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SECOND HOMES

Reader question: Can I be a resident in Spain and the UK?

Several readers have contacted us to ask if they can apply to be residents in both the UK and Spain in order to be able to stay in Spain longer than 90 days in 180 and to avoid paying more taxes in one or the other. Here's what you need to know.

Reader question: Can I be a resident in Spain and the UK?
A terrace bar in the Costal del Sol town of Benalmadena before the pandemic. JORGE GUERRERO / AFP

Before December 31st 2020, many Brits decided to split their time between Spain and the UK and didn’t always register for residency in Spain even if they stayed for long periods, coming and going as they pleased. Brexit has changed all this, however. 

Can you be a resident in both Spain and the UK?

Unfortunately, it’s not possible to be resident in both the UK and Spain and it never has been. Even before Brexit, you still had to choose which country you were resident in. Pre-Brexit, technically you were supposed to register as a resident after three months in the country, however as the UK was still part of the EU, the amount of time spent in Spain wasn’t monitored. This meant that you were able to spend longer periods in Spain and still remain a resident of the UK. 

If you register for residency in Spain, then you are liable to pay tax in Spain and will lose certain rights back in the UK such as access to the NHS and residency status. Therefore it’s not possible to be a resident in both countries. 

Up until December 31st 2020, UK citizens could enjoy the EU’s freedom of movement act, which gave them greater flexibility and allowed them to easily move between Spain and the UK, even though they were only officially resident in one.

Unfortunately, it’s no longer possible to do this.

Registering for residency in Spain

Brits who were living in Spain before December 31st 2020 and wish to continue living here, must apply for the biometric residence card called the Tarjeta de Identidad de Extranjero (TIE) if they are applying for residency for the first time. Those who previously held a green residency card, are encouraged by the British Embassy in Spain to exchange it for a TIE. Find out here how to exchange it. 

READ ALSO: Why UK and Spain now strongly recommend exchanging green residency document for TIE

The UK government living in Spain guide states that “If you were legally resident in Spain before January 1st 2021, your rights will be protected by the Withdrawal Agreement and you should check that you are correctly registered as a resident”. 

Spanish government website expands on this by stating: “Those UK citizens that arrive from January 1st 2021, and that are not included in the scope of application of the Withdrawal Agreement will fall under the general immigration regime, since the agreement reached between the UK and the EU does not include the free movement of people”.

If I register for residency in Spain, does that mean I am also a tax resident there? 

Remember that residency in terms of immigration is not necessarily the same as being a tax resident. Residency has to be applied for, while tax residency can be automatic when certain conditions are met.

According to the Agencia Tributaria Spanish tax authorities, an individual is a tax resident in Spain 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 the 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 have their main base or centre of their activities or economic activities, directly or indirectly, in Spain.
  • They have a dependent not legally separated spouse and/or underage children who are usually residents in Spain. This latter situation accepts evidence to the contrary.”

How long can I stay in Spain if I’m not a resident?

Brits who live in the UK and want to spend time in Spain or own a holiday home here, now need to limit their stays to 90 days in every 180 days. This is because of the EU’s 90-day rule, which allows non-EU citizens to only spend 90-days out of every 180 in an EU or Schengen zone country, without the need for a visa. If you want to spend longer than this you will have to apply for a visa.

Applying for a Spanish residency visa in 2021 and beyond

If you’re a British citizen who is not already a resident in Spain, but wants to be, you will be treated the same as third-country nationals, such as those from the US or Australia, and will need to apply for a visa.

According to Balcells Group legal firm in Spain, there are certain visas that make the process much faster, for example:

  • Non-lucrative residence, which only requires the possession of sufficient economic means and private health insurance. Find out more about the non-lucrative visa here and how much money you need for it. 
  • The investor’s visa, if you intend to make an investment in real estate to obtain residency.
    Find out all about Spain’s golden visa residency scheme here
  • The student visa, which will allow you to change it afterwards to a temporary work permit.

READ ALSO:

Q&A: What Brits in Spain need to know about tax and residence after Brexit

Member comments

  1. If you are a S1 holder and have an NIE I understand that you are still able to use the NHS when in the UK.
    I and my wife and dependent child applied for a UK EHIC card as advised by the UK government after Brexit. We received the cards in Spain in early January and they are valid for five years. They provide cover in the EU.
    I also understand that the cost of any non-private treatment in Spain (and I assume elsewhere in the EU) is charged back to the NHS.
    Am I right?
    David Walsh
    Asturias

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For members

RESIDENCY PERMITS

Spain vs Portugal: Which Golden Visa is better for you?

Iberian neighbours Spain and Portugal both offer the highly sought-after 'golden visa' for non-EU nationals who want to move to Europe. But what are the differences between them and which one is best suited to you?

Spain vs Portugal: Which Golden Visa is better for you?

Getting a visa or residency in a European country can feel near impossible if you’re a third-party national.

The EU’s ‘golden visa’ – sometimes known as as an investor visa – gives non-EU citizens the right to live in Europe, enjoy borderless travel within the Schengen zone, and even begin the process to gaining European citizenship if they meet several criteria.

This special visa is of particular interest to Britons searching for a way to move to the EU in the aftermath of Brexit, and has also proven popular with Americans, Russians, Chinese and Indian citizens who can afford it.

READ MORE: What foreigners should be aware of before applying for Spain’s Golden Visa 

What is a ‘Golden Visa?’

The golden visa is an EU immigration programme that awards residence permits in foreign countries in return for investment. It varies between countries (not all EU nations offer it), but often it involves purchasing a property of a certain value, creating a company or job opportunities, or in some instances contributing to a national development fund or investing in stocks and shares.

