and Peace of Mind
By using investment growth to fund school fees, the family maintained:
- Flexibility — withdrawals can be adjusted if fees change over time.
- Capital protection — their €250,000 remained invested for future needs, such as university costs.
- Estate planning advantages — the investment can be passed on seamlessly and tax-efficiently to their chosen beneficiaries.
The Importance of Ongoing Advice
As with any financial plan, regular reviews with their Spectrum adviser ensure the investment stays on track, adapting to changes in fee levels, market conditions, or family circumstances.
Summary: By structuring their savings intelligently, families in Valencia can meet the challenge of private school fees while preserving wealth for the future.
If you would like to explore how your savings and investments can be structured to provide for school fees — or other future goals — in a tax-efficient way, speak to The Spectrum IFA Group. A personal consultation will give you peace of mind that your plan is sustainable and tailored to your family’s needs.
Valencia’s local secrets
By Matthew Green
This article is published on: 15th September 2025
15.09.25
So you’ve made the move to Valencia—or you’re planning to. Now comes the fun part: exploring everything this beautiful city and region have to offer. Sure, you’ve heard of paella and the beach, but Valencia has so many hidden gems and local traditions that make life here truly special.
Here are some must-do experiences for newcomers that will help you fall in love with your new home.
Dive into Valencia’s Festivals
Valencia knows how to celebrate, and no event is bigger than Las Fallas in March. For two weeks, the city turns into an open-air art gallery filled with giant sculptures, fireworks every day (mascletàs), and all-night street parties. It’s loud, colorful, and unforgettable.
If you’re feeling adventurous, take a day trip to La Tomatina in Buñol—a world-famous tomato-throwing festival held in August. Wear old clothes!
Explore Albufera Natural Park
Just 20 minutes from the city, Albufera is a serene lake surrounded by rice fields—the birthplace of paella. Take a boat ride at sunset, watch the birds, and finish with a traditional paella in the village of El Palmar. This is Valencia at its most authentic.
Discover Montanejos Hot Springs
Need a break from the city? Head inland to Montanejos, a stunning mountain village known for its thermal springs and turquoise river pools.
Perfect for hiking, swimming, and soaking up nature.
Enjoy Valencia’s Beaches Like a Local
Everyone knows about Malvarrosa Beach, but if you want something quieter, try Playa de la Patacona or head to El Saler, south of the city, for natural sand dunes and crystal-clear water.
Taste Authentic Paella Where It Was Born
Skip the tourist traps on the beach and head to local favorites in El Palmar or the Ruzafa neighborhood.
Remember: paella is a lunch dish, not dinner. And yes, the real one has rabbit and chicken—not seafood.
Embrace Valencia’s Café Culture
Valencians love their coffee breaks. Find a sunny terrace, order a café con leche, and watch the world go by. Try horchata too—a sweet, milky drink made from tiger nuts, served ice cold with fartons (pastry).
Cycle the Turia Gardens
The old riverbed of the Turia is now a 9 km green park running through the city.
Rent a bike, take a picnic, or just stroll past gardens, playgrounds, and the futuristic City of Arts and Sciences.
Shop Like a Local at Mercado Central
This grand market is one of the largest in Europe and a feast for the senses—fresh produce, seafood, and local delicacies. Go early in the morning for the best experience.(pastry).
Join a Language Exchange
Want to improve your Spanish and make friends? Valencia has dozens of language exchange meetups where locals and expats come together for conversation. Great for breaking out of the expat bubble.
Take Day Trips Beyond Valencia
From the orange groves of Xàtiva to the beaches of Cullera and the historic charm of Peñíscola, there’s so much to see just an hour away.
Plan Ahead for a Smooth Transition
Valencia is full of amazing experiences—but while you’re discovering its culture, don’t forget about your financial future here in Spain. Things like tax planning, pensions, and investments work differently, and the right structure can make a big difference.
As a financial planner with The Spectrum IFA Group here in Valencia, I help expats like you plan smart so you can enjoy life without financial stress.
If you’d like a free, no-obligation chat about setting up your finances for life in Spain, feel free to get in touch. It’s all about making sure you can enjoy everything Valencia has to offer—without financial stress.
Spain’s Budget 2025
By Tom Worthington
This article is published on: 12th September 2025
12.09.25
Setting the stage: Brussels wants homework in October
While the UK plays calendar Enie Meenie minie mo with Spring/Autumn Budgets (and the occasional “surprise!” emergency one), the EU prefers punctuality. Every October, member states hand in their budgets like model students. In 2024, everyone also had to submit a four-year plan to steer national debt toward (or below) 60% of GDP—the EU’s collective happy place.
Spain, after a domestically bumpy 2024 (Reuters politely called the 2024 draft “discontinued,” which is the fiscal equivalent of “we meant to do that”), pivoted to 2025—and got Brussels’ nod in late November for a longer seven-year clean-up plan under the rebooted EU fiscal rules. Translation: fewer vibes, more spreadsheets.
What actually changed (a.k.a. the “please don’t shoot the messenger” bit)
Goodbye, tax holidays
- Basic foods slid back to their usual 4% VAT, olive oil included (collective sigh across Iberia).
