Residency matters explained Part 1

If you are an EU national or a citizen of the European Economic Area (EEA), that is Norway, Iceland and Liechtenstein, you may legally reside in Spain, with no formal requirement other than to apply for a residence card. Compared to the rest of the world citizens, the procedures for acquiring the legal residence will be much simpler if you are an EU or EEA national.
According to Spanish law, if you are an EU or EEA national you are entitled to enter and remain in Spain up to 90 days, with no requirement other than to carry your passport. After that 90-day period, you must ensure that you have a residence card, which will prove that you are legally residing in Spain.
On the other hand, there is some confusion about whether a residence card holder will not only become a legal resident, but also a fiscal resident. Both terms shall not be misunderstood. The residence card proves the legal residence but not necessarily the fiscal residence. In order to become a resident for fiscal purposes, you must be a resident card holder, and besides, have lived in Spain over 183 days of the fiscal year. The fiscal year in Spain starts on 1st January and ends on 31st December.
The following two requirements are essential to obtain the residence: a) To prove that you have sufficient financial resources to cover your living costs b) To have a medical insurance that covers all health risks (illness, maternity, hospitalisation, etc.). For instance, if you are a pensioner, you must prove that you receive a sufficient monthly pension that is transferred to your Spanish bank. In Spain, a monthly pension is considered to be “sufficient” when it is equivalent or above the set minimum pension. For year 2002, the government has set a minimum pension of 385.50 Euros per month.
As for the medical insurance, you only need to be covered by the Social Security of your home country or belong to a private medical insurance scheme, valid internationally. If you are covered by the Social Security of your home country you will need to obtain the European application forms (E121, E111 or E106) from the Social Security office in your home country, which entitle you to receive medical care in Spain.
But these requirements depend on the area and for example in XATIVA are no longer essential and you will need only the NIE and the certificate of the Padron (Be registry as a citizen at the townhall)
Gonzalo Blanco

Additional information