We’ve Lived in Spain for Three Years – Are We Tax Resident?

Why Three Years Is Often the Turning Point

Very few people ask about Spanish tax residency in year one.

Early on:

• Life feels temporary
• Travel feels reversible
• Property feels experimental
• Income feels transitional
• No one challenges the position

Residency feels theoretical.

By year three:

• Housing is stable
• Children may be in school
• Income consistently funds life locally
• Spanish routines are predictable
• Family ties are settled

Three years does not automatically create residency.

But it frequently means the factual tests have been satisfied without formal review.

Spain does not require intention.

It requires pattern.

The 183-Day Rule – Necessary but Not Sufficient

Under Spanish domestic law, you are considered tax resident if:

You spend more than 183 days in Spain in a calendar year

Days include:

• Physical presence
• Partial days
• Periods of temporary absence unless proven otherwise

However, many expats misunderstand this rule in two ways:

1. They treat 183 days as a shield.
2. They assume staying under automatically prevents residency.

Spain’s system contains an alternative test. Many people rely heavily on the 183-day threshold as a protective line. However, remaining below 183 days does not automatically prevent residency forming under Spanish law, particularly where family ties or economic integration exist. Understanding how Spain applies the day-count test in practice helps clarify where false confidence can develop.

Centre of Vital Interests – The Substantive Test

Even if you do not exceed 183 days, Spain may treat you as resident if:

• Your centre of vital interests is located in Spain

This generally includes:

• Location of spouse and minor dependent children
• Where primary home is available
• Where economic interests are managed
• Where income supports daily life
• Where long-term routine exists

The centre of vital interests test is qualitative, not purely numerical.

It asks:

Where is your life anchored?

If your spouse and children reside permanently in Spain, Spanish law often presumes residency unless evidence shows otherwise.

This family presumption is frequently underestimated.

Registration Does Not Control Residency

A common misconception is:

“We never registered as resident.”

Spanish tax residency is not created by administrative registration.

It is created by:

• Time
• Pattern
• Family presence
• Economic integration

Registration may serve as evidence. Its absence does not negate factual residency. Many people discover this only after a trigger event.

It is common to assume that administrative status determines tax position. In reality, residency in Spain is based on factual presence and life patterns rather than registration alone. Reviewing how Spain distinguishes paperwork from substance can prevent misplaced reassurance.

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Family Presumption – The Overlooked Factor

Spanish law contains a presumption of residency where:

A spouse who is not legally separated and minor dependent children reside in Spain. This presumption can be rebutted. But it requires coherent evidence.

For families who:

• Have one spouse travelling
• Have children in Spanish schools
• Maintain a Spanish home as primary base

The centre of life test often aligns with Spain.

This is why residency issues frequently emerge several years into family settlement rather than at arrival.

UK–Spain Double Tax Treaty Interaction

For British nationals, residency may also require analysis under the UK–Spain Double Taxation Convention.

If both countries consider you resident under domestic law, the treaty tie-breaker applies sequentially:

1. Permanent home
2. Centre of vital interests
3. Habitual abode
4. Nationality
5. Mutual agreement

Treaty protection is not automatic.

It depends on:

• Coherent factual position
• Consistency of filings
• Absence of contradictory behaviour

Assuming treaty protection without technical analysis is one of the most common high-net-worth mistakes.

Dual Residency – When Both Countries Consider You Resident

Dual residency can arise when:

• You exceed 183 days in Spain
• Or vital interests are located in Spain
• While maintaining UK ties

This is especially common for:

• Business owners
• Remote professionals
• Retirees with UK pension income
• Individuals splitting time across jurisdictions

Dual residency is not illegal. But it requires structured treaty positioning.

Ignoring it compounds risk over time.

Why Silence From Spain Is Misleading

Spain does not proactively confirm your residency position.

Many people say:

“If we were resident, we would have been contacted.”

Spanish authorities typically review positions when triggered by:

• Property transactions
• Pension withdrawals
• Capital gains
• Business distributions
• Inheritance
• Exit declarations
• Information exchange under CRS

Silence usually means:

• No review has occurred
• No trigger event has intersected with your profile

It does not mean approval.

Retrospective Review – When the Past Is Examined

Spanish authorities may assess prior years when:

• You sell Spanish property
• You exit Spain formally
• Another country requests tax information
• Cross-border income is declared elsewhere
• Inheritance or capital gains arise

At that stage, they may ask:

• Where was your centre of life during those years?
• How many days were spent?
• Where was income supporting lifestyle?

If the narrative is coherent, exposure may be manageable. If the narrative is blurred, complexity increases. Physical departure does not always conclude residency exposure cleanly. In certain circumstances, time spent in Spain after leaving can still influence how prior and subsequent years are assessed, particularly where property, family, or habitual presence continues.

Who This Matters Most For

Residency review is particularly important if you:

• Have lived in Spain for more than two full calendar years
• Own Spanish real estate
• Have a spouse or children residing in Spain
• Receive foreign pension or investment income
• Operate a business while living in Spain
• Are planning a property sale
• Are considering an exit

For low-complexity, short-term stays, outcomes are often straightforward.

For multi-jurisdiction wealth, timing becomes critical.

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Common Misinterpretations

Common beliefs that frequently prove incorrect:

• “We travel frequently, so we cannot be resident.”
• “We never registered.”
• “Our income is foreign.”
• “We are under 183 days most years.”
• “Spain would have contacted us.”

Each statement can be partially true. None automatically prevents residency.

Practical Residency Review Framework

If you have lived in Spain for three years, review:

• Calendar-year day counts for each year
• Location of spouse and dependent children
• Primary residence availability
• Where income funded lifestyle
• Whether UK filings claimed non-residency
• Whether treaty tie-breaker analysis was performed

Clarity here is rarely dramatic. But delay often compounds complexity.

Why Early Clarity Is Cheaper Than Late Correction

Most people who review early discover:

• Filing alignment can be structured
• Exposure can be managed
• Future decisions can be sequenced properly

Those who delay often encounter:

• Overlapping tax claims
• Compressed exit planning
• Reduced flexibility
• Retrospective analysis under pressure

The difference is timing. Leaving Spain involves more than relocation. Formal exit steps and notification requirements can materially affect how prior years are viewed, especially if departure coincides with asset sales, pension withdrawals, or cross-border income changes.

A Simple Definition Worth Remembering

In Spain, tax residency forms through time and the centre of vital interests, not through intention or paperwork. This is why several settled years can quietly create residency before people consciously review it.