Not many people are aware of the fact that moving to many rural or de-populated areas in Spain comes with some sizable tax benefits.
When you initially move to Spain, you’re likely to choose somewhere well-known and popular with other foreigners, where it’s easy to settle in, but as time goes on and you explore a little more, you may want to consider other lesser-known destinations too.
If you’re self-employed or work remotely in Spain, it gives you the perfect opportunity to be able to live in other locations away from the big cities and other popular hubs and find somewhere different with rewarding experiences.
Regional government schemes also mean that you can save up to €1,500 on your personal income tax declaration by moving to certain regions of the country. But it’s important to note that these deductions are not automatically granted, you must apply for them if you want to benefit.
High costs of living in big cities, lack of affordable housing and issues with overtourism may drive some to consider more rural areas where their money can go further, as well as saving on taxes.
According to the self-employment website Autónomos y Emprendedores, nine out of ten new self-employed workers are registered in Andalusia, Valencia and Madrid, but those that are location independent have the opportunity to move outside of these areas and save money at the same time.
“Most of these benefits are poorly advertised and do not appear in the Tax Agency’s notices,” Lourdes Meloso, a tax attorney at the Martínez & Galdón Abogados law firm, told website Autónomos y Emprendedores.
READ ALSO: Foreigners give ‘Empty Spain’ a new lease of life
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Here are following places you could move to in order to benefit from tax deductions.
Galicia
Galicia allows taxpayers under 36 or with disabilities to deduct up to €1,500 for work-related relocation expenses.
Castilla y León
If you move from a city to a rural location in Castilla y León, you can get a deduction of up to €900, provided you are young, a member of a large family, or have some degree of disability.
Aragón
Aragón offers deductions of up to €1,200 for those who move to work in municipalities with fewer than 3,000 inhabitants.
Asturias
If you are newly self-employed in Asturias, you can apply a deduction of €1,000 if you reside in areas at risk of depopulation or you need to move there for work. You can also deduct 15 percent (up to a maximum of €2,000) if you have to move to Asturias due to having a highly qualified job related to scientific or technical research and development.
Castilla-La Mancha
In Castilla-La Mancha, the incentive is a 15 percent deduction of the full regional quota if the person establishes their habitual residence in rural areas at risk of depopulation.
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Rioja
In La Rioja, self-employed people who reside in low population density areas can deduct 20 percent of their tax contributions, up to a maximum of €400.
Extremadura
While Extremadura is not offering a tax deduction, it is offering a big incentive for remote workers and digital nomads to move there, with grants up to €10,000. The aid is specifically aimed at highly qualified professionals in technological sectors who can work remotely or are self-employed and you have to continue living there for at least two years. Those who are under the age of 30, female or move to a town with fewer than 5,000 inhabitants can benefit from the full amount.
READ ALSO: Spain’s Extremadura is still offering digital nomads €10,000 to move there
State tax deductions
Aside from regional deductions, there is also a state deduction — established in Law 35/2006, which not many people know about.
This is, however, more aimed at those who have to move for work rather than people who simply chose to live in another region.
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Article 19 of this law states that all expenses arising from a mandatory work-related move, such as removal vans, temporary accommodation, and travel, to be deducted from your income. But if its to move in order to start a business somewhere else in a specific location, then you may be eligible.
Each expense must be justified with invoices or contracts, and you must provide proof that you changed your address in order to accept a job offer in another municipality.
This state tax deduction is also compatible with the regional ones, so if you meet the conditions, you could end up benefitting from both.
According to the Tax Agency itself, less than 5 percent of young people who move to rural areas are aware of the existence of these tax deductions.
