What is different about buying a property in Spain after Brexit? Am I still allowed to do it as a UK citizen and will it cost me the same? For the past months, this has been a frequently asked question that has generated tons of doubts and headaches, but in this article you will find all the answers that you need. We will explore how the real estate purchasing process has changed for Brits, and we will understand all the implications that you must make sure to consider if you are about to buy a property in the country. Some things have changed, others have not. Let’s discover which ones!
Can Brits still buy a property in Spain after Brexit?
The nationality of the buyer does not affect their capacity to purchase a property in the country.
As long as they find a seller, agree on a price, and are willing to pay that specific price, the property will be theirs.
Furthermore, the process is exactly the same (which you can find here).
Nevertheless, you may find extra difficulties when soliciting a mortgage; and the are some extra differences when it comes to taxes and other relevant issues we will explore in a second.
But your ability to purchase has not been affected after exiting the European Union. You can still buy your property in the country, and you can do it in any region you prefer.
Will it cost you more money?
No, the costs are exactly the same no matter who the buyer is or where is she from. So the only thing to consider here is the direction in which the real estate market is moving.
Also, the specific taxes and costs associated with the purchasing process are kept equal.
When buying a property, you will have to pay:
- Stamp duty
- Notary expenses (which are defined based on the number of clauses within the deed)
- Registration fees
You can find a detailed explanation of all those costs and taxes in this article, but by now you must keep in mind that the expenses associated with the transaction will be the same no matter your nationality.
Nevertheless, there is one factor that may affect the price (at least from your perspective) and that does indeed depend on Brexit: the fluctuation of the pound and Euro.
You can view here the fluctuations for the past months and years, clearly observing substantial volatility.
This volatility can modify your purchasing power and make the existing price of the property higher or lower based on the currency’s movements (which after Brexit can be noticeable).
Do I still have the right to rent out my property?
You can rent out your property, or keep it empty throughout the whole year and just visit it during specific months of the year.
You can use your property as you prefer after purchasing it, and Brexit has not affected that.
Nevertheless, what this process has affected is the taxes you will pay if you rent it out.
In one of our articles in which we talk about the main tax implications for fiscal residents and non-residents in the Spanish territory we went in-depth into this topic, but here were are going to summarize and provide the main highlights.
Let’s say you rent your property out in Spain during the year.
Before, as a European Union citizen, you just had to pay 19% tax on the income your rental generated.
But now, as a non-EU citizen, that percentage increases. You will have to pay 24% non-resident income tax (IRNR) on your rental income; and you won’t be able to deduct rental expenses.
This tax will be paid quarterly, and we suggest you contact a tax lawyer to manage your form submissions in order to avoid missing any deadline.
Is there any other difference when it comes to taxes?
Yes, and a really important one.
Because in many cases, UK citizens don’t rent out their property and they just use it when they come to Spain (usually during summer).
Well, if that is the case, you will still pay taxes, but this time on the income you would have generated if you rented out, and at a different percentage as if you still were from the EU.
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), and you will have to do it annually.
Can I still visit the country and my property regularly throughout the year?
Let’s start talking about immigration-related issues, because this is one of the legal areas that have changed and that may affect you the most.
First of all, yes, you are allowed to visit Spain and your property regularly during the year, but there are some limitations.
Same as before, you can visit for just 3 months (in a 180 day period) before applying for a regular residence permit.
And you can do that without the need to get a tourist vista (simply with a valid passport, but demonstrating you have sufficient funds to sustain yourselves during your stay in the country).
Nevertheless, if you wish to stay for longer than 90 days, things have changed.
As an EU citizen, you could easily settle in any European Union country and start living and working legally quite fast through the EU registry certificate.
But after Brexit, UK citizens can’t benefit from that free-movement agreement, and must apply for a regular residence permit.
That is more complex and involves meeting certain requirements. Here you can find a complete list of the different types of residencies and requirements for each.
Purchasing a property in order to get residency as a UK citizen
Even though Brexit creates many downsides for UK citizens wanting to move to Spain (making the vast majority of legal procedures much more tedious), not everything is bad news.
As we mentioned in the last section, if you want to stay in the country for more than 3 months you must apply for a regular residence permit.
But if you purchase a property, you can easily obtain your residency under the golden visa scheme.
This permit, the golden visa, allows you to live in the country for 2 years (with the possibility of renewing), and just requires you to visit Spain once per year (as opposed to the other residencies that request a minimum of 6 months in the country).
You only need to make sure your real estate investment is € 500.000 minimum, and this golden visa will be yours.
Nevertheless, if the investment is too high for the property you intend to buy, you can always resort to the non-lucrative visa, a great option due to its simple requirements but one that does not allow you to work.
Spanish property market after Brexit and price movements
Before the pandemic, the real estate market in Spain was expanding and growing.
The recovery phase after the 2008 crisis seemed to be a thing of the past, and investing in the country was a good option for investors worldwide.
Nevertheless, with the current health crisis things are not that stable.
Price fluctuations have taken place, especially with a tendency of falling prices.
The reduction of the purchasing power of many nationals and the lack of foreign investors (or simply expats moving to the country due to the restrictions) has reduced the demand, hence prices have fallen.
We must wait until the world’s situation recovers and turns back to normal in order to see how things turn out, but it is unlikely that the Spanish property market ceases to be a good investment opportunity for UK nationals (both willing to rent during the whole year or to stay during certain months).
Get legal assistance buying a property after Brexit
As you can see, things remain nearly the same after Brexit.
UK nationals still have it simple to purchase a property in the country, and they can even benefit from some of the initiatives created by the government to attract foreign investment (like the golden visa program).
If you have any doubt about how to go through this real estate process as a foreigner our would like our team of real estate lawyers to help you out and manage everything for you, do not hesitate to contact us.
We are at your complete disposal 24/7: