06 Jul Should I become a resident or non-resident?
The question that causes most headaches for foreigners in Spain is the question of becoming a resident or not in Spain. Many who have bought property in Spain may want to spend more time in Spain than in their home country and wish to return home only for shorter periods, for example the summer months and the major holidays such as Christmas and Easter. Then the question immediately arises whether you need a permanent residence permit in Spain?
Whether or not you are resident in Spain depends, according to the Spanish immigration legislation, on how many days you stay in the country per year. If you stay for more than half the year (in tax terms at least 183 days per year), you are resident in Spain, whether you like it or not. You cannot therefore choose whether you want to stay more than half the year in the country.
Nowadays it is difficult for the authorities to control your stay here, but you should still be careful. Communication between Sweden and Spain has developed a lot in the last decade. The former residencia cards have now been replaced by a certificate for the registry of persons within the Union (Certificado de Registro de Ciudadano de la Unión), a paper that certifies that one is registered and resident in Spain. The application to obtain this is submitted to the National Police (Comisaría de Policía) in the municipality where you live.
Advantages of being resident in Spain
- People over the age of 65 who sell their permanent residence are completely exempt from capital gains taxation. The law assumes as a general rule that the property must have been the seller's permanent home for at least three years.
- When you sell your home and buy a new one that is at least as expensive as the one you are selling, you get a deferral of any capital gain. The requirement here is also that you have lived permanently in the sold property for at least three years. A Spanish postponement with the reason that the capital gain on the divested property disappears.
- As a resident, you avoid paying a beneficial value on your Spanish property.
- If you are a pensioner and enrolled in the Spanish insurance fund, you get all public medical care and medicines for free.
- You can vote in the Spanish municipal elections. However, you may not vote in the elections to the Spanish Parliament.
- Securities transactions (capital gains, interest and dividends) must be declared in Spain, which may result in a reduction in tax compared to your home country.
- As a resident, you have all the benefits and rights that a Spaniard has. The only exception is that you may not vote in the elections to the Spanish Parliament.
What is the advantage of not being resident in Spain?
- You don't have to declare your income in Spain. Only the state declaration of property ownership needs to be declared for the person who owns their Spanish residence.
- Many want to "float around" without being in any Spanish register.
- Those who cannot be tax-exempted from their home country may find it difficult to be resident in two countries.
