Gecko Towers
Freedom of Movement – one of the core tenets of the European Union – is a brilliant concept designed for European integration, co-operation and development. The UK took a decision in 2016 – that’s ten years next year – and voted to leave the EU. A disaster that the current labour Government is now seeking to reevaluate the UK’s relationship with Europe and gradually they will form closer ties. However, for those from the UK seeking to settle on the Costa del Sol is not as easy as it was.
This position is also that endured by our friends from the USA, Canada and from pretty much anywhere else that is not one of the 27 states of the EU or the European Economic Area (a free trade area comprising the members of the EU plus Iceland, Liechtenstein, Norway and tangentially, Switzerland).
So aside from identifying a parent or grandparent that hails from a members state of the EU and seeking a passport from that country (provided they offer such a benefit) the most viable alternative for those keen to live on the Costa del Sol is to secure a Spanish Non-Lucrative Visa (NLV)
Designed for non-EU citizens who wish to live long-term in Spain without working or conducting business activities, it’s a residence visa rather than a work permit and is ideal for those who can support themselves financially through passive or non-Spanish income sources.
Who is an NLV right for?
Retirees or Early Retirees: People who want to enjoy Spain’s climate, lifestyle, and healthcare system without needing to work. Typical applicants are retirees with pensions, investment income, or savings. It offers a path to permanent residency and eventually citizenship.
Remote or Online Workers (with abundant caution): Those with income from outside Spain — for example, freelance writers, consultants, or business owners whose clients are abroad. Officially, you cannot work for Spanish clients or run a business based in Spain, but we are told that remote income from foreign sources is often accepted as long as you don’t engage in any Spanish economic activity.
Investors, Property Owners, and Financially Independent Individuals: People with sufficient savings, rental income, dividends, or other passive income streams. Owning property in Spain helps but is not required. The key is to demonstrate stable, regular income that exceeds the government threshold (approx. €30,000 per year for the main applicant, plus around €7,500 for each dependent).
Families Seeking a Spanish Lifestyle: Families wishing to live in Spain for quality of life, education, or integration reasons, without needing to work locally. The NLV covers dependents (spouse and children). Children can, we understand, attend Spanish schools. After five years, the family can apply for permanent residence.
Those Planning Future Residency or Citizenship: Applicants who see Spain as a long-term base. The visa allows for annual renewal (then every two years). After five years of continuous residence, one can apply for permanent residency, and after ten years, citizenship (subject to conditions).
Conversely who is it Not Right For? Anyone planning to work in Spain or run a Spanish business. Those who cannot show stable passive income. People who want to spend less than 183 days a year in Spain – and the prospect of becoming a Spanish Tax resident and needing to declare on worldwide income (as it requires effective residence).
If you are considering applying for an NLV – which usually needs to be processed at the Spanish Consulate in your home country before your arrival in Spain – I have recently read various online comments regarding securing Tax Residency in Spain. It seems there may be a risk, particularly if you come from the US, that it could prove more costly to foot the bill in Spain than the tax due if you continue to reside in the US.
Clearly one size has never fits all and tax considerations are no exception to this general rule. So I cannot emphasize enough the need to secure unequivocal tax advice tailored to your personal circumstances from an export in Spanish tax practice. However, in general terms, I wanted to consider two distinct cases of a tax payer from the US (California) and the UK (Bristol) to best demonstrate the impact of Spanish tax residency.
I have sought to extract as much verifiable data as possible to come up with the following considerations:
What are the Key Financial Requirements for an NLV application? (2025 figures): You must be able to show stable passive income or savings, of roughly €30,000/year (≈ $32,000 USD) for the main applicant and +€7,500/year (≈ $8,000 USD) for each dependent. Accepted income sources typically include: Pensions or annuities; Investment or dividend income; Rental income (from U.S. or abroad) and Savings or portfolio withdrawals (if substantial and consistent). Usually, you will be required to have an acceptable private health package for you and your dependents, but it is understood that, generally, health cover is more economical in Europe.
For the purposes of a Non-Lucrative Visa is it cheaper to be taxed on worldwide income to live in California or Andalucia?
It should be born that in Andalucía, once you become tax resident, you are taxed on your worldwide income, no matter where you hail from. In California (USA) if you are resident, you’re subject to US federal tax on worldwide income, and California state tax on your taxable income while a resident.
Comparison of Rates:
Andalucía – For general income (employment, pension, rental etc) the 2025 rates: up to ~€12,450 ~19%; €12,450–€20,200 ~24%; €20,200–€35,200 ~30%; €35,200–€60,000 ~37%; €60,000–€300,000 ~45%; over €300,000 ~47%.
California (USA) – State income tax: progressive from 1% up to 12.3% for high income (state only) in 2024-25. Plus the US federal rate up to 37% for high income.
Which is cheaper (for income)? :
If you become tax resident in Andalucía and have worldwide income, you will pay Spanish income tax at the rates above.
If you remain resident in California, you would pay US federal tax + California state tax on worldwide income.
