Spanish Residency

Since March 2003 EU citizens are no longer required to apply for residencia , a resident's permit. Residency does have its advantages as it confers considerable benefits, particularly as regards to taxation.

Holders of a residencia are entitled to the following advantages:

•  When selling a property, residents may offset the costs of capital gains tax towards buying a new property. (Non-residents must pay a capital gains tax of 35%.)
•  Residents do not pay income tax on the notional value of their dwelling, whereas non-residents pay a 25% flat rate.
•  Residents selling property in Spain are exempt from the obligation to allow the buyer to retain 5% of the declared value of the property. (Non-residents must allow the buyer this additional 5% as a guarantee of the seller's tax payment to Hacienda (Ministry of Finance.)
•  Residents are entitled to a 95% reduction of the inheritance tax required of non-residents.
•  Pensioners with a residencia are entitled to the full compliment of benefits and reductions available to Spanish nationals.
•  If stopped for a traffic offence, a non-resident may have their vehicle impounded until any fines have been paid - very annoying and avoidable for the holder of a residencia !

Applying for a residencia does not entail any reduction in the rights of the individual as a UK citizen. It is possible to remain in Spain as a tourist, but become a 'fiscal resident', i.e. if you stay in Spain for more than 183 days in the tax/calendar year (which are the same in Spain ). This requires that the fiscal resident submit an income tax return just as any Spanish National, but without any of the benefits of residency. Children under 18 years of age can be included on the parents' residence card.

Applications for residencia must be made to your local National Police Station. Collect the form, Solicitud de Tarjeta en Regimen Comunitario , form 037 (the application need for EU members) from the local police station and confirm the latest exact paperwork requirements. The list for a Spanish residency permit for a EU member usually includes:
 

•  Original completed and signed application and photocopy
•  4 passport photos
•  Passport and photocopy (with a validity of at least six months)
•  Proof of address whether title deeds to your property or rental contract
•  If applicable, work contract (must be for a minimum of 6 months), plus a photocopy
•  Medical form 121, your Spanish medical registration card, or a copy of a private health insurance policy
•  Proof of income: A certified letter issued by a Spanish bank documenting the regularity of income. This must be accompanied by form 790, which is also available at the police station. Pensioners also need to provide a Certificado Bancario to prove the amount of their pension and the regularity of payments
•  An original copy of the Certificado de Empadronamiento , obtainable from your local Town Hall, which proves you are registered on the electoral role
•  A certified copy of your penales , your criminal record. This can be a statement requested through your local police authorities.
•  Certified documents attesting to your marital status
•  Fees, which must be paid via a bank (you will be given a paying-in slip).

Applying for residency can be a headache. Local accountants, gestores, can greatly expedite the process as they know the ins and outs of the law. As officials they are allowed to skip queues and tend to shorten this lengthy process. Also the above is only true for EU residents, residency requirements vary depending upon the nationality. It is best to check out in each case what is needed. In some countries, visas are required before entering the country.