The Padron allows the local town hall to apply for funds from central government to bolster municipal budgets, on the basis of local population numbers. For this reason, many town halls are keen to get more inhabitants to register on their Padron, and often campaign to persuade more people to do so. In touristic and popular holiday home areas such as Marbella, these campaigns are often targeted at the high numbers of foreigners who have homes in the locality. This includes both residents and non resident holiday home owners.
Aside from the potential benefits to the area where you live the `Certificado de Empadronamiento´ is useful for a number of other purposes. These include proof of address, entitlement to local and reduced price services, and eligibility for subsidised rates of locally collected taxes – IBI,
Registering on the Padron. Do you need to?
By law you only need to register if you are a full-time resident in Spain. However, because the certificate is the most widely accepted official proof of address, many non-resident property owners register on the Padron, simply because it makes it easier to get a lot of things done,
The actual certificate is only valid for 3 months. What many people registering on the Padron are not aware of, is that the date on first registration is permanent, and until recently you remained on the list indefinitely. Now, non Spanish nationals have to re-register on the Padron every 5 years.
This can cause issues for part time residents, if or when they take up full time residency. Town Hall’s will maintain that there are are no tax implication, for being registered, however tax authorities can and do associate being ‘on the Padron’ with residency. For example a holiday home owner who has just become a permanent resident in Spain, may find themselves being denied a exemption from registration taxes when registering their own personal vehicle in Spain, simply because the Padron entry shows the date they first registered and that date pre-dates their declared date of becoming a Spanish resident.
Tax Implications of registering on the padron,
The Spanish tax authorities might include a Padron entry along with other evidence in trying to prove a fiscal residency, in relation to payment of taxes.
The above may be the case, but it doesn’t mean that by registering on the Padron, whether resident or not you will create tax issues for yourself. Rather if the idea of registering on the Padron does raise questions or concerns relating to tax, it is only be flagging a issue that already exists – i.e. that you may not be correctly set up for tax purposes, and would probably do well to seek advice from a suitably qualified professional, regarding how organising formal affairs.