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 and expats who live and or own homes in the locality.
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 or entitlement to local and reduced price services, access to subsidised rates of locally collected taxes – IBI,
Foreigners and Expats 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, many foreigners and expats register on the Padron, simply because the certificate is required for, or makes it easier to get a lot everyday things done.
The actual certificate is only valid for 3 months. What a lot of foreigners and expats 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 foreign part time residents, if or when they take up full time residency. Town Hall’s will maintain that there are are no tax implications, however tax authorities can and do associate being ‘on the Padron’ with permanent residency. For example a holiday home owner who has just become a permanent resident in Spain, may find themselves being denied a waiver of import taxes on the registration of their own personal vehicle in Spain, on the basis that they have a historic Padron entry pre-dating their declared date of becoming a Spanish resident.
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 however mean that foreigners and expats registering on the Padron are creating tax issues for themselves by doing so. Rather if the idea of registering on the Padron does raise questions relating to tax, it is only be flagging a issue that already exists – i.e.- that an individual may not be correctly set up fiscally for tax purposes, and would probably do well to seek advice from a suitably qualified professional, regarding how they arrange their formal affairs.