996. It's not some tuned car that will give you problems down the road, and give you a difficult resale. A 996 will hold its value MUCH better. It's a more timeless design. The M3 looks more dated IMO. You get a shorter wheel base, better handling and AWD which is desirable with that much power. The 996's shifter has a better feel.
Despite what drewko said the Porsche actually has plenty of space. It has the rear seats, plenty of headroom, a fairly large front trunk and predrilled roof rack holes so space shouldn't be an issue.