Residencia – Fact, Fiction And Rumour

Filed under : Civil Law, Residencia

One very important aspect of living in Spain which seems to cause a great deal of confusion is the subject of residencia. I
have lost count of the number of clients who have been under the impression
that the requirement to register as a resident has now been abolished. This is
completely untrue. The very useful “carnet” or residency card is no longer
issued however it has been replaced by a less useful but equally mandatory

From 28 March 2007,
the Royal Decree 240/07 has required that all EU citizens who reside in Spain for more than three months register in person at the Foreigner’s Office
(Oficina de Extranjeros) in their province of residence or at designated
National Police Stations.  The nearest
National Police Stations are in Malaga,
Fuengirola and Marbella but expect
a long wait. This requirement is obligatory and not optional. If you already
have a valid residency card you need take no action until your card

Unless you speak good Spanish and have a great deal of
patience, it is recommended that anyone requiring a residency certificate uses
the services of a gestor or other professional specialising in assisting with
the application. They can take you to the Police Station, put you in the right
queue and help with the officials. Some have even been known to help you avoid
the queues altogether! If you haven’t already got one, you will need an NIE
(tax number for foreigners) certificate, your passport (up to date) and the
completed application form (modelo Ex.16). You also have to pay a fee at the
bank before you apply using a payment form, which you can get from the police

Many people are under the misapprehension that obtaining the
residency card or certificate is all that is necessary. However this is simply
a legal registration with the Ministry of the Interior. It does not, contrary
to popular belief, bring any tax benefits such as the possible exemption from
capital gains tax when you sell your property. To take advantage of some of the
tax benefits available to Spanish residents you must register as a fiscal
resident of Spain.
This means that your worldwide income would be taxed by the Spanish tax office
rather than the tax office of your home country. Strictly speaking, fiscal
residency is mandatory if you spend more than 183 days a year in Spain;
it is not supposed to be optional.

Some income such as state pensions and pensions for public
employees are already taxed at source and are treated favourably, however
interest, investment income and private pensions would all be subject to tax in
Spain rather
than in your country of origin. Some types of pension such as annuities are
taxed at favourable rates so it may be possible to end up paying less tax than
you were as a UK taxpayer. You should use the services of a qualified gestor or accountant to
prepare your tax return, which should be done by the end of June each year in
respect of income received during the previous calendar year. You can then
apply for a certificate of fiscal residency, which may help avoid the dreaded
capital gains tax if you are over 65 or are investing the proceeds in another
property in Spain.

Finally, everyone living permanently in Spain should register on the “padrón” of their local Town Hall. This is basically the
electoral role and a certificate of “empadronamiento” can be a useful document
to have. Furthermore it will help your Town Hall as they get additional
Government funding depending on the number of residents on the padrón.

For more information on this subject, or to make an appointment for a
private consultation, please contact us at De Cotta Law, De Cotta McKenna & Santafé on:

Tel.: +34 952 931 781
Fax: +34 952 933 547