Blog · Taxes

Does owning a home make you a Spanish tax resident?

§ 1A flat, a neighbour and a calendar

You collect the keys to a flat in spring. By the summer a neighbour has told you, kindly and with total certainty, that the Spanish tax office now counts you as a resident, and you start to wonder whether to cancel the August you had planned.

The worry has a source. Residencia fiscal, or tax residence, decides which Spanish tax regime applies to you, and the home is the most visible thing you hold in Spain. The tests the tax agency applies start elsewhere: your days, your economic life and your family. The short version of all three sits in the chapter on tax residence for owners.

§ 2What the tax agency counts

The agency's practical manual for the personal income tax return sets out residence under article 9 of the income tax law. It lists two tests and one presumption, and it points out that residence is not decided by the first test alone. A home is not on the list.

Days in the calendar year

You are resident if you stay more than 183 days in Spanish territory during the calendar year. The manual adds that ausencias esporádicas, or sporadic absences, count towards that period unless you prove tax residence in another country. That sentence is easy to read past, because it means the days you spend away can be added to the days you spend in Spain when you cannot show residence elsewhere.

The manual also explains how the agency counts, using the criteria of the Tribunal Económico-Administrativo Central (TEAC), the central tax tribunal. A day of presence proved by reliable evidence counts as a whole day, with no minimum number of hours and no need to prove several days in a row. Days between two proved days of presence can be counted as well when they form a reasonable run, unless you prove you were outside Spain. And the manual says the Supreme Court has rejected letting an intention to return decide whether an absence is sporadic, and that presence in Spain cannot depend on having no plan to move abroad. What you meant to do does not settle the count.

The centre of economic interests

The second test asks whether the main base of your activities or economic interests, the centro de intereses económicos, is in Spain, directly or indirectly. The manual gives no list of facts and no weighting. Our note on the centre of economic interests test reads a lone holiday home as a minor part of the picture next to work, income and main assets, and that is a reading of the wording, because the agency's page does not rank the facts. The practical point is that this test can apply on fewer days, so a day count alone does not tell you your status.

The family presumption

Residence is presumed, unless you prove otherwise, if your spouse (not legally separated) and your dependent minor children habitually live in Spain. The presumption follows where your family lives, and the manual's wording says nothing about who owns the flat. The text we read names a spouse and dependent minors. We read nothing on partners who are not married, so a couple in that position should ask.

§ 3Where a home touches the tests

Owning a home does carry a Spanish tax duty of its own. The agency says that non-resident individuals who own urban property in Spain are taxed on imputed income (renta imputada) when the home is for their own use, not tied to a business, or empty. That duty belongs to the owner who is not resident, so it is a consequence of owning, and it does not make you resident. The rates, the return and the deadlines are in the chapter on non-resident taxes for owners.

§ 4One invented year, 1 January to 31 December

Take an invented owner, Clara, a British citizen who lives and works in the UK and owns a flat in a coastal village in Spain. Every date and number below is illustrative, made up to show the method. The agency's manual says the personal income tax period is the calendar year and that the tax accrues on 31 December, so the year runs from 1 January to that day, and the count of days is taken over the same stretch.

Arrival and departure days count in full, as the manual's criterion treats a proved day. On 31 December Clara's count is 88 days, less than half of the 183 days limit. Her salary, her savings and her family are in the UK, so on these invented facts neither the economic test nor the family presumption points to Spain. The flat appears in none of the three. What it gives her is the non-resident duty described above.

One sentence of the days test still needs care. The other 277 days of her year were spent in the UK, and the days test adds sporadic absences unless she can prove tax residence in another country. For Clara that proof is her UK tax residence, and the manual does not list which evidence the agency accepts. Her 88 days also sit under the visa-free limit of 90 days in any 180-day period, so every 180-day window passes, which is a separate check on the same log.

§ 5The same year with three changes

Keep the flat and the base year, and change one fact at a time.

Longer stays

Clara replaces her October and Christmas visits with one stay from 1 October to 31 December, which is 92 days. Her year becomes Easter 10, June 14, August 31 and autumn 92, a total of 147 days. On presence alone that is still under the 183 days limit. But the 180-day window ending on 31 December now holds 123 days in Spain, the 31 of August plus the 92 of autumn, and that is above 90 days in any 180-day period. As a British citizen without a visa or permit she has broken a different rule. The tax count and the Schengen count are two checks run on one log, and the chapter on the 90-day Schengen limit covers the second.

