Early retirement abroad.

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Bigaitchc
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Early retirement abroad.

Postby Bigaitchc » Wed Dec 30, 2015 12:43 pm

Hello from a very blowy UK, this is my first post (thank you for allowing me to join the forums) and forgive me if the answers lie elsewhere - happy to be pointed to the right place if the info is elsewhere.
My name is Heather, I am taking early retirement from the education sector in July, my husband is a long serving policeman and is retiring in April. I will be 55, he will be 51.
It has been a long term dream to own a home in Spain and live there, while also having (on the same footprint) a small casita that we could rent out. We have been over many times and have settled on the area inland around Malaga as our preferred spot.
So, we sold our house in the UK earlier this year (in readiness) we are now in a rental.
We will have both have good pensions and a lump su and will hopefully use this to buy somewhere. So some questions:
1. Do we try and buy asap, or do we rent long term to try it out?
2. We think (due to recent rule changes) our pensions have to be paid into a UK bank and taxed here, so how do we get our money to Spain each month without incurring charges etc
3. As we are under 60 we cannot use the national health service in Spain if we become residents, so what cover would we need and what cost?
4. We already own a small piece of land in Biar, Alicante, so have held NIE numbers and have Spanish wills. Do we need anything else pre arrival.

Although exciting, this is also a bit scary, and we notice that many of the properties for sale are people wanting to move back to the UK..... is this what happens a lot?

I expect I have forgotten loads and sound like so many others who want to 'live the dream', but my husband was obviously born on the wrong continent - depressed through the winter, horrific hay fever all summer, so this for us is a need to do really.

Any help greatly appreciated, any websites that would prove useful, any advice....

Thank you so much, Happy New Year

:wave:
Now living in our own Spanish home and loving it.

Free at Last
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Re: Early retirement abroad.

Postby Free at Last » Wed Dec 30, 2015 1:13 pm

Welcome to the forum. My husband and I did what you are contemplating just over 9 years ago and have never regretted it.

Buying vs renting is very much a personal choice. We bought our house and used it as a holiday home initially for a few years whilst we were still working before moving over permanently, but many people advise renting first to make sure that the area is right for you.

It is easy to transfer funds from your UK account to your Spanish one without much cost if you use a currency exchange firm rather than your UK bank. I use Currency Fair who charge a flat fee of €3 per standard transfer (and the money is always in my Spanish account within 24 hours) and give good exchange rates, another often recommended firm is Transferwise who charge 0.5% of the amount transferred.

As you are below retirement age you would need private health insurance. If you intend to live in Málaga province, Prevision Medica are a very good company (we have been with them for 7 years now and find them very good). We will be paying €120 per month for the two of us from the beginning of January, but I believe cheaper premiums are now on offer for new customers.

http://www.previsionmedica.com

After you have been registered as residents in Spain for a minimum of one year you can, if you wish, avail yourselves of state healthcare by paying in via the Convenio Especial, that costs €60 per person per month for those aged under 65.

Under the Convenio Especial you would have to pay 100% of the cost of any prescriptions, but most private health insurance policies do not cover the cost of medication (except that prescribed during a hospital stay) either.

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Bigaitchc
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Re: Early retirement abroad.

Postby Bigaitchc » Wed Dec 30, 2015 1:32 pm

Thank you very much that is brilliant, can I ask is there anything you wish you had done differently, with hindsight?
We won't really need the income from the rental but as I have been an organiser in my job for many years, I cannot see myself just doing nothing..... so wanted a small hobby, type business, website etc to run. I think this is the main reason we are leaning towards buying.
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Re: Early retirement abroad.

Postby Free at Last » Wed Dec 30, 2015 1:50 pm

I honestly can't think of anything. Of course we would rather the global financial crisis hadn't happened which meant that we were getting much lower interest on our savings than we'd anticipated (we were living off capital for the first 8 years we were here) and the exchange rate went down to almost parity at one stage, but that was beyond our control! Now that most of our pensions are in payment, we feel quite well off by comparison.

