At the last count, there were around 750,000 UK citizens permanently semi-permanently resident in Spain. Even more own property in the country. As recently as 3 years ago, Spain’s land registry indicated that an eyebrow-raising 16.7% of all registered property in the Iberian nation is owned by British passport holders. A holiday home, an eye to a sun-kissed retirement, investment property or often a combination of all three are the most common motivations behind taking the plunge and buying property in Spain and the EU.
The weather, lifestyle, food and relative affordability of property and general living expenses in comparison to the UK mean that this country’s love affair with its southern European neighbour has proven an enduring one.
Travelling to Spain not differing much in time or expense to travelling to Scotland, or England vice versa, really tipped the balance when it came to Brits making their commitment to a love of Spain official in the form of property. Which is why, regardless of where they stand on the wider debate of if Brexit will prove to be a good thing for the UK in the long run or not, we almost all hope the final agreement inking our EU departure will mean we still have free access to visit Spain and own property there. And it’s not only Spain. UK citizens also own properties in other EU countries from France, Italy and Portugal to Bulgaria.
So what are the prospects of an agreement between the UK and EU that will allow that and the outstanding questions that still need to be answered?
The answer to this question is, happily, a clear ‘yes’. Spain’s property laws are not tied to buyers being EU citizens. This will not change with regard to Brits post-Brexit. If you have the money to pay the asking price, with or without a mortgage, you’ll still be able to buy property in Spain and the EU post-Brexit. Taxes and fees, such as notary charges, are also independent of nationality in Spain so auxiliary expenses will not change either.
Another question often asked is if UK citizens will have any restrictions placed on them with regard to renting out their Spanish property. Again, the answer is no. One small change, however, may be an increase in the tax due on rental income. This is currently set at 19% for EU citizens and 24% for non-EU citizens. The logical conclusion is that, post-Brexit, the latter will be applied to Brits renting out their Spanish property.
Across EU countries these rules tend to relatively similar and Brexit is unlikely to affect property ownership rights of UK citizens. However, do check the specifics for other countries you own or are interested in acquiring property in.
The short answer to this question is again almost certainly ‘yes’. With so many EU citizens also living and owning property in the UK, however fractious Brexit negotiations get it is practically inconceivable that there could be a scenario that would seriously limit UK passport holders spending extended periods, or living, in other EU countries. For those who have already lived in Spain for at least five years, once Brexit is finalised, you will be able to apply for an indefinite residency status termed “permiso de residencia de larga duración”.
Most other EU countries have approximate equivalents and applying should be straightforward as long as you have never been ejected from an EU country, can meet minimum income requirements (in Spain this is €799 for a family of two per month plus €266 for each additional family member), and have private medical insurance.
Depending on the final outcome of Brexit negotiations, UK citizens who have not spent five years in Spain may have to apply for residency permission, with or without working permission. The former is almost certainly to be straightforward, though likely to require demonstrating an income of around €2000 a month until the end of the fifth year. We will have to wait and see on the latter but it can be expected an employer may have to apply for permission on their non-EU (British) employee’s behalf. How strict criteria are will depend on the final Brexit deal.
And finally, despite the fact that property in Spain and most other EU countries generally offers much better value than in the UK, buying a home is always going to represent a serious financial commitment. When you get into the tens or potentially even hundreds of thousands of pounds outlay, currency rates certainly do make a difference.
Since the Brexit vote, the value of the pound has dropped against the euro. How that dynamic might change in the future, especially the longer term future, is impossible to accurately predict. It depends on both the UK and EU’s economic strength and character as well as how those fit into the wider international picture.
The currently weaker pound against the euro can be looked at in two ways. The first is that it is now slightly more expensive to buy property in Spain or elsewhere in the EU. The second is that a significant euro-denominated asset is a great hedge to have against any future further drop in the strength of the pound.
However, while currency dynamics can have a bearing on a decision to buy property in Spain and the EU, they are usually not the main consideration for buyers who are most often making a lifestyle choice. What is important if a decision to buy, or sell, a property in the EU has been made is to secure the most favourable possible exchange rate. What at first glance appears to be a small difference in the rate offered can quite easily add up to hundreds or even thousands of pounds or euro when a currency transfer involves a property transaction.
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