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Hi all we are new here and looking to move to Spain in 3 years time.
here’s the deal- we are looking to sell our home in the uk where we will then have 200k
looking to buy a property for 100k and use the remaining 100k to live on. There’s 2 of us and we have costed this will last us 10 years.
within that time we will come into an amount of inheritance which we will use to buy a property back in the uk to rent out the income from this would be our income to live on.

however, we have just read that to apply for a lucrative visa we would need to prove we have more than this to live on.
Is that correct? Is there something we are missing or haven’t considered here?

we are now thinking our well thought out plan probably can’t happen.

any advice and guidance much appreciated

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There is no double taxation agreement with respect to inheritance. If you inherited from UK you could face tax in both Spain and UK. This might effect the size of the pot.
Plus you intend to live on 10,000 a year between two of you...for 10 years! That's just over 700 a month. Life must be pretty bad if those numbers tick your boxes.

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Hi we would keep those funds in our uk bank account and transfer over a small amount on a monthly basis. Would that work?

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Roughly speaking, for non-lucrative visa (NLV), you need an annual income of around 32,270 euro or £27,581 for a couple. It can be regular income such as rents from properties, pensions, investment or pro-rata lump sum. For the first NLV valid 12 months, you need 32,270 euro, and for Year 2 and 3 renewal you need 2 x 32,270 euro and the same again for Year 4 and 5 renewal. After 5 years you get permanent residency.

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Not legally. If you are resident you would need to declare in Spain.

£100 does not seem sufficient for two to live on. £10K per year might be enough to scrape by on today? Have you costed private medical insurance. Have you considered inflation? What will £10K buy you in 13 years time? ....... How much do you currently live on?

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Hola

10,000 a year is just over 800 a month not 700 a month

When I came to Spain in 2003, I had about 100,000 to last me for 9 years until I received my old age pension - However, my first pension began three years earlier at 62, and my second pension began at 63 years old.
I was able to take 25% lump sum from my other pensions and still had enough to live here "comfortably" as in there is some money left over at the end of the month.

The years from 2003 have been very kind to me as I did my calculations allowing for interest on my money saved but with inflation eating it away at a greater rate than the interest added to it. In the event, inflation has been significantly less than expected so I am theoretically better off.

I also had a buffer back up of a few stocks and shares which I sold off one year after my full retirement.

I live in one of the cheaper areas of Spain

From living the above, I think your budget is too tight.

Davexf

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Hi thanks for all the replies so far.
As we wouldn’t have a massive mortgage or rent outlay the outgoings would purely be for insurance, water, gas elec, broadband and so on.
we think we could easily do this on 12k a year for just the 2 of us.
we have been watching many YouTube accounts for a while regarding expenses and outgoings suggesting between 7-900 per month including food and eating out once a week.
do you guys not think this is achievable?

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Thankyou for this. My husband would also be able to draw his pension in around 8 years time. So although we know we have 100k possibly more to last us 10 years really it only needs to be 8.

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With two of you, it will be cutting it close with €10,000 and because you have to show the €32,000 as some form of income there may be tax to pay on this somewhere.

€10,000 is €833 a month.

Just for fun I will share our outgoings, as there are two of us living off my private pension and savings, as you will be.

Healthcare for two €1680 a year (paid yearly which I think you need for the visa, did last year when we became resident) Maybe paid monthly after but not sure, we pay in one go for a 10% discount. We were 57/58 when we took out the policy, with no issues, except for a couple of minor ones my wife has which cost an extra €100 or so for the first year.
Car insurance €250 a year fully comp on a 2007 Citroen C4 (I have a classic Moke as well, but thats by the by)
Contents and Buildings insurance €420 a year for a 3 bed 2nd floor flat (we have a rebuild insurance with the community fees) so this is contents and my classic downstairs and all risks on household stuff
IBI (council tax) €410 a year.
Rubbish collection €110 a year
Electric average €55 a month
Mobile phone (total for 2) €24 a month
Water €130 last year
Food and drink and going out €400 a month (varies depending how often we go out)
Internet €30 a month.
Odds n sods €75 a month (stuff from the chinese bazar, leroy merlin etc)
Running costs for car €60 a month
Community fees €432 a year
Gives us €11,132 basic or €927 a month.. Cutting it fine,,,

Now I know we spent more than that last year, in fact we went through about €15,000 because we had some work done, the car broke down (the classic needed 4 new tyres to pass the ITV) and we don't have a pool, garden or any of the outside stuff. But I decorated, planted up the balcony and I spend on art materials and rubbish on Amazon (like any bloke)

Depending on the area you want to move to €100,000 is not going to get you much in the way of a house (I will wait for the replies about villa's for 20c) :)

Also inheritance depending on the area you live will be taxed, here in the Alicante area (maybe the whole of Valencia Region) you get €100,000 before tax is due.
And you would then be taxed on the income your rental would be generating in the Uk, as well as any income from your pension (the allowance is not as good as the Uk)
So you will need (or not I don't know how confident you are with Spanish form filling) the services of a tax advisor on top as well.

