One of the biggest mistakes people make when deciding where to live is placing tax considerations above everything else. While taxation is certainly an important factor, making it the sole or primary reason for relocation—or for not moving—is often a short-sighted decision.
You’re saving €20,000 a year in taxes—but what is it costing you?
I’ve spent a lot of time researching the best place to live for me and my family and this is one of the most important decisions I’ve made and continue to make in my life. Conditions change and so this is not a one-time decisions. For example, Asia might be great in your twenties when your focus is on exploring the world with your partner, but once you have kids you probably want to live in a more familiar environment within the culture you grew up with. For me, that is clearly the Mediterranean basin.
Let’s take some of the most common examples of tax-focused moves (or non-moves) I hear about.
Consider someone moving from Spain to Dubai to reduce their tax burden. Sure, Dubai offers attractive tax advantages, but what are you giving up in return? Living in Spain, especially on the Mediterranean coast, provides an unmatched lifestyle: warm climate, friendly people, incredible food, and the ease of jumping in a car and being in another country within hours. Your children can receive a top-tier education, grow up in a culturally rich environment, and have access to high-level sporting opportunities. Everyday life in Spain is also more affordable in many ways. Dining out, groceries, and even housing can be significantly cheaper compared to cities like Dubai. So while you might save on taxes, you could easily end up spending more in other areas. The same applies to Andorra, which is a very popular move among people in Spain due to its proximity and significantly lower taxes.
Or take Londoners relocating to Portugal or Dubai to reduce their tax burden. While Dubai is a booming hub with luxury appeal, it may not offer the same level of creative energy, cultural richness, or professional ecosystems they enjoyed in the UK.
Consider Americans who move to Puerto Rico under Act 60. The promise of nearly zero tax is alluring, but many underestimate the challenges: cultural adjustment, limited healthcare options, infrastructure issues, and lack of top-tier education for their kids. For some, the move feels more like exile than freedom.
Eastern Europeans heading to Singapore or the UAE for higher salaries and lower tax often face similar dilemmas: a trade-off between career opportunity and losing touch with their cultural roots, family, or nature-focused lifestyles.
Another scenario of not moving is choosing to stay in Malta simply because of its lower taxes compared to somewhere like Spain. This again overlooks the bigger picture. Take Barcelona as an example: it offers not just a vibrant city life, but also unparalleled networking opportunities, exposure to high-level professionals, and personal and professional growth that can far outweigh the money saved through lower taxes. Especially if you’re earning something in the range of €100,000 a year, the tax difference becomes marginal when balanced against the benefits of being in a dynamic, opportunity-rich environment.
And then there’s your family to consider. In cities like Barcelona, your children will grow up around the kids of ultra-successful parents, especially if enrolled in good private schools. This kind of social environment can have a massive positive influence on their development and future prospects.
Clearly tax is a valid part of the decision-making process, but it should never be the only consideration. Quality of life, cost of living, career growth, education, and personal fulfillment often provide far greater value than the percentage of income you’re able to shield from taxation. Look at the full picture—and make a choice that serves your whole life, not just your bank account.
Why do so many people fall into this trap? Partly, it’s due to the over-glorification of tax optimization in online communities. Financial influencers and digital nomads often push the narrative that avoiding tax is the highest form of financial wisdom.
But life isn’t lived in spreadsheets. Real life is built on relationships, experiences, health, growth, and a sense of belonging. Optimizing for taxes is rational, but it becomes irrational if it leads you to sacrifice long-term well-being for short-term savings.
A Better Framework for Choosing Where to Live
To make better decisions, we need a broader lens. Here’s a more detailed framework to consider when choosing a place to live:
Community & Networking: Are you surrounded by people who inspire and support you? Can you connect with mentors, business leaders, or creative collaborators? How many events, meetups and conferences are held within a 1 hour radius? Think about whether you’re in a place where your circle helps elevate your vision.
Cost of Living vs. Quality of Life: What are you getting for your money? Are your basic and aspirational needs being met in a way that feels sustainable and enjoyable? A higher tax location that gives you better services, more cultural offerings, and cleaner public spaces might actually give you a better deal overall. Everyone has their own needs, but as an example, to me, the ease of online shopping makes living in a city like Barcelona incredibly time-efficient and convenient.
Education & Child Development: Will your kids be in a nurturing, stimulating environment that supports their potential? Are they exposed to diversity, good values, and the children of other driven families? Are their teachers passionate, well-trained, and inspiring? The presence of world-class schools, access to languages, extracurriculars, and even peer influence can dramatically shape who your child becomes. If you have the opportunity to raise your children in a top-tier city with excellent education, not doing so is a massive missed opportunity.
