Things to consider when starting a new life in Spain

Residency

Since March 2003 EU citizens are no longer required in all cases to apply for a residency permit. EU and EEA citizens living and working in Spain and who are contributing either directly or indirectly to the Spanish Social Security system are not required to obtain a residency permit.

All EU and EEA citizens who are entitled to permanent residence in Spain may be exempt from having to apply for a residency permit under certain conditions.

  • Those that have lived in Spain for more than three years, have reached the age of retirement and are entitled to a pension and have been working during the 12 months before their retirement.
  • Those that have been forced to stop working due to permanent incapacity and have lived in Spain for more than two years continuously, or if their injury was caused by a work-related accident which entitles them to a pension payable by the Spanish State.
  • Those that have worked and resided continuously in Spain for three years, or another EU member state whilst maintaining their residence in Spain, returning to Spanish territory at least once a week. This provision is designed specifically for border workers who live in Spain but work across the frontier in Portugal, France or Gibraltar.
Those mentioned above and the circumstances under which they are exempt are the only exemptions to the rule. Everyone else must apply for and obtain a residency card. This includes retired people who have never worked in Spain and whose pensions come from other countries.

If you are from the UK the Department of Work and Pensions will be able to advise you fully on this matter.

Applications for residency must be made in person to the Foreigners' Office (Oficina de Extranjeros) or the National Police Station (Comisaría de Policía Nacional) with a Foreigners' Department from the city where you are going to live.

Applying for residency can be a laborious process, but your solicitor can be a great help in speeding up the process. They have all the legal knowledge to help you complete forms, and as officials they are allowed to skip queues.

Should you wish to declare residency in Spain, it does have its advantages, particularly regarding taxation. These benefits include:
  • When selling a property, residents may offset the costs of capital gains tax towards buying a new property.
  • Residents are entitled to a 95% reduction of the inheritance tax payable by non-residents
  • Pensioners with a residency permit are entitled to the full compliment of benefits and reduced prices available to Spanish nationals.
If you stay in Spain for more than 183 days of the year it is possible to remain in Spain as a tourist, but become a fiscal resident. 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' residency card.