Cost of Living in Spain
While the cost of living in Spain has markedly increased over the years, the average Spanish salary has not - thus making life more difficult for the Spanish and those expats who choose to live in Spain. Furthermore, the economy of Spain is now deeply troubled, with unemployment rates reaching a record 25 percent in 2012. However, Spain’s largest urban centres are still far less expensive than many popular European destinations, like Paris, Geneva and London. In fact, according to the 2011 Mercer Cost of Living survey, Madrid and Barcelona were more closely on par with many African and Middle Eastern capitals and commercial hubs, having ranked 60 and 66, respectively, out of 214 cities.
Furthermore, Spain provides a seductively fine quality of life. The country is vast, of course, and varies enormously (culturally, climatically and economically) from region to region. However, common to most of Spain is: a benign overall climate, a tolerant and welcoming nuclear society, a decent infrastructure and political stability (after 36 years of sustained democracy).
Certainly, Spain still represents terrific value for most foreigners from developed countries who are either retired or earning North European/US salaries. For these expats, a very high quality of life is available for the current cost of living.
Cost of accommodation in Spain
During the latter years of the Spanish property boom, housing in Spain became absurdly expensive both to purchase and rent. This has change radically and now Spanish housing offers good value for money.
Of course, in such a huge country accommodation costs vary massively with there being little relationship between the centre of Madrid, for example, and inland areas away from the coast. However, crudely (inland cities excepted) prices rise the closer a property is to the coast, and this is particularly true of the Mediterranean coastline. This trend is due to a passion for the beaches of Spain, a love which is shared by the Spanish and foreigners alike (over 50 million tourists visit Spain annually).
In 2011, depending upon location, it is possible to buy the following property types at the following prices:
- Brand new, 3-bedroom apartments (pisos) in a provincial town for around EUR 100,000
- A town house (adosado) for around EUR 150,000 to 200,000
- A 3-bedroom villa (chalets) with a pool for around EUR 250,000.
Needless to say, the sky is the limit for high quality properties in prestigious locations, and there are also some exceptional bargains that boast much lower prices than those listed above.
Short term summer rents for any coastal property can be very expensive with villas costing anywhere from EUR 750 to 1,000 (or more) per week. However, long term lets are more reasonable.
Long-term let sample prices:
State primary and secondary schooling is compulsory until age 16, when the option exists to leave school altogether or study for the Bachillerato (success in which leads to access to the university system). Alternatively, students can pass into the Ciclos Formativo system to undertake two- and four-year vocational training.
It is free for expats to send their children to state schools in Spain, as long as you've registered for your Empadronamiento at your local town hall.
Cost of food and clothing in Spain
Taxes in Spain
- In a provincial area a 3-bedroom flat may cost EUR 350 to 450 per month
- A town house may cost around EUR 500 to 600 per month
- A 3-bedroom villa may cost approximately EUR 800+ per month – however everything depends upon the exact location and type of property with prices varying wildly.
Transport costs in Spain
Public transport in Spain is generally cheap with coaches (buses) being an excellent, low-cost way of travelling around the country. Meanwhile, the rail network provides good value for money. Spain is also second only to China in the distance covered by its high-speed AVE network. Although more expensive than normal trains, the AVE does mean that travel between different parts of the country can be undertaken very quickly.
Spain also has a well-developed network of airports in place to service the requirements of the substantial number of holidaymakers who visit the country. However, the number of flights and their accompanying prices varies depending upon the tourist season.
Cost of schooling in Spain
State primary and secondary schooling is compulsory until age 16, when the option exists to leave school altogether or study for the Bachillerato (success in which leads to access to the university system). Alternatively, students can pass into the Ciclos Formativo system to undertake two- and four-year vocational training.
It is free for expats to send their children to state schools in Spain, as long as you've registered for your Empadronamiento at your local town hall.
Most schooling is taught in Spanish, but in some areas, such as Catalonia and Valencia, primary schooling is taught in the local language (Catalan or Valenciano). This can be awkward for foreign students who often prefer to be taught in only one language (Spanish), rather than having to learn two (the regional language and Spanish) at the same time.
Private schooling is available with fees varying greatly depending upon the school concerned, its location and the language and curriculum taught. So, an English-language private school in the centre of Madrid will generally be more expensive than a Spanish-language private school in the provinces. The latter will charge somewhere around 400 to 500 EUR a month, depending also upon the age of the pupil concerned, while the former could charge as much as 25,000 USD per year.
Cost of food and clothing in Spain
Oddly enough, the cost of supermarket food equates with prices found in a country like the UK, and is therefore surprisingly expensive in comparison to the wage levels of the Spanish themselves. However, the inverse it true when eating out, a pursuit which can be of tremendous value. A three-course lunchtime menu of the day (menu del dia) with a drink can be as little as 8 to 9 EUR. Similarly, alcoholic drink is cheap, which is not too surprising given the vast quantities of wine produced by Spain.
Clothing is quite expensive in comparison to somewhere like the UK. It is hard to understand why this is the case; although, it may have something to do with the Spanish reticence to slash costs to the minimum to preserve business. That said, there are certainly more than a few options in which expats can find reasonably priced, stylish clothes, like in Zara or H&M.
Taxes in Spain
Taxes are as complicated in Spain as anywhere else in the world, and require the attention of an expert advisor (asesor fiscal or gestor). However, the monthly fee payable to the state by someone self-employed is around 300 EUR – which covers health, schooling, a pension, etc.
Otherwise, expat tax residents working for a formal employer in Spain will be subject to a progressive tax rate no higher than 45 percent, depending on their income.
Incidentally, to start a simple limited company is also costly and a somewhat slow process. Furthermore, businessman should be wary of offering full-time contracts to employees as these can also be expensive and overly protectionist, although recent legislation has attempted to make relax the worst affects for an employer. Many people in Spain work on temporary contracts although these are time limited.
