Has anything changed about buying a property in Spain after Brexit? As a UK citizen, will it cost the same and am I still allowed to do it? These have been frequently asked questions for the past months. These questions have generated tons of doubts and headaches, but you will find all the answers that you need in this article.
We will delve into how the real estate purchasing process has changed for UK citizens. Also, we will see all the implications that you must consider if you are looking to buy a property in the country. Some things have changed, let’s learn which ones!
Can UK citizens still buy a property after Brexit?
Yes, without a doubt. The buyer’s nationality does not affect their ability to buy a property in Spain After Brexit.
If they find a seller, settle on a price, and are ready to pay that price, the property will be theirs. Also, the process is the same.
Still, you can run into additional difficulties when requesting a mortgage.
Furthermore, there are certain extra differences with taxes and other related issues we will explore. But your ability to buy has not been affected after leaving the European Union. You can still get your property in Spain and do it in any area you choose.
Will it cost extra money?
No, the costs are the same regardless of where the buyer is from or who they are. So, the route in which the real estate market is going should be the only factor to take into consideration.
In addition, the taxes and costs related to the purchasing process are kept the same.
When purchasing a property, you will need to pay:
- Stamp duty
- Notary expenses
- Registration fees
It’s worth noting that the expenses related to the transaction will be the same regardless of your nationality. Nevertheless, the only factor that is related to Brexit and can affect the price from your perspective is the fluctuation of the pound and Euro.
This volatility can alter your acquiring power and make the current property price higher or lower based on the currency’s movements (which can be noticeable after Brexit).
Do I still have the right to lease my property?
After purchasing, you can use the property as you decide, we can say that buying a property in Spain After Brexit has not affected that.
You can either rent the property or keep it empty for most of the year and just visit during certain months.
Taxes when a British rent out their property
However, Brexit has affected the taxes you will pay if you rent out the property.
Let’s say you lease your property in Spain throughout the year. Before, you only had to pay 19% tax on the income generated by your rental as a European Union citizen. Now, as a non-EU citizen, you will need to pay 24% non-resident income tax (IRNR) on your rental income, and you can’t deduct rental expenses from it.
This tax will be paid four times a year. We suggest contacting a tax lawyer that manages your form submissions to avoid missing any deadlines.
When it comes to taxes, is there any other difference?
Yes, and a very important one. In many cases, UK citizens do not rent the property and just use it when visiting Spain. Even if that is the case, you will still pay taxes. However, this time you would pay a tax on the income you would have produced if you rented the property
but at a different percentage than if you were still from the EU.
This tax is paid annually, and you will pay 24% on the cadastral value of the property multiplied by 1.1% or 2% (depending on the last revision of the property).
Can I continue to visit the country and my property regularly during the year?
One of the legal areas that have changed and may affect you the most is immigration-related issues.
First, yes, you can still visit Spain and your property regularly throughout the year, but there are restrictions. Like before, you can visit for only 3 months (in 180 days) before applying for a regular residence permit. And you can do so without the requirement to have a visa (simply with a valid passport, but proving you have enough funds to support yourself through your stay).
However, things have changed if you need to stay for more than 90 days.
Before, as an EU citizen and through the EU registry certificate, you could have easily settled in any EU country and started living and working legally quite fast.
After Brexit, UK citizens must apply for a regular residence permit and can’t benefit from that free-movement agreement. That is more complicated and requires meeting specific conditions.
Buying a property in Spain After Brexit to get residency
Brexit generates several downsides for UK citizens intending to move to Spain but not everything is bad news.
As we mentioned, if you would like to stay for more than 3 months you need to apply for a regular residence permit and if you buy a property, you can easily get your residency under the golden visa scheme.
The golden visa allows you to live in Spain for 2 years, with the possibility of renewing, and only requires you to visit Spain once per year, unlike the other residencies that request a minimum of 6 months in the country.
You simply need to ensure your real estate investment is € 500.000 minimum, and this golden visa will be yours.
However, you can always resort to the non-lucrative visa if the investment is too high for the property you expect to purchase. This is a great alternative due to its uncomplicated requirements but one that does not let you work.
Spanish property market after Brexit and price movements
The real estate market in Spain was growing and expanding before the pandemic. The recovery phase after the 2008 crisis appeared to be a thing of the past and investing in the country was a good choice for investors around the world.
However, things are no longer that stable with the current health crisis. Fluctuations in prices have taken place with a special trend of falling prices. The prices have fallen due to a reduced demand that’s caused by the decrease of the buying power of many nationals and the shortage of foreign investors (or simply ex-pats moving to the country due to the restrictions).
It is unlikely that the property market in Spain stops being a good investment opportunity for UK citizens, but we must wait until the world’s situation turns back to normal to see how things turn out.
As we have discussed, things remain almost the same of Buying a property in Spain After Brexit. UK citizens still have it easy to buy a property in the country, and they can even benefit from some of the initiatives produced by the government to attract foreign investment such as the golden visa program.