In the past, anyone spending more than 3 months in Spain was required by law to apply for a ‘tarjeta de residencia’ or residence card. However, with effect from 28th March 2007, the law was changed resulting in European Union citizens no longer being issued with residence cards.

New regulations state that EU citizens who plan to reside in Spain for more than three months must register at their local Foreigners' Office (Oficina de Extranjeros) or at a designated National Police Station, whereupon they will be issued with a certificate showing their name, address, nationality, identity number and date of registration. This is especially important if one is planning to work in Spain.

Those EU citizens in Spain who already have residence cards are not required to re-register until their existing residence card expires. On re-registration they will be issued with the new certificate.

Historically it was extremely beneficial, from a financial perspective, to hold ‘residencia’; however, since the inception of the new Income Tax Act on January 1st 2007, in particular with regards to Capital Gains Tax liability on the sale of property, the benefits have largely been erased. This is because GCT liability is now calculated at 18% regardless of residential status, a substantial decrease from 35% for non-residents, albeit a 3% increase for residents and Spanish nationals.

There are, however, still benefits in holding ‘residencia’ in Spain, for example, when selling property as a non-resident, a retention amounting to 3% of the purchase price, is withheld by the buyer and paid directly to the tax authorities in anticipation of the calculation of Capital Gains Tax due. This requirement is not necessary in the case of residents.

Moreover, in respect to banking, non-resident accounts incur charges which do not apply to residents’ accounts; therefore, by obtaining residency you will receive a better deal at your bank. An example of this is the charge made for the bi-annual declaration of non-residency, for which some banks will charge €15 per person named on the account. It must be remembered that the Bank will need to be notified that you have obtained residency so that they may adjust your account accordingly.

Being in possession of a certificate of residency does not mean that an individual may live in Spain permanently; it is deemed to be temporary residency. Permanent residency may be applied for after 5 consecutive years of lawful residency in Spain, which will be confirmed by the authorities. There are occasions where pemanent residency can be granted prior to the 5 year requirement; more details of which can be found here.

To download the application form for the ‘certificado de residencia’ click here. The form is similar to the application for an NIE, for assistance in completion click here.

Once completed, photocopy and take the form in person, along with a valid passport (and a photocopy) to the ‘Oficina de Extranjeros’ or National Police Station, whereupon you will be asked for a small issue fee. The form will be signed, stamped and a copy returned to you. You will either be advised when to return to collect the certificate, or occasionally, the certificate may be issued on the spot.

Because the certificate does not include a photograph, you will still need to carry some photo identification with you at all times; this is especially true if you wish to pay for goods or services with a credit or debit card. Even if you are not intending to go shopping, the British Consular services advise all British citizens in Spain to always carry some proof of identity on their person.