Residency in Spain

Hi everyone

We are currently considering a move to Spain, but want to be cautious and do everything legally.

Could you please advise what is required of us.

We currently live self sufficiently in the UK, with very small financial requirements.

We have lived this way for a long time, and know the ins and outs in the UK.

We are set to receive an inheritance and our thoughts are that we would like to buy a house with land in Spain - the weather being the draw.

My question is, I understand to gain residency that we need to each have a passport, prove we have health cover and show that we can financially support ourselves.

Because we live self sufficiently we do not work, but also do not require a lot of money to live off.

With this  fact in mind, what would Spains authorities require us to prove we have financially to support ourselves, ie in the bank.

I assume after applying for residency in year 1, upon showing "X" amount in the bank account.  If little of it was used, it would still be ok for applying for residency the next year and so on.

Finally could you please confirm if the amount the authorties require you to prove you have is for a single person or a couple.

Thank you

Because you need to know so much about so many things you should use the search facility on this forum and look up item by item;there are lots of forums for would be ex pats-just google them, eg British ex pat discussion forum, ex pat forum Spain.

There are also plenty of sites-Anglo Info, UK in Spain, etc

I would say be careful about taxation and the implications of being tax resident in Spain, especially regarding the timing of your move.

Watch out that the Spanish tax man doesn't get his hands on some  of your inheritance!

You do not state if you are pensioners, which makes a difference for health cover. There are new rules about cover for those of working age, and there are forums all about it;you will have to wade through them!

You only have to sign on the foreigner's register(commonly referred to as residency) once;you do not have to keep proving income.

if I was in the same situation and thinking about living in Spain I would consider just renting for 6 months and going as a non resident status first.choose an area that ticks as many boxes as possible , (Prices, inland or Beach, urbans or country village) then get to know the areas the people and ins and outs of life in Spain, before you take the plunge. As a non resident you can purchase a place if you want to and anyone can get a bank account and National Insurance number. Its all very simple . Then the best advice will come from those ex pats in Spain you are bound to meet who made the same move.

I would have thought being an EU country you dont have to prove income or savings or anything as the EU has free movement so only thing required would be prooof of income (if you are renting) or setting up a bank account or Spanish Mortgage

So how long can anyone go to Spain on extended holiday without registering as a non resident. ?

So how long can anyone go to Spain on extended holiday without registering as a non-resident?

'Simple Question' !!!!

If an UE citizen (there are separate rules for non EU citizens) is in Spain permanently for 3 months they must register on the EU Citizens Register (Often incorrectly referred to as ‘Residencia’).

According to a call I made to Hacienda (the tax agency) having registered  they are then also Tax Resident.  I know some do not agree with this answer by Hacienda.

If one is in Spain for less than 3 months, but is here for a total of 183 in any year, they are tax resident and thus liable to pay tax on their worldwide assets and income, depending on any Double Taxation Agreement Spain may have with their country of nationality.

Non Resident Status.      If one applies for NIE , as a new rule, I am told by the Documentation Section of the National Police, that within three months of the application, they must register as either Resident or Non-Resident. There is a hefty fine for not doing so.

So “So how long can anyone go to Spain on extended holiday without registering as a non resident ?”      Less than 3 months permanently and less than a total of 183 in any year, and providing they do not apply for an NIE (required to open a bank account, buy a house, car etc)

One can become tax resident in several other ways,

See:-    http://www.agenciatributaria.es/AEAT.internet/en_gb/Inicio_en_GB/La_Agencia_Tributaria/Campanas/No_residentes/Impuesto_sobre_la_Renta_de_No_Residentes/Cuestiones_sobre_residencia/Persona_fisica_residente_en_Espana.shtml

When is an individual considered a Spanish resident, and when is he or she a non-resident?

An individual is resident in Spanish territory when any one of the following circumstances apply:

• They have stayed longer than 183 days in Spanish territory over the calendar year. In order to determine the permanence in Spanish territory, occasional absences are included, except if the taxpayer accredits their residency in another country. In the case of countries or territories labelled as tax havens, the Tax Administration can demand proof of stay in that tax haven over a period of 183 days within the calendar year.
• They situate the main base or centre of their activities or economic activities, directly or indirectly, in Spain.
• They have dependent not legally separated spouse and/or underage children who are usually resident in Spain. This latter situation accepts evidence to the contrary.

