As deliberations about Brexit continue in the House of Commons, it raises certain questions about the impact the potential UK’s withdrawal from the EU could have on property owners in Spain.
Fortunately, both the UK and Spain have already issued some guarantees related to citizens who live in each other’s countries and further details on the future position will be known as the process continues but it is unlikely to change.
Will I still be able to buy in Spain?
There are no current restrictions nor specific requirements to be a national of one of the EU countries in order to purchase property in Spain. Based on this, future British investment in Spain should not be affected by the UK leaving the European Union and British nationals would, in the current position, be able to invest in Spain should they wish to do so.
Many clients invest in a second holiday home in the sun for their own enjoyment or seek to relocate to Spain for a better life, while others see their purchase as an investment. Spain has a lot to offer and has a great variety of tourism, from its beautiful beaches to its stunning mountains and beautiful inland areas.
One point to mention is that, as a national of an EU member state, one can enter and leave, live and work in any member states without the need to apply for any permits/licences. The post-Brexit scene leaves many questions as to the future arrangements for British nationals to enter/stay in other EU member states and for EU member states nationals to enter/stay in the UK, and this is something that surely all would hope can be resolved in the best interest of all citizens involved.
Will it be more expensive to do so?
When you purchase a property in Spain, transfer tax is payable on existing properties, while Spanish VAT and stamp duty are payable on newly built properties purchased from a developer.
The current rates for both taxes, transfer tax (Impuesto de Transmisiones Patrimoniales) and Spanish VAT (IVA) and stamp duty (Actos Jurídicos Documentados) are paid by the purchaser in any transaction and the same rates are applied regardless of the purchaser’s nationality or being a national of an EU member state.
Additional costs to be taken into account are the notarial fees (Spain being a notarial system, a notary is involved in every transaction as a public official who conveys the property) and Land Registry fees payable to the Local Registrar. All the above taxes and disbursements are payable regardless of the purchaser being a national of an EU member country or not and hence one would not expect purchasing a property in Spain post-Brexit to be more expensive.
Will I have the right to rent out a property I own in Spain?
The rental of properties in Spain is regulated by the Ley de Arrendamientos Urbanos and regional legislation by each of the 17 Autonomous Communities.
The main legislation, Ley de Arrendamientos Urbanos, covers the rental of a property as a main home and for other uses (e.g. temporary rentals) while the so-called “touristic rentals” or “vacational rentals” are regulated by each region/Autonomous Community and these touristic rentals can be heavily regulated in some areas. However these rental regulations will not affect the British after Brexit differently to any other National.
There is no current reference nor restriction related to the landlord not being an EU national and therefore, as we stand, there would not seem to be any restrictions on rentals.
What protection will I have as a UK buyer overseas?
All property transactions in Spain are completed by the signature of a deed of sale before a Notary (Spanish public official) who conveys the property, confirms the identity of the parties and gives validity to the transfer of the property.
A Notary is a public official who acts for both parties, however it is advisable to utilise the services of a good Spanish lawyer for your sale or purchase and a lawyer who speaks your native language.
I already own a property in Spain, will I be at a disadvantage if I try and sell after Brexit?
Unfortunately, we do not know exactly what the post-Brexit scenario will bring and whether future Double Tax Treaty International Agreements will be signed between both countries to resolve any issues that might arise.
The UK and Spain already have Double Treaty Agreements, one in particular related to income tax, while, for example, there is no Double Tax Treaty related to inheritance tax (IHT) (although HMRC in the UK takes into account any IHT paid in Spain).
Currently we can find different tax rates that apply to EU and non-EU nationals, related to IHT and income tax. However, tax rates are in constant change and hence it would be impossible to predict the future tax position.
In summary we can safely say that post Bexit conditions for the British in relation to all scenarios of buying and living in Spain should not change and it remains a very good time to consider buying in Spain.