REVEALED: The cheapest city in Spain to live in

We all know where the most expensive places to live in Spain are - yes we’re looking at you Madrid and Barcelona - but where are the cheapest? 

REVEALED: The cheapest city in Spain to live in
Palencia is the cheapest city in Spain. Photo: pilar Rodíguez / Pixabay

A new study by the price comparison website has analysed prices in the categories of housing, public and private transport, taxes, leisure and shopping. 

The results revealed that the city of Palencia in Castilla y León is the cheapest Spanish city to live in.  

Palencia sits at the top of Castilla y León, almost equidistant between Burgos and Valladolid. It also lies within an easy distance of the capital León, taking approximately 40 minutes by train and 1hr 30min by car. 

You can also easily reach the capital of Madrid from Palencia in just 1hr 30min by train or 2hr 30min by car.

It turns out that living in Palencia is actually 30 percent cheaper than the national average. 

The average wage in Palencia is approximately €23,500 per year, meaning that people there can enjoy greater purchasing power than in other areas of the country. 

Palencia particularly stood out for its cheaper housing and public transport. According to the online housing agency Enalquiler, the average price of renting an apartment in Palencia is 524 per month. While property site Idealista states that buying a home in Palencia costs €1,085 per metre squared. 

A one-way bus ticket there costs just 0.70, which is 41.67 percent less than the average in Spain. It was also the cheapest for a ten-trip multi-ticket, which costs just 4,45.65 percent less than the national average. 

Palencia is a relatively small city with a population of around 77,000 according to the latest data available. 

The cost of living is 30 percent cheaper in Palencia. Photo: Alejandro Polanco / WikiCommons

Known for its historic monuments, Palencia lies at the start of the Romanesque-style route around northern Spain and is surrounded by many churches, monasteries and other religious buildings. It is also revered for its spectacular Roman ruins – the Roman Villa of La Olmeda. 

Just a two-hour drive to the spectacular Picos de Europa mountain range and national park, the city, and surrounding area is ideal for nature lovers and outdoor enthusiasts too. 

The enclave of Melilla and the Galician city of Lugo took joint second place in the Kelisto study, where the cost of living was found to be 17 percent below the national average.

This was followed by Logroño in La Rioja, Teruel in Aragón, Cáceres in Extremadura, Zamora, Ávila, Soria and León, all in Castilla y León. 

The Camino de Santiago passes through the province of Palencia. Photo: Burkard Meyendriesch / Unsplash

READ ALSO: How much does it really cost to live in Barcelona?

Unsurprisingly, at the other end of the scale, the most expensive cities to live in, in Spain were revealed to be Barcelona and San Sebastián and Madrid. 

Barcelona was found to be 35.51 percent more expensive than the national average, San Sebastián was 29.9 percent more expensive and Madrid was 25.22 percent.

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Nine key points to consider when moving to Spain

Language, renting, red tape - there are many things you should factor in before and during your move to Spain. These tips from a relocation expert should help you land on your feet.

Nine key points to consider when moving to Spain

Spain’s foreign community is made up of nearly 8.8 million foreign residents, an increasing number which is helping an ageing country with a low birth rate to keep its population afloat.

More and more foreigners are choosing to make a life in Spain, be it for the climate, the different pace of life or the availability of visas such as the non-lucrative visa and the digital nomad visa. In fact, it was recently voted as the fourth best country in the world for foreigners to live in.

Spain isn’t as cheap as it used to be, especially in the big cities and tourist spots where gentrification and mass tourism are contributing to rising living costs, but there are plenty of other incredible regions which offer the Spanish quality of life, from the Basque Country, to Extremadura, Aragón or Galicia.

READ ALSO: The financial aid and tax cuts for people who move to a village in Spain

But before you decide whether you’ll willing to embark on a new life in Spain, there are several key points to consider and ways to prepare for the move.

