Americans Moving to Spain: Banking, Investments and Property Financing

The move is the easy part

Spain is the single largest destination for Americans relocating to Europe, ahead of Italy, France and Portugal. The visa routes and the property market are well documented. The financial consequences of the move are not, they arrive later, and they are the ones that cost real money.

This page sets out the financial consequences of the move, in the order you will actually meet them.

Nothing here is tax or legal advice. It is orientation, so that you know which questions to put to a qualified professional and in what order. Regimes and thresholds change, sometimes at short notice, and what applies to you depends on your citizenship, your assets and the year of your move. Amberlake Partners works alongside specialist US tax advisers and reviews each situation case by case.

One: your US investment accounts

This is usually the first thing to break, and it breaks quietly. When a US brokerage records a foreign address, the relationship may be restricted, limited to sales only, stripped of mutual fund access, or closed outright. Policies vary by firm and change without notice.

The trigger is regulatory rather than personal. Serving a client resident abroad can mean doing business in that country, which brings licensing requirements a domestic US firm has little reason to take on. The consequence is that a portfolio built over decades can become unmanageable at the exact moment you need it. The mechanics are set out in Your US Brokerage Account After Moving to Europe.

Two: opening a local bank account

Banks across the European Union are subject to the Foreign Account Tax Compliance Act, which requires them to identify US persons among their clients and report those accounts to the US authorities. Many concluded the compliance burden was not worth the revenue. They either refuse American clients or accept them for day to day banking while excluding them from investment services.

You will usually find a current account. What you will struggle to find is an institution that will manage money for you. The detail is in US Expat Banking in Europe: Navigating FATCA.

Three: what you can legally hold once you are there

This is where well intentioned decisions do the most damage. Having lost access to US products, the natural move is to buy what the local bank offers. For an American, that is frequently the wrong answer, because most funds domiciled outside the United States fall under the passive foreign investment company rules. The reporting is heavy and the tax treatment can erase the return.

An American who solves the account problem by buying local funds may create a larger problem than the one they started with. What remains open, and why, is covered in European Funds and American Investors.

Four: buying property in Spain

There is no general restriction on Americans owning Spanish property. The difficulty is not ownership, it is financing.

Spanish banks lend to non residents, but typically at a lower loan to value than they offer a resident buyer, which means a larger deposit. For US citizens a second obstacle appears. A Spanish bank arranging a mortgage will usually want a broader banking relationship alongside it, including assets under management. That is precisely the relationship FATCA makes it reluctant to enter. The file is rarely refused outright. It simply stops moving.

The route around this is to attach a portfolio held by an SEC registered adviser to the file, which gives the lender the collateral relationship it needs without requiring the bank to take on a US person as an investment client. This is not theoretical. A US resident buying in Marbella had been turned down by every bank approached, and the file was approved within four weeks once an SEC registered adviser was attached to it.

The mechanics are covered in How Americans Buy European Property Without Selling Their Investments and How Americans Can Finance European Property Without Full Cash Payment.

Five: the tax layer

Spanish tax residence generally follows from spending more than 183 days in the country in a calendar year, or from having your main centre of economic interests there. Once resident, you are taxable in Spain on worldwide income, while the United States continues to tax you as a citizen wherever you live. The Spain United States treaty and foreign tax credits exist to prevent double taxation, and they largely work, but the interaction depends on the type of income.

Three Spanish features catch Americans by surprise, and all three deserve a specialist rather than a general rule.

The Modelo 720. Spanish residents must declare assets held outside Spain above a threshold. The penalty regime was found disproportionate by the Court of Justice of the European Union and has since been reformed, but the obligation itself remains. For an American with a US portfolio, this is not optional and not obscure.

Wealth tax varies by region. Spain levies a wealth tax, but the autonomous communities set their own relief, and some have applied full relief while others have not. The region you choose to live in can change your position materially. Confirm it for the specific community, and for the year of your move.

There is a special regime for inbound workers, commonly called the Beckham Law, which can apply to employment income for a limited period. Whether it fits your situation is a question for a Spanish tax specialist working alongside a US one.

The order to do things in

Twelve months out. Ask your US brokerage in writing what happens to your account under Spain residency. Establish where the assets would go if the answer is unfavourable.

Six months out. Engage a US tax professional who works with Spain, and decide what you will hold once you arrive. Do this before any forced liquidation, not after.

Three months out. If a property purchase is planned, open the financing conversation now. Attaching a managed portfolio to a mortgage file takes time, and it is far easier to arrange before you are on a deadline.

On arrival. Open local banking for daily life. Keep investment assets where they can actually be managed.

Common questions

Can an American buy property in Spain?

Yes. There is no general restriction on US citizens owning Spanish property. The obstacle is financing rather than ownership, because Spanish banks lend to non residents at lower loan to value ratios and are often reluctant to open the wider banking relationship that a mortgage file usually requires from a US person.

Why do Spanish banks refuse American clients?

Under the Foreign Account Tax Compliance Act, banks outside the United States must identify accounts held by US persons and report them to the US authorities. Many Spanish institutions decided the compliance cost outweighed the revenue and now accept Americans for current accounts only, or not at all.

What is the Modelo 720 and does it apply to me?

It is the Spanish declaration of assets held outside Spain, required of Spanish tax residents above a threshold. If you are American with a US portfolio and you become resident in Spain, it will very likely apply to you. The penalty regime was reformed after a ruling of the Court of Justice of the European Union, but the filing obligation remains. Take specialist advice rather than guessing.

Does the region of Spain I live in change my tax position?

It can, materially. Spain levies a wealth tax but the autonomous communities set their own relief, and the treatment has differed sharply between regions such as Madrid, Andalusia and Catalonia. Confirm the position for the specific community and the year of your move.

Will my US brokerage account still work if I live in Spain?

It depends entirely on the firm. Some maintain full service, some restrict the account to sales only, some remove access to mutual funds, and some close it. Ask your brokerage in writing about Spanish residency specifically, before you move.

Where Amberlake Partners fits

Amberlake Partners is the first wealth manager based in Monaco to be registered with the US Securities and Exchange Commission. The firm is authorised and regulated by the Commission de Contrôle des Activités Financières in Monaco, and the SEC registration is verifiable on the regulator's public register.

That registration is what allows the firm to advise American citizens and green card holders living in Spain and elsewhere in Europe, with custody across Monaco, Geneva, Luxembourg, Madrid, New York, Miami, Dubai and Singapore. Amberlake is independent and works on open architecture, with no in house products to place. On tax questions the firm works alongside specialist US and local advisers, case by case, rather than offering general rules.