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VISAS

How much money do Britons need for Spain’s non-lucrative visa in 2021?

A non-lucrative visa is one of the ways UK nationals wanting to move to Spain - or those hoping to spend extended periods of time in the country post-Brexit - can do so if they have enough financial means. 

How much money do Britons need for Spain's non-lucrative visa in 2021?
Photo: Alexander Gresbek/Pixabay

Since Brexit came into force on January 1 2021, UK nationals wanting to move to Spain  or spend part of the year here have a much harder task ahead than they used to. 

It will generally be harder to land a job or set oneself up as self-employed in Spain as a non-EU national, and the financial requirements for residency are more demanding than for Britons who were already registered as residents – or who can prove they were living in Spain before the start of 2021 and are now registering.

EXPLAINED: How Britons can live and work in Spain after Brexit

The other main pitfall for Britons in Spain is that without residency or a visa, they can only spend 90 out of 180 days in Spain (and the Schengen Zone).

However, showing you have the financial means to care for yourself and your family is one of the best ways to solve this.

This article is therefore geared to UK citizens who have either not landed a job in Spain yet, are not planning to work, study, do business or invest in the country and are not intending to obtain residency through having Spanish family roots or an EU partner.

The main focus will be the non-lucrative residency permit and any other option available to UK nationals for obtaining residency through financial means.

What is Spain’s non-lucrative residency permit?

A non-lucrative visa is an authorisation that allows non-EU foreigners to stay in Spain for a period of more than 90 days without working or carrying out professional activities, by demonstrating that they have sufficient financial means for themselves and, if applicable, their family.

In Spanish it’s called a “visado de residencia no lucrativa” and it’s often referred to as a retirement visa, as this is the best option for retirees from non-EU countries who want to move to Spain.

It is however available to third country nationals of all ages who can prove they have the financial means, and is also a good option for UK nationals who want to first travel and get to know Spain better for a year before starting work, as it allows for an easy conversion to a work permit.

Spain’s non-lucrative residency permit is a temporary residence visa which lasts for one year. Britons will still need to apply for a TIE residency card once they obtain their ‘NLV’ (non-lucrative visa).

The first and second residency renewals last for two years each, after which five years of residency will have been obtained and therefore the possibility of applying for long-term residency, which lasts for five years.

After ten years of residence in Spain, British citizens can obtain Spanish citizenship, although they will technically have to renounce their British nationality in the process.

The Spanish Embassy in London. Photo: Stephen Richards/Wikipedia

How much money do Britons need to show to get Spain’s non-lucrative visa?

This is a trickier question than it may seem as there are often discrepancies in what constitutes “sufficient financial means” between Spain’s regions, provinces and even the Spanish consulates and embassies from which foreigners apply for the visa (you apply from the UK, not from Spain).

Spain’s Royal Decree states that sufficient financial means “will not exceed the level of resources by which social subsidies are granted to Spaniards or the amount of the minimum Social Security pension”.

The Spanish government is referring to the IPREM, an indicator that in 2021 stands at €564.90 (£488.34 with the current exchange rate) per month, just under €30 more than in 2020.

The standard financial requirement for non-lucrative visa applicants is 400 percent of the IPREM: €2,259 (£1,952) per month.

So for a UK national wanting to apply for the non-lucrative residency permit for Spain for the first time (it lasts one year), the amount they need to prove is €27,115 (£23,436).

For every family member included in the residency application it’s an extra 100 percent of the IPREM you need to prove you have: €6,778 (£5,859) for the year.

So if a British couple is applying, it’s €33,894 (£29,300) annually in savings or a monthly income through investments, pensions or other assets of €2,824 (£2,441) a month.

For a UK family of three it’s €40,672 (£35,156); for a family of four it’s €47,450 (£41,015) and so on, adding €6,778 (£5,859) for each family member.

If you’re renewing your non-lucrative visa for the first and second time, bear in mind that you will have to prove you have 800 percent of the IPREM as the renewed residence permit is valid for two years.

For an individual that is €54,230 (£46,869) that they can prove they’ll have available.

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Remember that these figures are to be used as a reference, given the disparities in judgement of how much money constitutes ‘enough’ by the different immigration offices across Spain and Spanish embassies and consulates abroad. Remember to also factor in changing currency exchange rates.  