The economic base moves

In the base year Clara's UK job ends in September and she takes a consultancy contract with a Spanish client, paid into a Spanish account. Her days stay at 88. The second test now has facts to weigh, namely where her activity is and where her income arises. The agency's text does not say how much of an economic life must move before the main base is in Spain, so we cannot give you a number. The question belongs to the adviser, with the date of each change in hand.

The family moves in

In a third version, Clara's husband and their daughter, a dependent minor, move into the flat on 1 September for the school year while Clara commutes from the UK. The presumption now has its facts: a spouse and a dependent minor child living in Spain. Residence is presumed unless she proves otherwise, and her own days stay at 88 whatever the proof. The manual adds that tax residence is not settled by considering yourself resident or not. Whether a school year counts as living there habitually is not answered in the text we read, and it is the point to settle first.

§ 6When the UK claims her as well

Assume that the UK, applying its own tests, which we did not read, also treats Clara as resident in the family version of her year. The agency says a person can be resident in two states because each applies its own rules, and that the convenio, or tax treaty, between them applies if one exists. Spain and the UK have a convention signed on 14 March 2013, which replaces the 1975 one (article 28), and its tiebreaker is article 4, paragraph 2. For an individual who is resident of both states it asks four questions in this order:

• Where does the person have a vivienda permanente, a permanent home, at their disposal? If there is one in both states, the state with which their personal and economic relations are closer, the centre of vital interests, prevails.
• If that cannot be decided, or there is no permanent home, the state where the person habitually lives.
• If both or neither, the state of which the person is a national.
• If both or neither, the two tax authorities settle the case by mutual agreement.

The agency's own summary of treaty tiebreakers follows the same order. In the base year the question never arises, because on the invented facts Spain's tests do not reach her. In the family version she has a permanent home in the UK and, if the flat is at her disposal, one in Spain, so the case moves to the closer ties. Her husband and daughter are in Spain, her work and salary are in the UK, and the text does not weigh those against each other for you. That is why the adviser needs dated facts.

The convention's words are a permanent home "a su disposición", at the person's disposal, and the text we read does not say the home must be owned. Whether a flat that Clara lets to others for most of the year would still be at her disposal is not answered there. Our note on reading a treaty's residence article shows where to find the text of any treaty, and the page on what the UK-Spain treaty does for British owners covers the rest of its work.

§ 7What the treaty leaves in place

A tiebreaker answers one question, which state counts you as resident for the purposes of the treaty. It does not make the flat untaxed. Article 6 says that income a resident of one state derives from immovable property in the other may be taxed in the other state, so Spain keeps its claim on income from a home in Spain. Article 22 deals with relief: Spain avoids double taxation under its domestic law or the article's provisions, and the UK under its own rules on credit or exemption. We did not work through either method.

For people the agency treats as resident, it issues a certificate of tax residence in Spain, and for treaty countries the certificate states residence for the purposes of the convention. It follows the agency's own records, so a day log and filings that agree with each other matter before you ask for one. A person Spain treats as resident may also have to file the assets-abroad declaration once the assets pass its thresholds, which the note on Modelo 720 explains.

§ 8What we could not confirm

We read the agency's manual and pages and the official text of the convention, not the income tax law itself, which the manual cites. We did not read the UK's residence tests, the convention's mutual agreement article, or any effect of the multilateral convention that the official text mentions. The pages we read do not define a sporadic absence or living habitually, and they do not say how a home is weighed in the economic test or whether a let home is at your disposal. Where a sentence above depends on one of these, it says so.

§ 9Questions to put to a tax adviser

Put these in writing to an adviser who knows both countries and acts for you alone, and bring your day log.

• Counting my dated stays this year, which of the Spanish tests could reach me, and which evidence of tax residence in my other country does the agency accept?
• If I cannot show residence elsewhere, are the days I spend away added to my days in Spain?
• How would the economic test weigh my home against my work, my income and my main assets, and which change would shift that most?
• Does the family presumption cover my household, including a partner I am not married to, and how would I rebut it?
• If two countries claim me, which article of our treaty decides, and does my flat count as a permanent home at my disposal given how I use or let it?
• How is the year in which I move, or my household moves, treated in each country?
• Which returns must I file in each country for this year, and which certificate of residence should I ask for?
• If Spain treats me as resident, which duties start, including the assets-abroad declaration?

Dotted underline marks an illustrative figure. It shows how a calculation works and is not a quote, a rate or a forecast.

Tax note. Rates depend on the region, the type of property and the buyer, and they change. Figures here are dated and sourced; examples are illustrative and show their assumptions. Confirm yours with the regional tax agency or a tax adviser.