Becoming Spanish Resident

If I live mostly in Spain, I should hold the Certificate of Registration if I am an EuroCitizen. The law specifies that a person who has been present in Spain for six months must either leave the country or apply for a residence permit.

The disadvantages of being an official resident are for the most part invented. What's more, some real tax savings are available for residents who sell property or who bequeath Spanish property on their deaths.

When I visit Spain for a short holiday, I am a tourist. If I have a holiday home or a second home in Spain where I spend months at a time, I am still a tourist,  as my principal residence is in another country.. A tourist is a person who spends less than six months in Spain in one calendar year. The tourist stay in Spain for European and non-EuroCitizens alike is limited to 90 days.

Most advantages of remaining on tourist status when in truth I am a resident.have disappeared. If you think that anyone on tourist status does not become liable for Spanish income tax you are wrong, because any person who lives in Spain more than 183 days in one calendar year becomes legally liable to pay Spanish income tax.

If in fact I reside in Spain, it’s opportune to get a formal residence permit, if I am not EuroCitizen. If I am an EuroCitizen, it’s a simple Certificate of Registration which does not even need to be renewed.

For non-EuroCitizens it is the same old story. They need residence permits and work permits, and they face other complications as well.

TAX ADVANTAGES FOR RESIDENTS

The resident property owner has several tax advantages over the non-resident.

1.       If I am a resident and more than 65 years of age, and I have lived in my home for three years, I will not be subject to Spanish capital gains tax when I sell it, no matter how great my profit.

2.       If I am a resident and I sell my property, I am not subject to having 3 per cent of the total purchase price withheld and deposited with Spain's Tax Agency as a guarantee against my tax liabilities. Also, I do not pay my capital gains tax until the following year. A non-resident must declare in 30 days.

3.       If I am a resident and I bequeath my home to a spouse or child who is also a resident, they can probably avoid Spanish inheritance tax on 99 per cent of the valuation. The conditions are that I have owned and lived in my home for a minimum of three years. The inheritor must be a resident and must undertake not to sell the property for 10 years, while continuing to be a resident. Top limit on the 99 per cent reduction is €120,000. Over that, I must pay.

4.       A Spanish property-owner's imputed income tax does not apply to the owner's principal residence.

EuroCitizens NO LONGER NEED RESIDENCE CARDS

EuroCitizens are issued a sheet of paper called a Certificado de Inscripcion en el Registro Central de Extranjeros, a Certificate of Registration. This certificate does not constitute on his own an official means of identification, must go together with the passport.

The sheet also contains the EuroCitizen's NIE, my Numero de Identification de Extranjero, which identifies me to the Spanish tax authorities. For Spaniards, it is the NIF, and it is the same as the number on their national identity document.

I can download the application form E16  at www.mir.es.

Only citizens of the European Union, including citizens of the European Economic Area and Switzerland,  are entitled to the Certificate of Registration. All others must apply for cards as before. This includes non-European family members of an EuroCitizen. These family members are Spouses, Children,  Parents and grandparents. It applies to couples who are not married but are registered in a state registry of couples. These family members are entitled to residence, but they must apply for a card as before.

TAX IDENTIFICATION NUMBER (NIE)

My residence permit will include my Número de Identification de Extranjeros (NIE), which identifies me to the Spanish tax authorities. The number is necessary for practically any transaction in Spain, such as paying my taxes. Even a non-resident, who has any relation with the Spanish tax system, either by owning property or by drawing interest from a bank, also needs this NIE.

EuroCitizenS CAN VOTE

Finally, if I am an EuroCitizen, I will be able to vote in Spain's municipal elections. Not only can I vote, I can be elected to office. If this prospect appeals to me, shall present myself at my town hall immediately to be registered in the padron, the list of municipal inhabitants, which is the basis of the voter list. Obtain a Certificado de Empadronamiento proving that I have registered in the Census.

Some months before the elections I shall check to make sure that I appear on the voting list, otherwise I will not be permitted to cast my ballot.