Do you want a pool at your house? Factor in that as well, if it has one there are costs.
Oh. around here we also have 10% purchase tax on property (so the €100,000 house actually costs you €110,00)
Will you want to drive? Need the money for a car, but if you hold a Uk drivers licence you will need to take a test (more expense). (and someone will be along to tell you in a minute that the Uk are 'talking' to Spain about reintroducing the swap)

Last point and Im sorry if some of this is negative, but a good one to think about
Don't move here in the same financial year you sell the house (Spain will tax you on that as well).
Also 25% from the pensions is also taxable here so do the same thing (i moved my 25% out on 31st Dec 2019 and we moved here in August 2020)

All in all, what do you spend in the Uk if you remove the mortgage?
You should use this as your yardstick. We did, when we planned our move I wanted like for like or better (ok didn't have a mountain view in the UK but the sea was within stone throwing distance)
If you are going to move to a strange country then it should be for a better and easier life

Just my 2c (your milage may vary)

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Trying to calculate how much you need to live in Spain might be possible if you were intending to move now but the OP is not thinking about doing it until 3 years then intending to hang on for another ten. One thing is for sure - you have to probably cost in inflation so it will be alot more than now.

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Don't forget the pound:euro exchange rate can vary greatly - this can be good news but also bad!

I suggest you save hard in the meantime and keep reviewing your plans as many things will change.

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Apart from the visa requirements I wouldn't rely on YouTube videos. Spain is not Thailand and things cost money. When you buy your own home all other costs need to be considered too and what happens when the heat pump or boiler breaks down? Suddenly you might need to go to the dentist and there are always added costs.

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As others have said when(not if) the pound goes belly up after Johnson triggers Article 16 to deflect from his sleaze problems and/or there is another financial crash then relying on a lump sum is always tricky and dangerous

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Yes, watching BOJO carefully.... Unfortunatly the UK is currently being led by a COMPLETE BUFFOON!

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Do you know if there is a double taxation agreement for Capital Gains Tax on the sale of a UK house. I thought I'd seen on this forum someone saying that you didn't pay the tax twice, but from what I see on the UK govt. site there is no such agreement. It seems a bit harsh having to pay that tax in two countries.

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Unless you have loads of money I wouldn’t even bother with Spain.

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What you do have is exemption from Spanish capital gains tax if you reinvest the proceeds into a Spanish principal residence, complete exemption if you reinvest 100% and pro-rata for lesser proportion. This has to be done within 2 years of selling your UK property, which must have been your principal residence.

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Tbe OP's question is probably moot as I seriously doubt that €100k in savings but no income will get them through a visa appication.

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We did something similar when we moved here in 2006 but that, of course, was before Brexit and having to show proof of considerably more financial resources than we ever did. I believe that for the purposes of obtaining the non-lucrative visa which you would need, the amount you need to show is approx €34k per annum for a couple. The visa has to be renewed in year 2 for 2 years, and in year 4 for a further 2 years untill you achieve permanent residency after 5 years, which means you still have to have €68k in reserve at the start of the 4th year - which, if you have been running down the capital to live on, might prove a problem. Those amounts will increase each year because they are based on the Spanish income figure above which a person would not be able to claim benefits, ie not be a burden on the state and that figure goes up each year but it is impossible to predict how large those increases might be.

In terms of the feasibility of such a plan, we knew that 3 years after we arrived my husband would start to draw his Local Government pension, and 5 years after that he would start to receive his UK state pension as well. Then 2 years after that I would start to receive my final salary pension from a former employer and a small Civil Service pension as well, and finally 6 years after that (which will be next year) I would get my UK state pension too. I also have a small SIPP pension I don't take any income from because I don't need it, so I leave that invested to provide some capital growth. So we could be sure that our incomes would gradually increase and we would not have to draw so much on our capital. It was just as well, because I'm sure you know what happened just about a year after we moved - the global financial crash. We had been getting 5.5% pa interest on our capital even in instant access deposit accounts and that dwindled to almost nothing within quite a short space of time. The sterling to euro exchange rate was about €1.40 to the pound at the time we moved and dropped to almost parity at one time. With hindsight we would have been better off transferring all of our savings to Spain at the time we moved, but we hadn't wanted to do that. I am not saying that could happen again, but ten years is a long time and the political situation is so volatile in many ways that I feel it's impossible to plan with the same degree of confidence that we could 20 years ago.

We don't need to spend a great deal of money on day to day expenses (we don't have a car, for instance, as we live somewhere with excellent public transport links). But living a simple life just paying the bills and going out once a week would, for me, get pretty boring once the novelty of not having to go to work every day wore off. Before the pandemic I always travelled back to the UK twice a year to see family and friends, and we went away for holidays usually 3 times a year as well, sometimes just within Spain where there is so much to see, and sometimes further afield just for a change of scene. We also needed to move house because of health problems I developed, and that's an expensive process in Spain. Things do crop up which you would never expect, and you need a financial cushion to be able to cope with the unexpected if they are not to become huge problems. As others have said, things do go up in price (private health insurance and house insurance premiums certainly do increase every year, and this year a lot of people have experienced big increases in their electricity bills) so you cannot count on your budget staying the same year after year.

