Spain vs Portugal vs Italy for American retirees: visa income, wealth tax and where an annuity helps
Written by Hans Goldstein, licensed insurance agent · CA 4273294Short answer: in 2026 Portugal’s D7 has the lowest income bar (€920 a month), Spain’s non-lucrative visa asks €2,400, and Italy’s elective residence visa the most, more than €31,000 a year per applicant, with savings generally not accepted. Only Spain has a wealth tax, and a US annuity stays in it. For income tax, Spain taxes 8% to 40% of each annuity payment by age, Portugal taxes only the income part at progressive rates up to 48%, and Italy taxes the yield inside each payment. The annuity matters most in Italy, where you need real passive income.
Free guide: Moving abroad on a fixed income
Income rules and taxes by country: Norway, Switzerland, Sweden, Italy, Spain, Malta and more, plus how a lifetime annuity fits.
These three countries come up together in almost every conversation I have about retiring in southern Europe. They look similar from a distance and are very different up close, especially on the two things this site cares about: how much provable income each wants, and what happens to a US lifetime annuity once you live there.
The visa income bars side by side
| Country and visa | Single (2026) | Couple | Savings accepted? | Annuity counts? |
|---|---|---|---|---|
| Portugal D7 | €920/mo (about $1,076) | €1,380/mo (+50%) | Other passive income yes; consulates also commonly want 12 months of the bar in a Portuguese bank | Fits “stable and regular” resources; not named in the rules |
| Spain non-lucrative visa | €2,400/mo (about $2,808) | €3,000/mo (+100% IPREM) | Yes, but must cover the whole permit period each time | Yes: consulates list a life annuity that cannot be cashed out |
| Italy elective residence | More than €31,000/yr (about $3,023/mo) | About €62,000/yr | Generally no | Yes: Boston, New York, Chicago and Detroit consulates name annuities |
USD at €1 = $1.17. Portugal’s bar follows the minimum wage (Portaria 1563/2007, €920 from January 2026), Spain’s follows IPREM (Real Decreto 1155/2024), and Italy’s comes from a 2000 Interior Ministry directive as applied by each consulate.
Wealth tax: only Spain has one
- Spain: yes. Residents are taxed on net wealth worldwide above €700,000 per person plus €300,000 for the main home, on a state scale of 0.2% to 3.5%, and regions vary. A life annuity with no surrender right is counted at the insurer’s mathematical reserve (Ley 19/1991 art. 17), so the annuity does not lower it. More in Spain wealth tax and annuities.
- Portugal: no net wealth tax. A separate surcharge applies only to high-value Portuguese real estate.
- Italy: no general wealth tax, but IVAFE charges 0.2% a year on financial assets held abroad (0.4% in listed low-tax jurisdictions, which do not include the US). How IVAFE values a no-surrender annuity already paying out is unclear; I have not found a ruling, so ask an Italian adviser. At 0.2% the amount is small either way.
In the same boat? Let’s run your numbers
See roughly what a lifetime annuity would cost to close your income gap, then get my personal read by email. I can help while you still live in the US.
Estimates use the September 9, 2026 ImmediateAnnuities.com payout survey (life only) and a 15% cushion. Illustrative, not a quote.
How each taxes a US annuity
| Country | What is taxed | Rate |
|---|---|---|
| Spain | A fixed share of each life annuity payment, set by age at the first payment: 40% under 40, 35% at 40 to 49, 28% at 50 to 59, 24% at 60 to 65, 20% at 66 to 69, 8% at 70+ (Ley 35/2006 art. 25.3.a.2º) | Savings base from 19% |
| Portugal | Only the income part. The capital part of a life annuity is deducted, and if it cannot be separated, 85% of each payment is set aside and 15% is taxed (CIRS art. 54). The rule does not depend on the insurer’s country | Progressive, 12.5% to 48% in 2026 (CIRS art. 68, Lei 73-A/2025), plus a solidarity surcharge at high incomes |
| Italy | The financial yield inside each payment, under rules that differ by product and date | Confirm with an Italian adviser; a 7% regime exists for foreign pensioners in some southern towns, but whether a private annuity alone qualifies is unconfirmed |
Portugal deserves a plain note. The old non-habitual resident regime, with its 10% rate on foreign pensions, closed to new arrivals from January 1, 2024, and its replacement, IFICI, does not cover pensions or annuities. So a new resident pays ordinary progressive rates, softened a lot by the article 54 capital deduction. A SPIA bought with after-tax savings is mostly a return of capital, so in practice only a small part of each payment is taxed.