For many moderate-to-high incomes, the combined US federal + California tax rate may exceed the Spanish rate you would face in Andalucía, especially for income in the mid-to-upper brackets.
Therefor, for many people, tax on worldwide income will likely be lower (or at least competitive) in Andalucía compared to staying resident in California — but whether it’s “cheaper” depends heavily on your income amount, composition (employment vs investment income), deductions, tax treaty credits, etc.
Some really important caveats:
“Worldwide income” in Spain means all sources, including foreign investments, pensions, etc. You must factor Spanish taxation on those. In the US you have to consider federal + state + potential local taxes, and US citizens/residents file worldwide income regardless of where they live. Being resident in Spain may also change your US tax obligations (you still must file US returns if you are a US citizen or green-card holder). The calculation ignores other taxes (wealth tax, inheritance tax, social security), and ignores benefits from tax treaties and foreign tax credits.Tax rates given are for “general income” in Spain; investment income (savings, dividends) are taxed under separate “savings” rates in Spain.
For the purposes of a Non-Lucrative Visa is it cheaper to be taxed on worldwide income to live in Bristol or Andalucia?
Here are the main tax rate comparisons that give a view on which is likely cheaper (for income) — with the strong caveat: actual outcome depends heavily on amount & nature of income, deductions, domicile/residence status, double-tax treaties, etc.
Tax rate comparison — see above for Andalucia – key figures
UK (England): Personal allowance: £12,570 no tax. Income tax bands 2025-26:
£12,571–£50,270 → 20% basic rate.
£50,271–£125,140 → 40% higher rate.
Over £125,140 → 45% additional rate.
Which is likely cheaper for “worldwide income”? If you are comparing being tax-resident in Andalucía vs being tax-resident in the UK (England), broadly: For lower to moderate incomes, the Spanish rates (19-37%) for many brackets are competitive or may be lower than the UK’s combined implication (20%+ for basic, then 40% for higher). For higher incomes (say €60,000+ or corresponding in £), the Spanish 45%/47% rates are comparable to UK’s 40%/45%, meaning they might end up similar or the UK might become slightly cheaper depending on allowances and specific income composition. The UK benefit: personal allowance, and if income is under that threshold or modest, you may pay zero or low tax up to the allowance. Spain obviously also has allowances/deductions but the lowest full rate begins at ~19%.The exact “cheaper” outcome depends on currency conversion, income type (dividends vs salary vs rental), allowances/deductions, whether you are fully tax resident, and how the “worldwide income” is defined and taxed in each jurisdiction.
Conclusion: Since a Non-Lucrative Visa in Spain implies you plan to reside in Andalucía, if you become tax-resident there: Andalucía is very attractive for many moderate to upper-middle incomes: you’ll likely face rates like 19-37% for general income up to €60k, which may be cheaper than UK for many in that range. If your income is much higher (let’s say €200k+), Spain will tax at 45% or up to 47%, so the advantage narrows and UK may become as good or better depending on your UK residence/domicile status and allowances. If you instead considered living in the UK while having “worldwide income”, the UK’s allowance plus its band structure gives you a strong base, especially for modest incomes, but you lack the Spanish lower‐rate advantage at the very lowest bracket (Spain’s 19% starts earlier). Also, cost of living, healthcare, lifestyle differences may shift the “effective after tax” value significantly.
For many people seeking a Non-Lucrative Visa and intending to live in Andalucía, the tax on worldwide income is likely to be cheaper or at least very competitive compared with relocating to the UK for the same income level — especially if your income falls under the €60k or so bracket, and you’re comfortable being tax-resident in Spain. However, if your income is high (well above €100k) or you have complex investment income, the gap may narrow and the UK might offer a marginally better outcome so a detailed personal calculation is essential.
Please subscribe to the www.marbellapropertylawyers.com blog by adding your e-mail below.
Should you be interested in discussing the process involved in buying a property on the Costa del Sol, we would be delighted to assist you. We have an experience-qualified and best of breed Associates Network comprising professionals focused on the western Costa del Sol (Malaga to Tarifa) property market. Their services include property search, mortgages, legal and tax services, visas, surveying, insurance and currency brokerage.
We have done the leg work, testing the quality of our Associates Network and now feel confident in recommending their services to you.
Please note that our posts are for general interest. There is no substitute for proper advice tailored to your specific circumstances as provided by a qualified Abogado who is experienced in the application of the Spanish Law. Nothing contained in this article should be seen or taken as legal, tax or financial advice and cannot be relied upon as such. Neither the writer nor the publisher accepts any responsibility for liabilities arising as a result of reliance upon the information given. All details have been reasonably fact-checked and all efforts have been taken to ensure that facts are accurate as at the date of publication.
You may also be interested to join and share in the FaceBook Group “Costa del Sol – The Best Place to Live in Europe” – please click this link – Costa del Sol – The Best Place To Live In Europe
My details: Mark FR Wilkins, during usual business hours on +34 600 343 917 or e-mail me at mark@therightsgroup.com
© Mark FR Wilkins 2025. All rights reserved.