Registering as a permanent resident of Spain

People are often undecided whether they should become residents when they move to Spain, but in fact the law is quite clear - if you are an EU citizen and spend more than 3 months in Spain you are obliged to register yourself to be added to the Central Register for Foreign Nationals (Registro Central de Extranjeros). This is usually done at a local police station, but in larger cities it can be done at the Foreigner's Office (Oficina de Extranjero). If you do live most of the year in Spain you will be violating the law if you do not obtain a resident's card. A tourist from the EU can only stay a maximum of 180 days and there is a €300 fine if you overstay.

Registering for residency is not the same as Residency for tax purposes, which depends on how long you spend in Spain each year. If you spend more than 183 days per annum in Spain you will become a Spanish resident for tax purposes and will have to pay Spanish Income Tax on your worldwide income for each year, which in Spain runs from January 1 - December 31 unlike in the UK. 
Some people think that being an official Spanish resident will cost money and will attract taxes not paid by non-residents. This is not necessarily the case and there are several tax advantages for becoming a resident. For example, if you are 65 years' old or over and you have owned your home for more than three years, you are not subject to Spanish Capital Gains Tax when you sell the property. Should you be under 65, the maximum tax you will be charged will be 20 per cent (this may change!) but for non-resident it will be 35 per cent (this may also change!).
As a resident, when you sell your property you will benefit from not having five per cent of the total purchase price withheld and kept by the Spanish Tax Authorities as a guarantee against any tax liabilities you may have. There are other advantages to be taken in consideration relating to inheritance tax, wealth tax and non-resident property owner's tax.
There is another form of residency in Spain which is mandatory for anyone living in the country for more than six months in the country which is very advantageous but which many expats fail to do. This is registering your residency in the Town Hall (ayuntamiento) in the locality of your property.  You might consider this your first step to becoming integrated into Spanish life. 
The Ayuntamientos have much more powers than town halls in the UK and the Mayor of each town or village personally carries a lot of responsibility and are a very important community figure. The town halls require the inhabitants to register as they receive funds from local and central government for each citizen on the register which helps them to provide local services such as policing, maintenance, health centres and so on.
Once registered on the Padrón Municipal you are considered to be an official member of the community and this confirms your presence in the country which can be very useful. You will need the certificate of registration (Certificado de Empadronamiento) to buy or sell a car, register your child in school, to get married and to vote in council elections. Most importantly, this certificate is required to apply for your NIE card (tax number, without which you cannot buy a property) and for registering your residency as described at the beginning of this article.
It is true that it takes up time to go to the various authorities to register, but aside from the obvious legal reasons, once registered there are a lot of benefits.  A good tax lawyer can explain in full the consequences of becoming a tax resident in Spain. In any case, if you are buying a property in Spain, you will need to be registered and should do so as quickly as possible.