Living in Madrid: neighbourhoods, cost of living and relocation

Madrid is a capital on a high plateau, flat at its centre, very spread out and organised into districts with strong identities. The choice of neighbourhood shapes your way of life more clearly than in most European cities.

The historic centre — Sol, La Latina, Malasaña, Chueca — is lively until late, dense and noisy. It suits people moving without children and quickly puts families off, as much because of night-time noise as because of the size of the homes.

Salamanca and Chamberí form the affluent residential area: well-built buildings, upmarket shops, schools, and the highest rents in the city. Retiro, next to the park of the same name, offers a compromise popular with French families.

Chamartín and Tetuán, to the north, combine buildings from the sixties, good transport links and more moderate prices. This is the area where family-sized homes can still be found at a reasonable price.

The northern and western outskirts — Las Rozas, Majadahonda, Pozuelo, Aravaca — are home to most of the international schools, including the French lycée, and to detached and semi-detached housing. Living there means having a car and a daily commute, but it remains the dominant choice of expatriate families with children in French-language schooling.

We do not publish a median rent for Madrid: Spain has an official rental price reference system, but we were unable to verify its current values for the city of Madrid directly. We do not use estimates from property listing portals, which are not official sources.

What can be said without figures comes down to two observations. Madrid's rental market is one of the tightest in Spain, and rents have risen sharply in recent years, to the point of making housing a national political issue.

Spain's housing law introduced a rent control mechanism in so-called stressed residential market areas, whose application depends on the autonomous communities. The Community of Madrid has not implemented it, unlike Catalonia — a major difference between Madrid and Barcelona.

In practice, a newcomer should expect a statutory deposit of one month plus additional guarantees, frequent requests for a Spanish employment contract or a guarantor, and fast competition for good-quality properties.

Residential leases are subject to a statutory minimum term that the landlord must respect, which is more protective than in France as regards renewal. This framework is worth reading before signing, as it determines how stable your move will be.

Housing aside, Madrid remains cheaper than Paris for eating out, services and public transport, whose pass is notably inexpensive. The gap has narrowed for groceries.

We do not publish a typical monthly budget: we have not found an official Spanish series measuring a basket of spending comparable to that of an expatriate.

Housing is therefore, here again, the deciding item. It absorbs most of the advantage on other expenses, and a household looking for a family-sized home in a central neighbourhood will find little difference compared with a large French city.

The climate weighs on energy costs both ways: Madrid summers are very hot and dry, making air conditioning necessary, and winters are cold for the latitude. The two items add up rather than offset each other.

Finally, personal taxation weighs on disposable income: the general Spanish income tax scale reaches 47%⁵ at its top marginal rate, and the regional (autonomous community) share varies from one community to another.

Madrid's French community is large, organised around a dense school, consular and business network. The city hosts the Spanish headquarters of many French groups, making it a classic destination for professional mobility.

The Spanish regime for so-called posted workers (impatriates) is directly relevant to these profiles: it allows you to be taxed as a non-resident for 6 years⁶, at a rate of 24%⁷ below an income threshold set at €600,000⁸.

This scheme is one of the factors that distinguish Madrid from Barcelona for a relocating executive, along with regional taxation, as the Community of Madrid applies allowances that Catalonia does not.

Language integration, on the other hand, is essential: English is far less widespread in Madrid than in northern European capitals, and both administrative and social life are conducted in Spanish.

The Madrid metro is one of the most extensive in Europe, complemented by an efficient commuter rail network. The monthly pass is inexpensive, and free travel or discounts for young people and seniors are substantial.

Barajas airport, linked by metro and train, offers some of the best connectivity in Europe, particularly to Latin America. Atocha station puts most major Spanish cities within a few hours by train.

The Spanish public healthcare system is of a good standard and accessible to registered residents. Private provision is extensive and used by many expatriates to cut waiting times for specialists.

• The foreigner identification number (NIE) is the prerequisite for everything: lease, bank account, social security registration, employment contract.
• Registration on the municipal register is required to access the health centre and state schools.
• A presence of more than more than 183 days⁹ entails Spanish tax residency.
• The temporary solidarity tax on large fortunes targets wealth above more than €3,000,000¹⁰: it partly cancels out Madrid's allowances.