Are you thinking about retiring to Spain? Use this practical tax guide for New Zealanders thinking about moving to Spain permanently (Option A) — plus the “less than 6 months a year” alternative (Option B). Get a short worked tax example using NZD $50,000 gross income as an example, with the immediate steps, documents and pitfalls to understand.
Table of Contents
Retiring to Spain: Quick overview — the residency rule that matters
- Spanish tax residency = worldwide tax: if you are a tax resident in Spain (generally >183 days in the calendar year, or your centre of vital/economic interests is in Spain) you must declare worldwide income — that includes pensions or annuities paid from New Zealand. (Agencia Tributaria)
- Spain and New Zealand have a Double Taxation Agreement (DTA) which allocates taxing rights and lets Spain give a credit for tax you actually paid in New Zealand (so you won’t normally pay the full tax twice). But how much credit you get depends on both the treaty and domestic rules, and on whether New Zealand actually taxed that income. (Hacienda)
Important practical items before we go into options
- Exchange rate used in examples: ECB euro reference rate (EUR 1 = NZD 2.0119 on 29 Oct 2025). Use this to convert NZD → EUR for Spanish tax calculations below. (European Central Bank)
- IRPF (Spanish personal income tax) is progressive and split between state + autonomous community — final rates vary by region, so the example below is illustrative (it uses typical combined/trending rates; your Comunidad Autónoma can change the final bill). Always check the regional table. (PwC Tax Summaries)
- Modelo 720 (foreign assets): if you are a Spanish tax resident and you hold foreign assets (bank accounts, investments, property, company holdings) over €50,000, you must file Modelo 720 (informative) — penalties are strict for mistakes/omissions. (Agencia Tributaria)
Option A — You live in Spain permanently (you are a Spanish tax resident)
1) Immigration / residency you’ll likely use
Most retirees use the non-lucrative residence visa / permit (you cannot work in Spain under it). You must show sufficient means (in 2025 this normally means ≈€28,800 a year for the main applicant — 400% of the IPREM — and private health insurance, police certificate, proof of accommodation, etc.). Start with your Spanish consulate’s checklist. (Ministerio de Asuntos Exteriores)
Once you have declared your income in NZ, expect to pay about 7-10% additional income tax to Spain.
2) Retiring to Spain – Tax picture (short)
- As a Spanish tax resident you declare your NZD 50,000 as worldwide income on the annual IRPF return (Modelo 100).
- If the same income is taxed in NZ you will normally claim a foreign tax credit in Spain (DTA + Spanish law) up to the Spanish tax attributable to that income. If the NZ payment is not taxed in New Zealand (some NZ social security/pension rules can give exemptions or portability — see below), Spain will tax the full amount on your IRPF return. (Hacienda)
3) Worked example (illustrative) — NZD 50,000 gross (single pensioner, no other income)
- Convert NZD → EUR using ECB rate (EUR 1 = NZD 2.0119):
NZD 50,000 ÷ 2.0119 = €24,852 (approx). (European Central Bank) - Using a typical progressive Spanish scale for illustration (remember: regional differences apply), the Spanish tax on €24,852 might be roughly €5,600 (this is illustrative — see caveats below). (PwC Tax Summaries)
- Scenario A1 — NZ pension is taxed in New Zealand: assume you already paid ~NZD 7,850 (~€3,900). Spain would generally allow a foreign tax credit up to the Spanish tax attributable to the same income. That would leave an additional Spanish tax to pay of roughly €1,700 in this worked example — i.e., you don’t pay double tax, you pay the higher (Spanish) tax, with credit for taxes already paid in NZ. (Numbers rounded for clarity.) (Hacienda)
- Scenario A2 — NZ pension is not taxed in New Zealand (or NZ stops paying tax on that pension for residents abroad): then Spain taxes the full €24,852 and you would pay the ~€5,600 Spanish tax (no NZ tax credit to offset). That’s why it’s crucial to know whether NZ taxed your specific pension while you live in Spain. (taxtechnical.ird.govt.nz)
Bottom line for Option A: as a Spanish resident your NZD 50k is taxable in Spain. Whether you pay a lot in Spain or less depends on (A) whether NZ taxed the pension (credit available), (B) exact IRPF rates in your autonomous community, and (C) classification of the income (social-security pension vs private annuity can be treated differently).
