Significant Changes Affecting Expats in Spain for 2025

As the year 2025 begins, several key changes are set to impact the lives of expats residing in Spain, ranging from pension reforms and cost of living adjustments to travel regulations and tax increases.

Pension Reforms and Increases

One of the most significant changes for expats who have contributed to the Spanish Social Security system is the upcoming pension reforms. Starting in 2025, the ordinary retirement age will increase by two months compared to 2024, meaning individuals will be able to retire at 66 years and 8 months if they have contributed less than 38 years and 3 months. However, those who have contributed for 38 years and 3 months or more will still be eligible to retire at 65 years old[2].

In addition to the changes in retirement age, contributory pensions will see an increase of 2.8% in 2025. Minimum pensions will also rise, with a 6% increase for most recipients and a 9.1% increase for those with a dependent spouse or widows with family responsibilities. This translates to a minimum retirement pension of 12,241.6 euros per year for single-person households, up from 11,552.8 euros in 2024[2].

Cost of Living Increases

The cost of living in Spain is expected to rise in several areas. One of the most notable changes is the return of Value Added Tax (VAT) on electricity to 21%, which could result in an additional €72 per year for a family consuming 250 kWh of electricity per month. VAT rates on basic food items such as bread, milk, eggs, and vegetables will also increase from 2% to 4% in January 2025. Products like pasta and seed oils will revert to a 10% VAT rate, except for olive oil, which will remain at 4% due to its classification as a basic necessity[3].

Additionally, a mandatory waste tax will be introduced in April 2025, estimated to cost households between 165 to 200 euros per year. Tobacco and vape liquid taxes will also be aligned with traditional tobacco taxation. Public transport benefits, such as free train season tickets, will continue until June 2025, but motorway tolls will increase by up to 11% for vehicles without electronic reading devices[3].

Travel and Border Regulations

For expats traveling within and outside of Spain, several changes are on the horizon. The European Union is introducing the Entry/Exit System (EES) and the European Travel Information and Authorisation System (ETIAS) in 2025, which will revolutionize border management. Bulgaria and Romania will become full members of the Schengen Zone on January 1, 2025, eliminating internal border controls for air, sea, and land travel[5].

EU citizens traveling to the UK will need an Electronic Travel Authorisation (ETA) starting in April 2025, costing 11 euros and valid for two years. This requirement applies to all EU passport holders, including infants and children, who do not have a visa or permission to live, work, or study in the UK[5].

Golden Visa Program Changes

Spain is considering significant changes to its Golden Visa program. While Greece is expanding its program to include investments in start-ups, Spain may terminate the Golden Visa scheme via property investment altogether. A bill to terminate this option has been approved by the Congress of Deputies but faces uncertainty due to a veto by the Spanish Senate[5].

Additional Tips for Expats

To make the most of life in Spain amidst these changes, expats can consider several New Year's resolutions. Learning the Spanish language is crucial for better integration and can be achieved through daily practice using apps like Duolingo or by immersing oneself in the local culture. Engaging in sports such as hiking or tennis, which are popular in Spain, can also help in making new connections and feeling more connected to the community[4].

Exploring new towns, landscapes, and historical sites within Spain can add variety to one's life. For example, visiting Cordoba, the Sierra Nevada mountains, or the Alhama de Granada hot springs can be enriching weekend getaways[4].

In conclusion, 2025 will bring a mix of financial adjustments, travel regulation changes, and opportunities for expats in Spain. Staying informed and adapting to these changes can help expats navigate and continue to enjoy their life in this vibrant country.