Background

Renate, a newly retired woman, had always dreamed of spending her retirement on an idyllic finca. Together with her partner, she decided to fulfill this dream and move to Mallorca. After a fulfilling career in Germany, Renate and her partner sought a place that offered both a high quality of life and a pleasant climate. Additionally, Renate gifted her privately used house in Germany to her daughter and continues to earn income from renting out several apartments.

Renate's Main Goals

• Realizing a Dream: Renate wanted to fulfill her long-held dream of living on a finca in Mallorca.

• Pleasant Climate: The Mediterranean climate of Mallorca, with its mild winters and sunny summers, was an important factor.

• High Quality of Life: Renate aimed for a lifestyle that allows relaxation, connection to nature, and an active community life.

• Tax Optimization: By gifting the house and receiving rental income, Renate wanted to structure her income optimally.

Challenges

These and many other questions were raised as part of the challenge:

• Buying Property Abroad: Purchasing a finca in a foreign country involved legal and bureaucratic hurdles.

• Wealth Tax in Spain: The wealth tax in Spain required detailed tax planning to minimize potential burdens.

• Gift of the Single-Family Home: The legal and tax processing of gifting the single-family home in Germany to her daughter was complex.

• Determining Rental Income: The management and tax determination of the rental income from the apartments in Germany had to be carefully planned.

Solution: Moving to Mallorca

After thorough research and consultation, Renate decided on Mallorca. The island offered exactly what she and her partner were looking for: a mild climate, high quality of life, and a welcoming community. Tax aspects were also carefully analyzed and strategically planned.

Implemented Measures

We were able to support Renate in the following areas:

• Analysis of Future Situation: A detailed tax planning was carried out to analyze the taxation of pension and rental income according to the double taxation agreement between Germany and Spain.

• Gift of the Home: The privately used home in Germany was tax-optimized and transferred to her daughter as part of the anticipated inheritance.

Result

Renate and her partner now live happily in their finca in Mallorca. They enjoy the pleasant climate and high quality of life on the island. Through strategic tax planning, Renate and her partner know what their future taxation will look like. The wealth tax in Spain has been successfully avoided.

Conclusion

Emigrating to Mallorca has proven to be extremely beneficial for Renate. Through the combination of strategic tax planning and secured property transactions, Renate was able to achieve both her personal and financial goals. This case study highlights the importance of careful planning and professional support when emigrating and implementing international retirement plans.