Does anyone have any advice or insight for retirement planning in Spain? I am currently in my mid-40s and have had an attachment to Spain for the past 28 years. It has occured to me that retirement is not all that far away and that I would like to begin thinking about spending part of my time in Spain. I am wondering if anyone has had experience with such planning and could offer an advice. I would like to buy an apartment now and eventually live 4-6 months per year in Spain (probably from Jan through July). Any thoughts or advice would be appreciated!

I'm possibly the last person to give advice on savings/pensions etc. However I would like to point out that property prices (in common with the UK) have gone up tremendously over the last 2-3 years. In fact I'm sure that a flat in Madrid now costs 2 to 3 times more than it would have done only 4 years ago.
One option is obviously to buy a resort house which can be let out in the summer months. Another option is to buy an apartment in Madrid or Barcelona which you can then let out (there's always a demand from English language teachers who would be ideal tenants - short-term but generally honest and good payers). I would guess there are books and web-sites to study on the buy-to-let situation. My only fear is that now you would be buying at the top of the price market. Any comments from others?

One of the companies that lets out properties in Northern Spain to UK tourists is called Casa Cantabricas (www.casas.co.uk). In a recent brochure they advertise a 2-bedroomed house in Asturias which is close to mtns but 35 km from the coast. Low season is £350 a week (?500 Euros), High season is £610 a week (?900 Euros). Obviously if you rented a property via this company you wouldn't get all of that. Even so it may give an idea of what you could get back in rentals if you estimate 50%. Equally I doubt you would get many rentals outside of summer on the north coast, but that may suit you if you are looking to live 6 months yourself there!

Thanks Filbert. The web site you mentioned was great and gave me several things to think about. While you are right about the housing prices being very high right now, I am hopeful that there will be some downward swings in the market at some time. Since I am not looking to retire for several more years (unless I hit the lottery!!) time is on my side with this idea. You have inspired me, though to start thinking about buying a place soon and renting it out until I am ready to move in. Now I have to look into the questions of property ownership, taxes, residency, etc ... Thanks again and happy new year!

Hello Quevedo , I can tell you that the price of a 2 bedrooms apartament ( new) in east Madrid ( Middle clase zone) is about 250 thousand euros ( about 300 thousand dollars).

But in the other hand if you wanna rent it you can earn arround 1000 dollars month for it.

Saludos , and happy new year.

I may be wrong, but I believe you expect too much of the rent price. i don't think it'll reach that much. I have seen prices around 700 or 800 €, and I have scarcely seen 1000, as vell as I have from time to time seen under 600 provided the owner is also wanting somebody who cares about the flat, won't be problematic, or/and agrees to keep the income away from Tax Agency knowledge.

Ignacio :

800 Euros = 1000 Dollars right now.

And I can tell you ( cause I.m one of the few young spaniards "INDEPENDIZADOS" that renting is VERY, VERY , VERY ,HIGH IN MADRID and is difficult to see a 2 bedrooms flat for less than 600 E ( very difficult).

I recommend you this article , writted by Jhon Carlin for The Observer.
Sorry is in spanish cause is a translation made by Diario Clarin:
http://old.clarin.com/diario/2003/09/28/i-631322.htm

Hola Quevedo, I too have similar hopes, but like Ignacio and Pippo have said, the Big cities like Madrid are expensive. Unless you are willing to look at the smaller towns around Madrid, I believe that ESPE3 did that and got a piso at a reasonable price.

I have decided against the big cities like Madrid as a homestead, because I am looking for a more bucolic setting for my retirement. I am looking at the smaller pueblos in Galicia and Asturias, Leon, Extremadura, Andalucia, etc.

Last Spring my youngest uncle, who is also interested in retiring there, went to our cousin's wedding in Aviles and he did some research, and he found that it is possible to find a small 2/1 piso for $40,000 dollars, or better yet, to build one according to your own specifications. He purchased a lot near the family farm for $10,000,near a road and with a lovely view. When he retires in two years he will go back and build his piso. But of course Aviles is not Madrid, but it is a very nice town, from what he tells me.

He was particularly impressed by the Spanish Medical system. That is a question that I would like answered are there any ways that residents from other countries can buy medical insturance in Spain? Does anyone know?

Pippo:

I understood 1000 €, no 1000 $. Sorry. Although in my neighbourhood (Saconia) a couple who are friends of mine rented one under 600 (two rooms), not too old (10 or 20 years), convenient, ... I believe the owner thought of the care of the flat (they look like - and are- the kind of people who are responsible) , and the fact that they were solvent.

Many owners do not declare the income to Hacienda (tax agency) so those who rent the flat are sometimes in a strong position if they are really bad guys. So, in some cases I have heard of renters who don't pay and won't leave, so you have to take them to court, and it's pretty difficult to make them leave, and these situations sometimes lead to a flat that is like a battlefield when they leave, once I saw a flat where they had burnt the floor (parquet) on leaving, and scratched the paint, ...