As a US citizen you also pay US tax on the taxable part of each payment (the exclusion ratio, 26 U.S.C. 72), and the treaty plus the foreign tax credit stop full double taxation. The total is usually close to the higher of the two countries’ bills, not the sum. See how Europe taxes a US annuity.
Where the annuity earns its place
Italy: the annuity does the most work
Italy wants more than €31,000 a year of passive income per applicant and generally does not accept a savings balance in place of income. If your Social Security falls short, a lifetime annuity is the most direct way to create qualifying income. At 62 with no other income, $3,023 a month costs roughly $458,000 to $519,000 of premium at September 2026 survey rates (illustrative, not a quote), and much less once Social Security counts. See Italy elective residence visa.
Spain: the visa income, taxed lightly
Spain accepts savings, but you must show the full period again at every renewal. An annuity shows the same monthly figure each time, and Spain taxes only a slice of it. It does not help the wealth tax. See how to prove annuity income for the NLV.
Portugal: a convenience, often not needed
At €920 a month, many retirees clear Portugal’s bar with Social Security alone. The annuity helps when Social Security has not started yet, or when one spouse needs income in his or her own name. See Portugal D7 visa.
Paperwork that is the same in all three
Every one of these consulates wants documents it can read: the annuity contract, an insurer letter stating the monthly amount payable “for the lifetime of the annuitant” with no cash value, recent statements showing the deposits, an apostille where required, and a translation into the local language. Order the letter with that exact wording, and start payments 3 to 12 months before your appointment so the statements exist. A deferred annuity that is still growing counts as savings, not income, in all three.
A quick way to choose
- Highest assets, wealth tax sensitive: Portugal or Italy, since neither has a general wealth tax. Spain can cost you a yearly percentage of everything above the allowance.
- Income short, savings strong: Spain or Portugal accept other resources; Italy expects income, so plan an annuity early.
- Lowest tax on the annuity itself: Spain from 70 (8% taxable) and Portugal’s capital deduction are both light; your US tax usually binds anyway.
The trade-off, once: an annuity cannot be undone, pays a level dollar amount unless you add an increasing payout, and leaves you with euro exchange risk. For a retiree whose real problem is the income test, that is usually a fair price for income that lasts as long as you do.
Whichever country you choose, buy the annuity while you are still a US resident, choose a life-only payout worded “for the lifetime of the annuitant,” and start payments a few months before you apply.
Frequently asked questions
Related reading
- Moving abroad on a fixed income: hub
- Norway: income requirement and the US annuity wealth tax exception
- Spain non-lucrative visa 2026
- Portugal D7 visa 2026
- Italy elective residence visa 2026
- Spain wealth tax and annuities
- How Europe taxes a US annuity
Sources
- Portugal visa portal: means of subsistence (EUR 920 in 2026)
- Real Decreto 1155/2024, Reglamento de extranjeria (arts. 61 to 64)
- Consulate General of Italy in Boston: elective residency
- Ley 19/1991 del Impuesto sobre el Patrimonio (art. 17)
- Ley 35/2006 del IRPF (art. 25.3, life annuities)
- Portal das Financas: CIRS article 54, capital and income in annuities
- Portal das Financas: CIRS article 68, 2026 rates (Lei 73-A/2025)
- PwC Worldwide Tax Summaries: Italy, other taxes (IVAFE, IVIE)
- PwC Worldwide Tax Summaries: Portugal, other taxes (no net wealth tax)
- ImmediateAnnuities.com: immediate annuity rates by age (survey of September 9, 2026)
Goldstein & Co. LLC dba Goldstein Insurance Services · Hans Goldstein, licensed insurance agent, CA lic. #4273294 · NPN 20602398 · 213-414-2808 · hans@hansgoldstein.com
Education, not tax, legal or immigration advice. Rules, thresholds and exchange rates change; confirm with the consulate or immigration authority and a local tax adviser before you act, and get answers in writing. Hans Goldstein is a licensed insurance agent (CA 4273294) and can only offer annuities to residents of states where he is licensed. Annuity payments are guaranteed by the issuing insurer’s claims-paying ability, not by any government. Payout figures are illustrations from a published survey, not quotes. Immediate annuities are generally irrevocable.