Two of the most popular European countries for golden visas (and for tourists and retirees in general) are Spain and Portugal. 

Since the scheme was launched back in 2013, the number of third country nationals applying has risen every year. In 2019, Spain issued this visa to a record 8,000 non-EU nationals.

Both countries are famed for their temperate climate, beaches, culture and relaxed lifestyle, but which of the golden visas is better: Spain’s or Portugal’s?

See below for the minimum investment needed; the type of investments you can make; how long it takes to get citizenship; whether the golden visa gives you free travel around the Schengen area; how long the application takes; the rules on residency, and how long you must spend in the country; and whether family members are included.

The facts

  Spain Portugal
Minimum investment required €500,000 €250,000
Type of investment Property over €500,000; €1 million in a Spanish company; €1 million in a Spanish bank account; at least €2 million in Spanish public debt securities. Property over €500,000 or urban renovation of €350,000; business startup creating at least 10 jobs; capital transfer of €1.5 million; research and development investment of €500,000; €250,000 contribution in the arts. 
Citizenship timeline 10 years 5 years
Schengen Travel? Yes Yes
Application time 20 business days processing once documentation is received; 2/3 months in total. 3-6 months
Residency rules Must visit Spain once a year. 1 week for the first year; 14 days every 2 years after.
Family included? Partner, dependents and children (under 18). Partner, dependents, children, parents of the main applicant if over the age of 65 years old (under 18 or dependent and unmarried children who are under 26 and in full-time education).

Changes to Portuguese Golden Visa

New visa rules came into effect in Portugal from January 1st 2022. These have mainly increased some of the minimum investment thresholds (but not the arts investment, which at €250,000 remains the cheapest route to a golden visa for either Portugal or Spain) and have changed some of the geographic requirements for property investment.

Keen to stimulate investment in the less touristy parts of Portugal, buying a residential property in big urban centres such as Lisbon or Porto or in the popular coastal regions such as the Algarve are no longer sufficient to qualify for a golden visa.

As of 2022, property investments must be in Madeira, Azores, or Portuguese inland regions and rural or low-density areas. In such areas, a 20 percent discount on the investment is offered.

You can find the full geographical breakdown of investment areas here, although be warned the text is in Portuguese. 

In Spain you can buy several properties which add up to €500,000

One option for the visa is to buy a property for €500,000 or more, but you are not required to spend it all on one property. You will still be eligible for the visa if you buy multiple properties, as long as the total amount adds up to more than €500,000.

The extra costs

Besides parting ways with half a million Euros to get a visa, both Spain and Portugal require some hefty application fees for the scheme.

Fee Spain Portugal
Application €70 per applicant €80 per applicant
Approval €5,000 per applicant €5,857 per applicant
Renewals €3,000 per visa holder €3,195 per visa holder
     

Tax benefits

One advantage of the Portuguese Golden Visa scheme is its tax rules.

Portugal’s Golden Visa program offers the ultimate tax advantage. Golden Visa holders are eligible for Portugal’s NHR Tax Scheme, a system that grants tax-exemptions for up to ten years.

Exemptions include income obtained from pensions, capital, income from property and capital gains, intellectual property and industrial property. The property tax transfer system means that Golden Visa holders pay the same rates as local residents.

In Spain, all foreign residents are taxed on their ‘worldwide income’ if they are in Spain for more than 183 days a year. For non-residents, tax is charged at 24.75 percent on income earned in Spain.

Getting the golden visa, however, doesn’t mean you have to reside in Spain or spend a certain amount of time here in order to renew it. This means that you don’t have become a tax resident. The only requirement is to visit once a year to renew your permit.

READ MORE: Property in Spain: Is now a good time to buy a home? 

The golden visa is retroactive in Spain

This means that if you already bought a property in Spain worth over €500,000 after 2014, but didn’t apply for a golden visa at the time, it’s still possible to do it now.

The property can be sold once you have obtained permanent residency in Spain. Once you have lived in Spain for more than five years and have obtained permanent residency, you are able to sell the property without forfeiting your right to reside in Spain.

You cannot, however, use a mortgage loan or financing for your investments. This cannot be done through a mortgage company or a loan, and must be from your own pocket.

Conclusion

Portugal and Spain’s golden visa schemes offer fantastic opportunities to relocate to an EU member state.

Both offer you the chance to enjoy borderless travel in EU member states, but they both also require you to have a significant amount of money saved up in order to invest it in property, renovation, shares, capital transfers, or debit securities.

If you’re concerned about taxes, perhaps the benefits of the Portuguese visa might entice you. It is worth remembering, though, that the recent changes to the Portuguese system now mean there are geographical limits on property investments meaning you can’t buy in popular areas. 

If you’re overly concerned about location, the Spanish golden visa gives you more freedom to choose where you live.

The sums for property investment are broadly similar, sitting at €500,000 in both countries, although in Portugal there are discounts for taking on renovation projects and purchasing property in sparsely populated areas which could reduce the amount of your investment quite significantly.

In Spain, the property threshold, regardless of where it is or what type of property it is, is a flat €500,000.

Both golden visas have very little in terms of residency requirements, although in Portugal the time to gaining citizenship is just 5 years, half of Spain’s 10-year wait. With the golden visa, in Spain you can obtain permanent residency after five years.

If you’re still undecided, the article below may help you pick between Portugal and Spain.

READ MORE: Portugal vs Spain – Which country is better to move to?

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