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I think your plan would be more viable in Portugal. The tax system is far less draconian (no asset declaration) and they do not tax inheritance derived from the UK. There is also the NHR scheme whereby your UK income would be taxed at 10% for ten years - it used to be zero.

As far as visas are concerned, the minimum income requirement is much lower in Portugal and I think you would qualify for their equivalent of a non lucrative visa.

Before the wretched Brexit, you could have scraped by in Spain on that income but I doubt you would qualify under the third country rules.

Do either of you qualify for an EU passport?

Another bonus I forgot to mention. All residents in Portugal are entitled to free state health care so no need to pay for private health insurance.

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I'd say it really depends what the OP expects from Spain and which location they are considering. Going to a random place in Portugal won't magically make life better and even Portugal is far from cheap these days. Sure you can still by cheap ruins and townhouses but these can often be far inland and infrastructure not great with more weather extremes. Can also be a lonely place and language even harder to learn.

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Guys, if BOJO triggers article 16 then the EU will pull the plug on the withdrawal agreement...

Not sure how that will impact the OP but generally it will be bad news.

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Thanks everyone.
just for clarity we were looking at the Almeria region.
I think based on all the fab advice we will keep saving and see what the situation is like in 3 years.
maybe we will purchase somewhere then as a holiday home rather than a permanent move?

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Well it was only a suggestion and in the event that Spain is not an option for the OP.

We have a foot in both Spain and Portugal and although I like both our homes equally, I would say Portugal has a slight edge over Spain. It's just an opinion.

I do know one thing though, if I was stuck in the UK right now I would be desperate to get out and would look at other places if my first choice was not an option.

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Why?

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For all the reasons that Lou posted. Did you not read his post?

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Of course but it all comes down to location anyway. The OP isn't stuck either and there's no point buying a property for 100K just for the sake of it. Buying the wrong property in the wrong area might mean you are really stuck and living in poverty is not the dream either. The OP replied anyway and I think it makes sense to save a bit more and see what happens in the next 3 years.

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Not the Withdrawal Agreement. The UK has already withdrawn under that agreement, it's ringfenced and can't be changed.
They will likely suspend parts of the Trade & Co-operation Agreement and if it keeps escalating they will suspend the entire thing, but that is separate from the WA.

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It will not affect the WA agreement. It only affects trade and would firstly mean no change for a year then another year of constant wraggling. It has got nothing to do with visas, residency rights etc

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The talks that are happening between EU and UK are getting nowhere. COP ends today, so it is being reported that once that is over BOJO might move on article 16. I could imagine the UK might suspends parts of the NI protocol, that it doesn't like. Sterling will tank.

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Almeria is extremely hot in the summer. Last summer really was hot for months and quite scary when it is over 40 as everything shuts down. Hard for people not used to sleeping during afternoons and no expensive AC. If global warming continues and it becomes a regular temp it could be pretty miserable

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I guess the bit that many people who have not experienced extended periods of 40C+ don't understand is that it is more opressive than constant rain. During the summer months I only go out during the day when I have to. I tend to sort out what I need to, first thing in the morning or the evening.

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A point I would also consider is the cost of visiting relatives and friends back in the UK, or them visiting you. I just checked my travel expenses and I average about 7k per year on flights, not including the cost of the actual visits, hire cars etc. This year has been a lot higher because of PCR/antigen testing. The family is wider spread than most but travel expenses are an important factor.

BarrieJ gave a good summary of basic costs. You may find you'll spend a lot more in the first years then calm down a little as the novelty wears off.

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"Or them visiting them you" - Covid 19 has saved me a fortune, preventing visits from relatives, who, by the way, never bothered when we lived in the UK.

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Yes, absolutely. There was one 12 month period when I had to make 4 unscheduled trips because of illness/death of close family members, and of course as they couldn't be booked in advance that added significantly to the costs.

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Where I was it was getting to 40. And electric was that expensive people didn’t want to use the AC. It’s seems like it’s getting hotter every year.

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Portugal just seems to have made things easier for expats to live there. Better tax laws. Cheaper visas. Just a lot easier for Brits to relocate there.

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One thing though: Portugal ain't Spain.

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One thing to bear in mind is inflation. At the moment in Spain its 5.4%!!!! This week you notice as it is starting to filter down into food. Look at the price of fish and fruit and veg compared with January. Now look at rents- they are going up. Soon hipotecas will go up. Not good- especially in Spain where wages haven't actually risen for years!!

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It is happening everywhere, not just confined to Spain.

The printing presses have been flat out with quantitative easing printing money. Now you have raw matereials, fuel, food shooting up.

Governments are using inflation as a tool to lesses the debt burden. You and I pay as the value of any of our cash savings diminish in value.

If you have a few quid tucked away, invest it in something tangible that will retain its value/pays some kind of a return.