Balcells Group, an immigration law firm based in Spain, states that “depending on which consulate you apply in (for example in Washington or Moscow), the minimum amount is much higher” as the initial visa application has to be done in the country of origin or where you currently reside.

“There isn’t an exact amount given by Spanish authorities but from my experience it’s upwards of €30,000, although the figure can vary,” Margaret Hauschild Rey, an immigration lawyer for Madrid-based English-speaking law firm Bennet&Rey, told The Local.

“Obviously the more assets you can prove the better.”

The documentation required as proof of income can also vary, but many consulates require a recent bank account certificate, statements from the past six months and on occasions credit cards or property values can also be presented.

Are there any other important factors Britons should be aware of?

Aside from being able to prove a reliable, ongoing source of income and substantial savings, keep in mind that you will have to take out comprehensive private health insurance which offers the same cover as Spain’s public healthcare system.

“What they haven’t always necessarily factored in before committing to residency in Spain is how difficult it can be to obtain private health cover that’s well-priced or even available, especially for seniors or those with pre-existing health conditions,” Hauschild Rey told The Local.

This must be with a Spanish medical insurance company, be at least one year long and offer full coverage with no co-payments.

“Many foreigners are also unaware of the tax implications that come with spending long periods of time in Spain,” Hauschild Rey added.

“Spanish authorities consider you to be a tax resident if you spend more than 180 days a year in the country.

“Our advice is to speak to a fiscal adviser who is familiar with the tax systems of both Spain and the UK– whenever possible – if they want to get a full picture of how taxes and fiscal responsibilities compare.

Although you can’t work in Spain with a non-lucrative visa, you will be able to invest in shares or businesses in Spain as an extra means of income, but remember these will be subject to capital gains tax.

There is one other way that British nationals can obtain residency in Spain through having sufficient financial means: buying a property worth €500,000 through the scheme called “Residencia por adquisición de bienes inmuebles en España” known in English as the Golden Visa scheme. 

READ ALSO:  

How to make the most of Spain’s Golden Visa scheme

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RESIDENCY PERMITS

Spain vs Portugal: Which Golden Visa is better for you?

Iberian neighbours Spain and Portugal both offer the highly sought-after 'golden visa' for non-EU nationals who want to move to Europe. But what are the differences between them and which one is best suited to you?

Spain vs Portugal: Which Golden Visa is better for you?

Getting a visa or residency in a European country can feel near impossible if you’re a third-party national.

The EU’s ‘golden visa’ – sometimes known as as an investor visa – gives non-EU citizens the right to live in Europe, enjoy borderless travel within the Schengen zone, and even begin the process to gaining European citizenship if they meet several criteria.

This special visa is of particular interest to Britons searching for a way to move to the EU in the aftermath of Brexit, and has also proven popular with Americans, Russians, Chinese and Indian citizens who can afford it.

READ MORE: What foreigners should be aware of before applying for Spain’s Golden Visa 

What is a ‘Golden Visa?’

The golden visa is an EU immigration programme that awards residence permits in foreign countries in return for investment. It varies between countries (not all EU nations offer it), but often it involves purchasing a property of a certain value, creating a company or job opportunities, or in some instances contributing to a national development fund or investing in stocks and shares.

Two of the most popular European countries for golden visas (and for tourists and retirees in general) are Spain and Portugal. 

Since the scheme was launched back in 2013, the number of third country nationals applying has risen every year. In 2019, Spain issued this visa to a record 8,000 non-EU nationals.

Both countries are famed for their temperate climate, beaches, culture and relaxed lifestyle, but which of the golden visas is better: Spain’s or Portugal’s?

See below for the minimum investment needed; the type of investments you can make; how long it takes to get citizenship; whether the golden visa gives you free travel around the Schengen area; how long the application takes; the rules on residency, and how long you must spend in the country; and whether family members are included.

The facts

  Spain Portugal
Minimum investment required €500,000 €250,000
Type of investment Property over €500,000; €1 million in a Spanish company; €1 million in a Spanish bank account; at least €2 million in Spanish public debt securities. Property over €500,000 or urban renovation of €350,000; business startup creating at least 10 jobs; capital transfer of €1.5 million; research and development investment of €500,000; €250,000 contribution in the arts. 
Citizenship timeline 10 years 5 years
Schengen Travel? Yes Yes
Application time 20 business days processing once documentation is received; 2/3 months in total. 3-6 months
Residency rules Must visit Spain once a year. 1 week for the first year; 14 days every 2 years after.
Family included? Partner, dependents and children (under 18). Partner, dependents, children, parents of the main applicant if over the age of 65 years old (under 18 or dependent and unmarried children who are under 26 and in full-time education).

