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.