We preferred to buy our house, if you intend to do that I think the more research you do in advance the better, in order to make sure wherever you choose is right for you, and be very realistic about the practicalities of life in whatever location you want rather than being swayed by a lovely view. You are probably both fit and well now but rural life, in particular, can become much more difficult as you get older and less healthy. Rural life isn't always as quiet as people think it will be, either, mainly due to barking dogs as they are often left to guard campo properties which the owners only visit at weekends. We like living in a town with excellent public transport links and health facilities practically on the doorstep, but it wouldn't be for everybody.

Neither of us has missed work at all, and don't get bored although we haven't worked or run a business here.

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chrissiehope
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Re: Early retirement abroad.

Postby chrissiehope » Wed Dec 30, 2015 2:16 pm

Just a thought - you mentioned your husband gets terrible hay fever - a lot of people are allergic to olive pollen - the flowers are tiny, but the amount of pollen they produce is staggering ! Our casa is in an olive grove, and the car & terraces literally turn yellow... :thumbdown:
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Bigaitchc
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Re: Early retirement abroad.

Postby Bigaitchc » Wed Dec 30, 2015 2:39 pm

Hi Chrissie
Thank you for that, worth knowing :)
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costakid
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Re: Early retirement abroad.

Postby costakid » Wed Dec 30, 2015 5:49 pm

I suffer with Hayfever. We are on the coast and I have only had one bad dose around 3 years ago. I think that year people who had never had hay fever got it though.
My advice would be to rent for 6 months. I only say this as if you change your mind and decide the coast is for you selling inland properties can be harder than coastal.

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Bigaitchc
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Re: Early retirement abroad.

Postby Bigaitchc » Wed Dec 30, 2015 6:13 pm

Thank you, interestingly one of the big plus' for renting is also being able to take our time and visit as many properties as we want.
A couple of other things, what about dental costs?
And another concern is the possibility the UK may leave the EU - not sure if that would impact?

Big decisions ahead - but our attitude is we can just keep talking about it or do it and the biggest decision for me was actually handing my notice in and I've done that :)

Thank you for all the replies.
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Re: Early retirement abroad.

Postby Free at Last » Wed Dec 30, 2015 6:39 pm

Dental cover is usually available as an add-on with health insurance policies for a small additional monthly premium. We pay as we go and a check-up, clean and polish (we haven't needed anything else) costs €40.

As to what may happen should the UK vote to leave the EU, well nobody has a crystal ball so could not tell you how it might affect UK nationals living in other EU countries. My personal opinion is that for people who are not looking for work (so would not need permission to work in Spain) it would make no difference. Depending on what attitude the UK Government of the day takes I suppose they might rethink whether they are prepared to continue funding healthcare for UK pensioners in the EU. Although we now have state healthcare as my husband has reached pension age, we have kept our private health insurance on as well, just in case. The company we are with doesn't increase premiums when a policyholder reaches 65 as a lot of companies do, if they are prepared to continue providing cover at all.

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Re: Early retirement abroad.

Postby El Cid » Wed Dec 30, 2015 7:05 pm

Bigaitchc wrote:
And another concern is the possibility the UK may leave the EU - not sure if that would impact?


Who knows, as Free at Last says, but it is being discussed on this thread.

http://www.andalucia.com/forums/viewtopic.php?f=22&t=35600

Sid

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Bigaitchc
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Re: Early retirement abroad.

Postby Bigaitchc » Wed Dec 30, 2015 7:19 pm

Thank you, we have much to learn and think about :)
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peteroldracer
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Re: Early retirement abroad.

Postby peteroldracer » Wed Dec 30, 2015 11:23 pm

You say "our pensions have to be paid into a UK bank and taxed here, so how do we get our money to Spain each month without incurring charges etc".
Depending on where you mean by "here" - UK or Spain it may not be simple.
Once you have been in Spain for 183 days in a calendar year (strictly, the time starts when you leave the UK to travel here) you are classed as tax resident in Spain and must declare all income to the Spanish tax man. There are double-taxation agreements so you should not be taxed in both countries but you cannot choose where you are taxed. Please do not listen to the "clever bar accountants" who will tell you you do not need to declare earnings here...the tax people talk to each other. You should read the excellent guides on here, and talk to a good gestor who deals with expat client tax.
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Bigaitchc
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Re: Early retirement abroad.

