Rising Interest: American expats find a new home in Spain

According to a recent Spanish government report, the number of Americans living in Spain has surged by 13% between 2019 and 2021. Among foreign residents, American expats stand out as the second-largest group paying premium prices for living spaces per square metre, trailing only the Danes.

The allure of Spain has drawn an increasing number of Americans seeking a change of scenery. Many are opting for longer stays, whether as digital nomads embracing remote work opportunities or retirees looking to savour a vibrant Mediterranean lifestyle.

Recent data from the General Council of Notaries in Spain indicates a remarkable 88% increase in home sales to Americans from the first half of 2019 to the first half of 2022. Alongside this growth, American buyers have been observed to pay significantly higher prices, with an average of 2,837 euros (approximately $3,119) per square metre. These buyers have also contributed to a notable rise in home prices during the same period.

However, purchasing or living in a home abroad entails considering various financial aspects. For instance, property taxes in Europe differ significantly from those in the United States. Instead of annual payments, Spain requires most taxes to be paid upfront in the form of stamp duty, accompanied by value-added tax or transfer tax for pre-owned homes.

To navigate the intricacies of the Spanish property market, experts recommend engaging with local estate agents and property lawyers early in the process. For those planning to retire in Spain, understanding the financial and tax implications is crucial, and seeking advice from a qualified advisor is advisable.

Moreover, American expats should carefully manage their tax liabilities, as they may face taxation on global income in both Spain and the U.S. Nevertheless, careful planning and understanding deductions can mitigate the impact of double taxation.

It is essential for expats to remember that their financial obligations in the U.S. continue even after moving abroad. Properly managing debts and maintaining an American bank account tied to a U.S. address can facilitate seamless bill payments and currency exchanges.

For those looking to relocate, Spain offers various visa options, including the recently introduced digital nomad visa tailored for international teleworkers. Additionally, the golden visa provides unique advantages for those investing in properties above a certain value, granting the right to live, work, and enjoy additional benefits in Spain.

As more Americans explore the prospect of living in Spain, it is crucial to approach the transition with careful planning and comprehensive research to ensure a smooth and rewarding experience.