RESIDENT OR NON-RESIDENT

Firstly what does that mean? Basically a resident of Spain is someone who spends more than 183 days per year in Spain.

 

Therefore if you do - or are planning to - you may have to apply for Residencia. This is a simple matter of going to the Police Station with the necessary documentation. In some cases, eg if you are or will be working in Spain, then your Social Security number will be proof that you are living and working in Spain and eventually paying taxes as a resident so a Residents´ Card would not be necessary.

 

Being a resident means that you should declare your worldwide income in Spain.

 

As Spanish law currently stands residents benefit from having lower Capital Gains Taxes and do not have to pay an annual income tax on their main property. See taxes

 

If you are living in Spain less than 183 days per year then you are not considered to be a resident.  You will not have to pay income tax in Spain on your worldwide income. However, if you own a property you will be liable for a "second home tax” sometimes formerly known as a non-residents tax. Now all owners of second homes, whether resident or not, have to pay tax based on the Spanish tax authorities assessment of income arisen from this property.

 

In the case of a resident, this amount would be added to his annual income and then taxed according to his income bracket (currently between 18 and 43%)

 

In the case of a non-resident, this tax is a flat rate of 25%.

 

In both cases the amount of assessed income is based on a percentage of the rateable value and then the person is taxed according to his status – resident or non-resident.

 

For example the amount of deemed income will be applied at either 1.1% or 2%. Therefore, if the rateable value is 100,000 Euros then the income assessed on the property in the worst-case scenario would be 2,000 Euros. For residents this amount would be added to their annual income. For non-residents a flat rate of 25% would mean that they would pay 500 Euros in tax. See taxes.