So, a person who pays on time, whose work is secure, who won't give problems, is preferred and sometimes pays less.

Booklady:

Avilés is a small town, that is not pretty (to me). I'd prefer many other towns in Asturias (except for miners' villages like Infiesto), if you are not living in Oviedo or Gijón.

BTW, the prices he tells you about seem very low, I believe. My dad has just made a (big, but not that big) house, in Burgos, and, being the land his, he still had to pay over 115.000 €.

As for the Health system, Is he inmpressed because it's good or bad? It used to be very good, but now, it's horrible in some aspects (when you need something else than first aid or a generalist doctor).

Hola Ignacio,

Well, to me Aviles would be pretty for sentimental reasons, since my abuelo was born there. The photographs that my uncle took showed a very nice town, about the size of its sister city, here, St. Augustine, Florida. Of course, this is very subjective, as you said. Yes, I am sure there are prettier cities in Asturias. My Mother was born in Ribadesella in the Atlantic Coast and that is a very pretty beach town, but I am sure the cost of housing would be more dear there.

Here are a couple of photos that I borrowed from the net about Aviles,
Here is a view that I like of Calle Ferreira leading to the Plaza .

About the costs quoted to my uncle, I believe that my uncle will have our cousins help him build his home. One is an albañil (builder) so perhaps that is where the cost may be a bit less, and his son is an architect, so that will help as well with the costs. But I think the savings will be because he is building a very small house.

Regarding the medical system, my uncle was positively impressed about the way the hospital treated my aunt,who had a heart attack while in Aviles. He said the hospital staff was very efficient and professional. Also the cost was very reasonable, he was impressed about that too.

Well, yes. Sentimental reasons are Very important. I like those photos and, if I recall well, the first one is in the street of the bars and disco-bars, that's animated at night besides of being nice by day, and that get's WILD in Carnival.

There are also other uglier remains of its industrial past, in the town. But if you feel like it, and you have lands or some kind of advantage, go ahead!

Ignacio, one thing I forgot to ask is what about impuestos/taxes on property in Spain. Does Hacienda tax homeowners for their property? Do you happen to know?

Gracias,
Carmen

Taxes:

On buying you pay 7% VAT tax. Including other expenses, you come to pay about 10% over the inicial property price. If you are given the property or inherit it you pay a similar amount.

You should theoretically pay a small tax on property throughout the following years, for the amount of the value of the property that's over the designated amount. When I last checked it was 25.000.000 ptas or so ( 150.000 €). However nobody does unless the property is worth much more than that, 'cause the tax agency doesn't care much (as I said the tax is small. Name: Impuesto sobre el Patrimonio).

If you are buying it with a loan, however, you get a refund of taxes depending on the money you pay yearly (with certain limits, max. depending on wether a person or two own it).

Yep things are getting more expensive in spain. The south is much cheaper. I saw a report on the BBC news where they interviewed two people from barcelona. They said that it is hard for people from barcelona to find places to live there. The report said that many northern europeans are moving to Barcelona, which is driving up prices.

Ignacio , people need now to rent a flat in Madrid , not only NOMINA but a lot of times BANKING GUARANTY , ( you can see in the adversiments: " Pedimos aval bancario), with this to ellements is almost impossible to be hooked by the man that want live in the flat renting it.

Banking guaranty.

First: It's asked for only if you don't have a Nómina (if you aren't in a Payroll).

Second: The guarantee does not guarantee all the possible monthly payments until you leave. Many contracts are for a year but follow on up to 5 years (by law the tenant can decide by himself if he wants to go on with a rise according to the general prices index - IPC).

Third: That guarantee is acquired by paying an amount to the bank. You ay leave and the bank would be the only responsible. That's why banks charge more for the service: their profit plus an amoun to compensate the losses for those guarantees not honoured by tenants. Precisely the tenants that need guarantees are the less solvent.

Fourth: That guarantee uses to cover some (or sometimes all) the monthly fees, but it does not use to cover damages by hooliganism of the tenants.


Fourth

JUST IN CASE...

For those who have questions about retirement and Social security payments (being paid in Spain that is), go to:

{fROM A PRIVATE MSG TO ANOTHER MEMBER]

"Here is the site that has the official info. http://www.ssa.gov/ I looked at it and it seems pretty decent. The subsite that may help more is:
http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/php/enduser/std_alp.php?sub_category_menus=%7Eany%7E&p_cat_lvl2=%7Eany%7E&p_lva=&p_li=&required=qcat&p_page=1&p_new_search=1&_dflt_sub_c ategory=%7Eany%7E&p_cat_lvl1=24&go=Go

If you cannot get it, it is called international issues within the Social Security.gov site.

Juan.-

About having tenants and the problems spanish owners have to take them out of their property in case that they don't pay (up to two years litiges):

Link (spanish only, Sorry!)