SPAIN RESIDENCIA
There are advantages
Mike Walsh
Generally speaking, British nationals as EU citizens, enjoy the same rights as do Spaniards in their own country. This includes the freedom to enter Spain, travel within, and to live in Spain. They may also engage in activity as paid employees, self-employed, or as employers. Their only obligation is to apply for registration on the Central Register of Foreigners.
All EU citizens, whether resident or not, belong to what is effectively the United States of Europe, and enjoy similar rights within each others borders. Few distinctions exist and there are fewer differences between resident and non-residential status.
In essence, a non-resident enjoys the same status as a naturalised Spaniard or registered resident. The greatest remaining distinction is the legal line that divides EU citizens and non-EU citizens.
Nevertheless personal circumstances are taken into account in the application of certain laws relating to non-resident and resident status; mainly for tax purposes. Certain tax benefits are available to those who enjoy residential status. In summary:
1. When selling their property a non-resident suffers 3% Capital Gains Tax retention. If you are resident the buyer will not withhold the 3%. If you return to the UK or Ireland it is unlikely that the Spanish tax authorities will pursue you for it. The 3% retention applies to non-residents as there is a presumption they may disappear.
2. A non-resident will be subject to taxation, previously called ?wealth tax?, based on a notional value of their residence be they owner or tenant.
3. If you are aged over 65, and a resident, you will not have to pay Capital Gains Tax when selling your property.
4. A resident?s family can avoid up to 95% of inheritance tax if he or she dies.
5. An official resident registered on the local authority?s padron will receive other benefits which benefit the entire community. As a consequence the municipality receives more money from central and autonomous regional government.
Some municipalities on the Spanish Costas are populated mainly by northern Europeans. If many fail to register then the funds available meet only the requirements of a much smaller community. By becoming a resident and registering on the padron you gain personal advantage whilst gaining better services and better infrastructure in your municipality.
6. Residents on the Town Hall?s padron can vote in local elections and even stand as candidates.
7. Residents find it easier to acquire a mortgage.
Other points worth considering:
1. Because of several agreements between the EU?s healthcare authorities a UK pensioner enjoys the same access to the Spanish health service as does a naturalised Spanish citizen.
2. As a resident you are obliged to register your car with Spanish licences.
3. If you spend more than 183 days a year in Spain you must become a tax resident, which impacts on your worldwide income. But, thanks to a treaty between the UK and Spain your tax liability to the UK ceases.
As you can see; whilst all EU citizens have similar status; privileges and responsibilities when living in Spain, there are advantages to obtaining residential status. The application is fairly straightforward and not too onerous.
Michael Walsh and Partners: Legal and Property Specialists. 965 327 259 / 672 83 46 22 quite_write@yahoo.co.uk or www.southerncomfit.com
