What is residency in Spain?
Residency in Spain, begins with a having a right to reside in Spain, either unconditionally, or for as as long as you continue to meet residency criteria.
Since 28th March 2007, the law (Royal Decree 240/07), has required that all EU citizens planning to reside in Spain for more than 3 months should register in person at the Oficina de Extranjeros in their province of residence or at designated Police stations. Upon registering, you are issued a credit card size residency certificate. The full name for this is, certificado de registro de ciudadano de la unión, however it is commonly referred to as certificado de residencia‘, or simply ‘residencia‘ with your name, address, nationality, NIE number (Número de Identificación Extranjero) and your date of registration as a resident.
Apart from the legal obligation to register, based on your intention to take up residency in Spain, if you spend 183 days or more per year in the country, then you are also deemed to have taken up tax residency in Spain. You therefore don’t ‘become resident’ by obtaining your residency certificate, in most cases you will by definition and law, be deemed resident in Spain based on the time you spend here, i.e. Spain is where you ‘habitually reside’.
An unconditional right to reside in Spain, extends to nationals of member states of the European Union and Switzerland, as well as other countries party to the agreement on the European Economic Area. Nationals of countries aside from these, are able to gain residency based on achieving certain qualifying conditions.
If you have the unconditional right to reside, you either register and get your ‘certificado de residencia‘ because you intend to take up residency, i.e. live in Spain for more than 3 months.
The right of residency in Spain can be extended to a spouse or civil partner and to direct descendants or dependants who are part of your household and under 21 years of age.
For someone planning to live long term in Spain, residency is the first step towards getting permanent residency status, which can be applied for after 5 years. Thereafter if someone so wishes, they can apply for Spanish citizenship after 10 years of permanent residency.
What is the process for getting a certificate of residency in Spain?
If you are a UK or EU national, first step is of course to exercise your right to reside, and move to Spain. To register as a resident and get your residency certificate, you’ll need a residential address, and to be able to prove that they have sufficient financial means to support yourself (and any dependents living with you), and that all applicants have access to healthcare, either through a private insurance policy, or entitlement through social security contributions.
Proof of means checks are in most places rigidly carried out, and the assessing officer can sometimes be pedantic. This means that the process of application for certificate of residency in Spain, is not always as straight forward as it should be. If you don’t provide the correct documents, you’ll not get a residency certificate, even if you have right of Spanish residency as an EU citizen.
To apply for a certificate of residency in Spain, you need to present your application along with supporting documents at the National Police station in your area.
Requirements once you’ve taken up residency in Spain
You are generally liable to pay taxes in the country in which you reside. This means that once you have taken up residency in Spain, you will be subject to Spanish taxation. The liability to pay taxes in Spain arises when you meet the residency measure based on the 183 day rule, and this obligation actually applies regardless of whether you have registered as a resident of not.
Tax for Spanish Residents
As a resident in Spain you pay tax on:
- General income
- Interest on savings and investments
- Capital gains on sale of assets
- Wealth (if your total wealth is 700k or more)
- Gifts and inheritance
Overseas Assets Declaration
Spanish residents must declare certain assets they own outside of Spain such as:
Planning before taking up residency in Spain
The requirement to have a residency certificate, is not the same as the need to have a passport in order to travel, or a driving licence to be able to drive a car. Therefore there is no need to rush to complete the residency formalities, when you move to Spain. Taking up residency in Spain for most, is not or should not, just be viewed as a paperwork exercise to get a residency certificate.
There are lots of things to consider when taking up residency in Spain, therefore, it is important to fully understand all the differences your new residency status will bring with it, how they might affect you in your situation, and to plan accordingly.
Some examples of things you might want to think about are:
- Learning about the system and knowing what needs to be done and when
- How the Spanish tax regime differs from the UK and what tax you will have to pay
- Changes that may occur to the status or tax treatment of assets you have
- Entitlements such as benefits or tax breaks that you currently enjoy which you may lose
- Access to healthcare for you and if applicable family members
- Getting advice on financial or tax matters in both the UK and Spain
- What rights you have as an EU citizen changing your residency to Spain
I’m British, what about residency in Spain now the UK has left the EU?
Spanish Residency for British nationals, used to be a basic paperwork exercise. It is now a necessity due to the UK’s departure from the EU.
The withdrawal agreement at least provide guarantees to EU citizen rights, and provides a transition period during which UK nationals in the EU can secure the current EU rights and vice versa. During the transition period it’s pretty much ‘business as usual’. British nationals already living in Spain who don’t have a residency certificate, or those planning to move, are advised to get a residency certificate this year, or run the risk of having to go through a more rigorous and requiring application process as a non-EU applicant, once the transition period ends.