Access to Nature & Travel: How easy is it to take a weekend break in nature or hop on a short flight to a culturally rich city? This has a huge impact on mental health and a family’s sense of adventure and balance. I love hopping into one of my cars and taking a trip to the many amazing places within easy reach, whereas in other places I’d need to take a flight to make a change of scenery.
Healthcare & Safety: Can you access top-notch medical services quickly and affordably? How safe is the city for you, your spouse, and your children?
Personal Growth Opportunities: Are there cultural events, conferences, sports, and new challenges around you that help you keep growing? Is your city pushing you to evolve?
Civic Engagement & Values: Do you feel aligned with the values of the place you live? Do people care about the environment, art, family, or innovation? Are you proud to call it home?
A location like Barcelona might not be the most tax-efficient, but it scores incredibly well across all these dimensions. And when all these elements work together, they create a foundation for a deeply fulfilling life.
The Power of Social Environment
Another underestimated factor is the social environment. Being around high achievers has a profound impact—not just on adults, but on children too. If your children are surrounded by ambitious, well-raised peers at school, they’re more likely to adopt positive habits, higher aspirations, and resilience. These are invisible, long-term advantages that pay dividends for decades.
Parents often underestimate just how much influence teachers and peers have on their child’s development. The reality is, your child will spend more waking hours with their teachers and classmates than with you. Their worldview, language, confidence, and habits will be shaped more by their environment than anything else. Being in a classroom where the bar is high, the standards are clear, and the kids are driven makes a world of difference.
What many don’t realize is that children absorb everything from their surroundings. Adults have filters—we can critique our environment, see its flaws, and emotionally detach when necessary. Kids don’t. If they grow up in a place where dysfunction, chaos, or mediocrity is the norm, they internalize that as how the world works. Conversely, when placed in a thriving, world-class city, they absorb excellence, structure, and aspiration as part of their everyday experience.
Sometimes, even as parents, we’re limited in what we absorb from our environment—but our kids aren’t. I’ve seen my own children mimic vocabulary, behaviors, and worldviews that clearly came from simply living in Barcelona. They are more open, curious, and socially engaged than I ever expected, not because of something I did, but because of what they’re immersed in every day.
As an adult, proximity to driven, successful people often leads to serendipitous opportunities—partnerships, introductions, ideas that change everything. A spontaneous dinner or school pickup can lead to the next great business venture or a lifelong friendship. That kind of organic networking is hard to replicate in more isolated or purely transactional environments.
The social atmosphere of a city also impacts mental health and motivation. Do you feel energized or drained by the people around you? Are people open-minded, optimistic, and generous? Are conversations stimulating? The right social environment can lift you out of plateaus and push you to reinvent yourself.
The Hidden Impact of Baseline Shift
One of the most transformative, yet underestimated, changes that comes with moving to a major city is the baseline shift. When you live in a smaller, slower, or more disorganized place, you may not realize how much you’ve adapted to its limitations. You think it’s normal.
But when you relocate to a dynamic, high-functioning place like Barcelona, you begin to operate on an entirely different level. The standards, the systems, the pace—all push you forward. You start expecting more from your surroundings and from yourself. This isn’t about being elitist—it’s about exposure. You can’t grow if you don’t even realize there’s another level available to you.
This applies even more to children. If they grow up surrounded by mediocrity or dysfunction, that becomes their default. If they grow up surrounded by excellence, curiosity, and drive, that becomes their normal. The bar is simply higher.
Short-Term Gains vs. Long-Term Regret
Tax savings may feel good in the short term, but regret creeps in slowly. People often realize too late that they’ve missed out on years of community, rich experiences, or opportunities they could’ve had elsewhere. I’ve mentioned Barcelona many times in this article because it takes the number one spot for living for what my family needs right now. However, there are many other comparable cities and locations that might take your number one spot depending on how you want to live.
So when choosing where to live, ask yourself this: Are you optimizing for tax, or are you optimizing for life?
Sometimes, the best investment isn’t in your bank account—it’s in your lifestyle, your network, your kids, your joy, and your future.
Choose wisely.
This article is based on both personal experience and countless conversations with others who’ve made the move—or hesitated and later regretted it. If you’re on the fence, do the math. But also run the life audit. The right decision might not just change your tax return. It might change your life.
When planning a trip, travel insurance is something I always consider, especially if I’m venturing out of Europe. Many digital banks and fintech companies offer insurance coverage as part of their premium subscription plans, which makes things convenient if you travel frequently. In this article, I’m sharing my comparison of the travel insurance options provided by Revolut, Wise, and N26, highlighting what they offer, what they don’t, and a few alternative online travel insurance providers I’ve looked into.
In an increasingly globalized world, more and more individuals are seeking ways to secure a second passport. Whether for expanded travel freedom, financial opportunities, or a safety net, citizenship by investment (CBI) programs have become a popular choice.