Postby Bigaitchc » Wed Dec 30, 2015 11:39 pm

Hi Peter
Thank you for your reply. It is the Government in the UK who have stated in their info that any teacher / police pensions are taxed in the UK, apparently they are the only ones where there is no choice in the matter, I've been reading the gov.uk website for all I'm worth. I had heard about the double taxation rule so will look into that too. Not sure what a gestor is?
Best wishes
Heather
Now living in our own Spanish home and loving it.

El Cid
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Re: Early retirement abroad.

Postby El Cid » Wed Dec 30, 2015 11:42 pm

Peter, if you read the post again, I think you will see that the pensions referred to are UK government pensions ( teacher and policeman) and they are taxed in the UK.

Under the new taxation agreement they have to be declared in Spain, but are not directly taxed in Spain, the amount of these pensions can affect the rate of tax paid on other income that would be taxed in Spain.

Sid

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chrissiehope
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Re: Early retirement abroad.

Postby chrissiehope » Wed Dec 30, 2015 11:47 pm

A gestor (pronounced 'hestor') is a sort of Mr Fixit, somewhere between a lawyer & an accountant. A good one can guide you through the tangled nightmare that is Spanish bureaucracy; fill in tax returns; file VAT returns; sort out your UK driving licence to a Spanish one, and a whole lot more :D . Most Spaniards use them, but you will need one who is used to dealing with expats. Recommendation is the way to go, but it will depend on where you are based, so once you're settled on a location, post on here for recommendations :thumbup:
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Bigaitchc
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Re: Early retirement abroad.

Postby Bigaitchc » Wed Dec 30, 2015 11:51 pm

Hi Sid,
So my understanding would be that if we had a small casita that we could rent we would then be liable for tax on any income from that to the Spanish tax person - if we were fortunate enough to rent it out at all :)
Hi Chrissie, thank you that's really useful to know. This is an amazingly helpful forum.

It's amazing what we don't know, but actually as a life long learner / educator I'm happy to learn new things all the time.
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peteroldracer
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Re: Early retirement abroad.

Postby peteroldracer » Wed Dec 30, 2015 11:52 pm

My OH has a government pension (from Customs & Excise), taxed in the UK. The payments are sent by Capita straight to our Spanish bank account at a good exchange rate, and Cajamar do not charge anything to receive it. Up until now these pensions were never declared on a Spanish tax return but this changes for 2016. Read the FAQs on here, and consult experts. A gestor (pronounced 'hestor') is a particular Spanish person, not a lawyer (abogado) but qualified and specialising in a particular field of administration - some do car transfers, others tax, others property and so on. My advice is avoid lawyers wherever possible, but seek recommendations for a gestor in your area and your desired field.
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El Cid
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Re: Early retirement abroad.

Postby El Cid » Thu Dec 31, 2015 8:26 am

Bigaitchc wrote:
So my understanding would be that if we had a small casita that we could rent we would then be liable for tax on any income from that to the Spanish tax person - if we were fortunate enough to rent it out at all :)


That's correct, but if it is a long term let, rather than a holiday let, you only pay tax on about half the profit after deducting quite a few allowances etc.

Sid

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Re: Early retirement abroad.

Postby truebrit » Thu Dec 31, 2015 11:40 am

I can't really add anything, but, after 16 years here all I can advise is that you think more about your future years when deciding on a location, than you might have done in England. When we moved here we bought into the Spanish dream of a lovely old house in the campo. Within 14months we had moved into a village then after 2 and a half years we had moved into a town house. We realised that we were not going to get younger. We are happier than we ever were in the campo. Everything is at our fingertips. Where we live we are on the flat, no hills. Despite being in the town it is quiet. We have lovely Spanish neighbours. Sorry I digress. I think you must get the gist. Anyway good luck with your move and wishing health and happiness in your new life in Spain.

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Bigaitchc
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Re: Early retirement abroad.

Postby Bigaitchc » Thu Dec 31, 2015 11:51 am

Thank you, it is interesting as our first inclination has been out in the country with stunning views, but over the last few weeks we have been reviewing our thoughts as you say we hope to make this a permanent life change and so we need to consider 20yrs down the line, our key criteria are pool, view and possible small rentable annex but are moving more towards edge of town.
Now living in our own Spanish home and loving it.


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