Individuals of Spanish nationality who accredit their new fiscal residence in a country or territory labelled as a tax haven will not lose their status as taxpayers for Individual Income Tax. This rule is of application during the tax period in which the change of residence occurs and for the next four tax periods.

Otherwise, where none of the previous situations applies, an individual is considered as non-resident in Spain.

I wonder how many people use their holiday homes frequently,  unaware of the fact they are actually tax resident?

Some people who rent don't seem to think the Tax and  residency rules  apply to them as well.

Some think they can choose where to pay their taxes.

Campo, until the authorities clamp down I guess they will continue to do so. So good luck to them.

I'm surprised you say"Good luck to them"-We try and do the right thing, why is it ok for them to plead ignorance, or deliberately flout the rules etc?  It's never ok to say, good luck to them if they can get away with it-that's why Spain is in the mess it's in now.

The trouble is the authorities DON'T clamp down on them; they prefer to pick someone who has provided them with  all their private financial info as on the 720 , looking tor something to fine them on.

The Hacienda doesn't have the money or manpower to chases up errant ex pats, which is what these avoiders rely on.One day, hopefully, they'll make an example of one, and they'll squeal like a stuck pig! Just watch  out forthe indignant letters  in the free papers!

The trouble is the authorities DON'T clamp down on them; they prefer to pick someone who has provided them with  all their private financial info as on the 720 , looking tor something to fine them on.

The Hacienda doesn't have the money or manpower to chases up errant ex pats, which is what these avoiders rely on.One day, hopefully, they'll make an example of one, and they'll squeal like a stuck pig! Just watch  out forthe indignant letters  in the free papers!

Sorry but it's not just the expats doing this.  The Spanish are masters at playing the system.  Only suckers do things properly in Spain, and yes, I'm one of those suckers unfortunately.

Campo, Firstly, I really do not care that much what the average person does.  If they live here they pay indirect tax, so that’s good for Spain.  In fact there might be an argument that if we come here and spend funds which have come from outside Spain, then maybe, apart from local taxes, we should be exempt from income tax as such.    We are after all just an asset to Spain. 

You say they pick on those who made the 720 declarations.  Maybe, but I have not heard of  one one such case. So as I said, it is the authorities job to enforce the law, if they do not do it, then it’s not my job to be involved in any way.

However, for, my part I am better off financially to pay my tax in Spain which is due here, and that which is due in UK, there.

 When I post here, it is about what one should do, as I understand it, and is for the benefit of those who want to be legal.

What people actually do,  is not my business.  That's why I say, good luck to them.

Until the new DTA comes into effect, then you may find that you are paying more. I worked out, depending upon your income in Spain, the breakeven for a Uk government pension Ii.e when you start to pay more tax) is just under £3,000.

With regard to the 720, there was a post on another site a few weeks ago, of someone who had received a letter from the Hacienda, asking for details of  rental income on a property they had reported. IIRC I did warn about making sure you declared any rental income on  aproperty you declared. Otherwise you are just setting yourself up as an easy target.

John ZX is right CAMPO.  You are too quick to make assumptions that most Ex pats in Spain are on the fiddle or not paying tax. No Doubt you declare everything so thats good... you can sleep in your bed at night. But dont be kept awake worrying about your neighbours who dont pay .  Lifes too short ...

We did our non resident Spanish Tax return through a UK company called  "Spanish Tax Forms UK" and it was so easy rather than pay any rip off solicitor in Spain.

We did our non resident Spanish Tax return through a UK company called  "Spanish Tax Forms UK" and it was so easy rather than pay any rip off solicitor in Spain.

Takes about 10-15 minutes to do yourself online. 

Each to his own and personally I'm happy to pay £25 pa to Spanish Tax forms to know that I've got it right,

If you do it yourself you might well lose a lot more than £25!

I'm with Kathyslad on this.    I did mine for years before I became tax resident and for more than 10 years I have been doing my son’s and his wife for three properties, and helping friends,  but I agree with Acer, if one does not have the competency to do it, then pay for the service.   And hope that the ‘professional’ gets right.  Albeit that £25 is a rip off for a few minutes work by a junior clerk in their office.

Not quite sure how it would cost you money, particularly if you've had it done "professionally" before, because its exactly the same each year, with changes only if you catasral value changes which is  normally at least every 10 years, if that. There's no mystery about it, You don't even need a calculator its so simple.