Changes to Portuguese Golden Visa

New visa rules came into effect in Portugal from January 1st 2022. These have mainly increased some of the minimum investment thresholds (but not the arts investment, which at €250,000 remains the cheapest route to a golden visa for either Portugal or Spain) and have changed some of the geographic requirements for property investment.

Keen to stimulate investment in the less touristy parts of Portugal, buying a residential property in big urban centres such as Lisbon or Porto or in the popular coastal regions such as the Algarve are no longer sufficient to qualify for a golden visa.

As of 2022, property investments must be in Madeira, Azores, or Portuguese inland regions and rural or low-density areas. In such areas, a 20 percent discount on the investment is offered.

You can find the full geographical breakdown of investment areas here, although be warned the text is in Portuguese. 

In Spain you can buy several properties which add up to €500,000

One option for the visa is to buy a property for €500,000 or more, but you are not required to spend it all on one property. You will still be eligible for the visa if you buy multiple properties, as long as the total amount adds up to more than €500,000.

The extra costs

Besides parting ways with half a million Euros to get a visa, both Spain and Portugal require some hefty application fees for the scheme.

Fee Spain Portugal
Application €70 per applicant €80 per applicant
Approval €5,000 per applicant €5,857 per applicant
Renewals €3,000 per visa holder €3,195 per visa holder
     

Tax benefits

One advantage of the Portuguese Golden Visa scheme is its tax rules.

Portugal’s Golden Visa program offers the ultimate tax advantage. Golden Visa holders are eligible for Portugal’s NHR Tax Scheme, a system that grants tax-exemptions for up to ten years.

Exemptions include income obtained from pensions, capital, income from property and capital gains, intellectual property and industrial property. The property tax transfer system means that Golden Visa holders pay the same rates as local residents.

In Spain, all foreign residents are taxed on their ‘worldwide income’ if they are in Spain for more than 183 days a year. For non-residents, tax is charged at 24.75 percent on income earned in Spain.

Getting the golden visa, however, doesn’t mean you have to reside in Spain or spend a certain amount of time here in order to renew it. This means that you don’t have become a tax resident. The only requirement is to visit once a year to renew your permit.

READ MORE: Property in Spain: Is now a good time to buy a home? 

The golden visa is retroactive in Spain

This means that if you already bought a property in Spain worth over €500,000 after 2014, but didn’t apply for a golden visa at the time, it’s still possible to do it now.

The property can be sold once you have obtained permanent residency in Spain. Once you have lived in Spain for more than five years and have obtained permanent residency, you are able to sell the property without forfeiting your right to reside in Spain.

You cannot, however, use a mortgage loan or financing for your investments. This cannot be done through a mortgage company or a loan, and must be from your own pocket.

Conclusion

Portugal and Spain’s golden visa schemes offer fantastic opportunities to relocate to an EU member state.

Both offer you the chance to enjoy borderless travel in EU member states, but they both also require you to have a significant amount of money saved up in order to invest it in property, renovation, shares, capital transfers, or debit securities.

If you’re concerned about taxes, perhaps the benefits of the Portuguese visa might entice you. It is worth remembering, though, that the recent changes to the Portuguese system now mean there are geographical limits on property investments meaning you can’t buy in popular areas. 

If you’re overly concerned about location, the Spanish golden visa gives you more freedom to choose where you live.

The sums for property investment are broadly similar, sitting at €500,000 in both countries, although in Portugal there are discounts for taking on renovation projects and purchasing property in sparsely populated areas which could reduce the amount of your investment quite significantly.

In Spain, the property threshold, regardless of where it is or what type of property it is, is a flat €500,000.

Both golden visas have very little in terms of residency requirements, although in Portugal the time to gaining citizenship is just 5 years, half of Spain’s 10-year wait. With the golden visa, in Spain you can obtain permanent residency after five years.

If you’re still undecided, the article below may help you pick between Portugal and Spain.

READ MORE: Portugal vs Spain – Which country is better to move to?

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