4) Healthcare and social security
- The non-lucrative visa requires private health insurance at the outset. Access to the Spanish public healthcare system later depends on your residency status and whether you contribute to/socially insure in Spain or benefit under a social-security agreement. Spain and New Zealand have arrangements covering reciprocal benefits and pension matters — check the details early (how NZ Super behaves, whether you keep entitlement, and how the bilateral agreement applies). (Ministerio de Asuntos Exteriores)
5) Practical checklist (Option A)
- Apply for the non-lucrative visa (or other appropriate residency route). Gather: passport, criminal record certificate, private health insurance, proof of income/assets (pension statements, bank statements), proof of accommodation. (Inclusion)
- Obtain IRD / Work & Income confirmation about NZ Super (if applicable) and whether NZ tax is (or will be) applied when you live in Spain. (govt.nz)
- Get NZ tax certificates / pension statements showing tax paid (if any) to support a Spanish foreign-tax-credit claim. (Hacienda)
- If your foreign assets exceed €50,000, plan to file Modelo 720 and keep records. (Agencia Tributaria)
Option B — You spend less than 6 months a year in Spain (you are not a Spanish tax resident)
1) Tax consequences
- If you are not a Spanish tax resident (i.e., you spend <183 days and your centre of economic and vital interests is outside Spain), Spain generally taxes only Spanish-source income. Your NZ pension or annuity that is paid from NZ to an overseas person will normally not be taxed in Spain if you are non-resident — but Spain could tax certain Spanish-source items (e.g., rental income from a Spanish property, Spanish bank interest paid with Spanish withholding rules). Keep good records of days and ties to prove non-residency if needed. (Agencia Tributaria)
- Important trap: “Days” aren’t the only test — if your spouse/children live in Spain or you have your main economic interests here the tax authority could still say you’re resident. Keep boarding passes, travel records, rental agreements, tax residency certificates from NZ etc. to substantiate your position. (Agencia Tributaria)
2) Immigration / visa practicalities
- Short stay visitors (tourist stays) are different to legal residency. If you plan to sleep >183 days you must use a residency route (see Option A). If you spend <183 days you avoid Spanish tax residency, but you also won’t get residency-linked benefits such as long-term public healthcare access. Tourist/short-stay rules (Schengen limit, visa waivers) also matter for non-EU nationals; NZ passport holders can visit Schengen for up to 90 days in any 180-day period visa-free — so if you’re spending more than that in Spain each year you must use a residency permit. (Don’t confuse the 90/180 Schengen rule with the 183-day tax rule.) (Ministerio de Asuntos Exteriores)
3) Practical checklist (Option B)
- Keep a robust audit trail of days spent in each country (boarding passes, passport stamps, accommodation receipts). (Agencia Tributaria)
- Get formal tax residency evidence from New Zealand if needed (a certificate of tax residence) — this helps if Spanish authorities question your claim not to be resident. (taxpolicy.ird.govt.nz)
- If you have Spanish-source income (property, pensions paid in Spain, bank interest in Spain) get local advice — non-resident rules and withholding rates apply.
Final tips and next steps (practical)
- Do these three things immediately: (a) confirm whether your NZ pension (NZ Super or private pension) will continue when you move and whether NZ will tax it while you live in Spain (contact Work & Income / IRD); (b) get recent pension/payment certificates and NZ tax paid certificates; (c) decide which visa you’ll use (non-lucrative is the typical retiree route). (govt.nz)
- Run your own worked numbers for your autonomous community. The example above is illustrative — your Comunidad Autónoma can change the IRPF bill by several hundred euros a year. Use a local tax calculator or ask a Spanish asesor. (PwC Tax Summaries)
- If your foreign assets exceed €50k, prepare to file Modelo 720 by the 31 March deadline for the previous tax year and keep records — mistakes are costly. (Agencia Tributaria)
- Get a Spanish-qualified asesor — cross-border retirement has many small traps (social-security/tax interaction, NZ Super portability, Modelo 720, residency ties). A short paid consult will very often pay for itself.
- https://kiwisinspain.es/english-speaking-spain-immigration-lawyers/
Short checklist you can copy/paste to an advisor
- I’m a NZ citizen planning to retire to Spain (or spending <183 days — circle one).
- Annual NZ income: NZD 50,000 (source: specify NZ Super / private pension / annuity).
- Please confirm (1) whether I’ll be a Spanish tax resident under current rules; (2) if I’m resident, what IRPF I will pay after foreign tax credits assuming New Zealand taxes the pension; (3) whether my NZ pension is taxable by NZ once I move; (4) whether I’ll need to file Modelo 720 given my assets (I expect X in foreign bank accounts). Documents attached: passport, NZ pension letter, last NZ tax return, bank statements. (Agencia Tributaria)
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