- Electricity returned to 21% VAT.
- Fuel duty nudged up.
Net result: monthly bills did the opposite of “Mediterranean chill.”
Nine new tax rises for 2025
Congress kicked off the 2025 tax year with nine approved increases, targeting roughly €4.5bn/year in extra revenue. Among the eyebrow-raisers:
1. “Bank Tax”: A progressive levy on net interest margin + commissions earned in Spain (roughly 1% to 7%).
2. Savings Income Tax: For incomes over €300,000, the top rate rises from 28% to 30%.
*Yes, this can touch insurance policy withdrawals and other taxable gains—mainly relevant for the well-heeled.
Business translation: banks are the piñata; high-net-worth savers bring an extra 2% candle to the tax cake.
Property:
The spicy bit everyone is arguing about…
Regional Property Transfer Tax still varies (hello, Valencia at 10% for buyers, residents and non-residents alike).
But the big headline: reports that Spain is considering a tax of up to 100% on properties bought by non-EU residents (yes, that includes the UK and US).
- PM Pedro Sánchez framed it as an “unprecedented” step amidst a housing emergency, warning against a society split into “rich landlords vs. poor tenants.”
- He cited 27,000 homes bought by non-EU residents in 2023 “not to live in, but to make money.”
- The Property Registry estimated foreigners (EU + non-EU) were ~15% of sales in 2023 (~87k of 583k total).
Important fine print: This is about plans and proposals being discussed, not a done deal. If you’re a non-EU buyer, keep your lawyer on speed-dial and your pulse steady.
Wealth & Solidarity: the sequel nobody asked for (but everyone pays attention to)
Spain has long had Wealth Tax for residents with net wealth ≥ €700,000, but regions can—and did—play with allowances. Madrid and Andalucía famously went full 100% relief.
Cue the central government’s 2022 plot twist: a “temporary” Solidarity Tax layered on top, using Wealth Tax rules as the base. Exemptions broadly still apply (primary home up to €300,000, business assets when it’s your main activity, and qualifying shareholdings >5%—or >20% family-owned). After exemptions, Solidarity hits at:
- €3m – €5,347,998: 1.7%
- €5,347,998 – €10,695,996: 2.1%
- Above €10,695,996.06: 3.5%
Also remember: non-residents can face Wealth Tax on Spanish-sited assets. Double Tax Treaties may soften the edges—but bring a professional to the knife fight.
The surprisingly cheerful chapter:
Inheritance tax (mostly) retires to the beach
Spain’s regions have been trimming Succession Tax like a minimalist Marie Kondoing their wardrobes:
- Madrid: 99% relief for Groups I & II (close family) for years now, plus 25% relief since 2023 for siblings, uncles/aunts, nephews/nieces.
- Andalucía (since 2022): €1m allowance + 99% relief for spouses/ascendants/descendants (inheritances; gifts differ). Group III allowance €10,000, top rate 26%.
- Balearic Islands (from 18 Jul 2023): 100% reduction for Groups I & II (residents only). Group III? -50% for siblings/uncles/aunts/nephews/nieces; -25% for in-laws.
- Canary Islands (from 6 Sep 2023): 99.9% reduction for Groups I–III, and for gifts to I–II.
- Valencia (draft approved 5 Sep 2023): 99% reduction for Groups I & II, mirroring Murcia/Andalucía vibes.
Estate-planning translation: check your postcode—it matters more than your zodiac sign.
Who should care (and why)
- Banks: Expect margin/comms to feel… taxed. (On the bright side, you’re still not a fintech.)
- High-net-worth investors: That 30% top savings rate taps your shoulder at €300k+ incomes. Tax deferral may become your new best friend.
- Non-EU property buyers: Keep watching the “up to 100%” tax proposal. This is the policy equivalent of a weather warning: it may drift, split, or hit land.
- Heirs in certain regions: Inheritance tax often now says, “I’m off to Ibiza.” Confirm local rules, then celebrate responsibly.
Jargon-buster (with tapas)
- TARIC: The EU’s giant library of tariff codes—great for insomniacs and importers.
- Wealth vs. Solidarity: Same family, different personalities. Solidarity uses Wealth Tax’s base… and adds an extra bill for the very wealthy.
- Groups I–III: Family-proximity ladder for inheritance reliefs (spouses/children up top; in-laws somewhere near the sand).
Practical checklist (so you can look clever on Monday)
- If you bank or broker in Spain: Model the 1–7% bank tax impact on your P&L and pricing.
- If your savings income can top €300k: Re-evaluate wrappers, timing of withdrawals, and asset location.
- Thinking of buying in Spain as a non-EU resident: Pause, get advice, and track the 100% property tax proposal closely.
- Inheritance planning: Re-run scenarios by region—reliefs can be massive, but rules differ.
- Budgeting households: Expect higher baseline costs from VAT/fuel/electricity resets; shop around, switch tariffs, and stop treating olive oil like cologne.
Conclusion
Spain’s 2025 plan blends EU-approved fiscal discipline with domestic social aims—and a dash of headline-grabbing housing policy.
For investors and families alike, the theme is simple: location matters, timing matters, and reading the footnotes definitely matters.