1) Learn at least basic Spanish

When in our own countries, it is easy to take communication for granted. Be prepared by knowing basic greetings, and standard phrases (where is? how much is? please, thank you, etc). You might be able to navigate your way in English in more touristy locations, but imagine living in a less central neighbourhood and pulling your hair out at the local grocery store because you can’t remember the word for lettuce! 

Do take advantage of the opportunity to speak a foreign language and push yourself. Write down new words you learn and practice using them over and over again. Remember these are learning experiences that will be foundations on your journey to becoming a truly integrated foreigner in Spain.

READERS REVEAL: Nine sure-fire ways to improve your Spanish

2) Know the time schedule 

The Spanish time schedule is different than that of the USA and most European countries. Most businesses are open at 10am and close at 9pm, but also close between 2pm and 5pm for the siesta, especially in the smaller cities. Weekends vary: while shops are open on Saturdays, a lot of other services are closed. For example, as home hunters we get requests to see apartments at the weekend. However, in Madrid we find that most agents are not reachable at the weekend so it is difficult to optimize apartment options on a Saturday or Sunday.  

As for mealtimes, breakfast is usually between 7.30am and 9.30am, mid-morning snack is at 11am, lunch from is from 2pm to 4pm, afternoon snack between is between 5.30pm and 6pm, and dinner is between 9pm and 11pm.

If you are going out for dinner, most establishments will not seat you before 8.30pm unless you are in tourist areas.  


3) Research your neighbourhoods 

Before arriving, it’s important to look into the different neighbourhoods or barrios of your chosen town or city. Important things to consider are: location in relationship to your daily commute, cost, lifestyle, and schedule.

When I first moved to Madrid, I lived in the area near Plaza de Toros because it was located on my metro commute. I realized quickly that the local community was not really in my age group and that most local establishments closed way too early for my lifestyle and schedule. Do not just choose anything. This is your new home – make sure it’s the right place for you. 


4) Know the cost of living 

Let’s take Madrid as an example. The cost of living (including rent, bills, food and extra expenses) can easily be over €1,000 per person per month if you’re living on a student budget, to over €4,000 for a luxury lifestyle. 

Compare your monthly budget to these estimations, and visualize right now the lifestyle you can afford. Also we recommend using to compare the cost of living levels of your current city to that of your chosen destination in Spain.



5) Be aware of the conditions for renting apartments

Renting an apartment in Spain is different to what you might be used to in your home country. Everything is negotiable – or nearly – depending on the market. In a rental, all the conditions depend on the agreement you reach with the landlord. When you negotiate these conditions, it is essential you keep in mind the standard rental laws (La Ley de Arrendamientos Urbanos). 


6) Be aware of the conditions of purchasing property

Do your research. Buying property in Spain is not like buying in your home country. Know what the mortgage rates are for foreigners, what you will have to pay in taxes and fees, what the legal limits are, and what the buying process is like. Do your due diligence of legal, architectural and financial checks. Also, it’s always worth asking for the help of a professional.


7) Get a bank account 

You need a Spanish bank account to pay your bills. There is no other way around this. All service providers require one. If possible, sign up for a bank account before you arrive so that it is ready to transfer funds from your current bank. This will make everything quicker (signing up for services, rental deposits, etc). Do research on which banks operate in Spain, which have personalized representatives that speak English, and where the international transfer costs are the lowest.  


8) Look for the best phone plans 

Be ready to sign up for an affordable phone plan that matches your budget. Whether it is a pay-as-you-go plan or an 18-month contract, do your research and sign up before you arrive (with your new bank account).

READ MORE: Spain’s cheapest phone and internet deals in 2024

9) Prepare for red tape 

When you arrive in Spain, you will need to go through processes of getting or registering for basic administrative essentials like your NIE (Tax Number), social security number, medical card and padrón.

Obviously you cannot do some of these things until you arrive, but have an idea of what to expect so that you can get this done as quickly as possible when you arrive and start enjoying your new home.  


This article was written by Marianne Calvin, a former relocation expert in Madrid.