Brexit and it's uncertain effects

Brexit and it's uncertain effects

 

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 people invest in a second holiday home in the sun for their own enjoyment, 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.

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/licenses. 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 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. temporal rentals) while the so-called “touristic rentals” or “holiday rentals” are regulated by each region/Autonomous Community and these touristic rentals can be heavily regulated in some areas.

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 Notario (Spanish public official) who conveys the property, confirms the identity of the parties and gives validity to the transfer of the property.

A Notario is a public official who acts for both parties, hence why obtaining independent legal advice and instructing a lawyer is highly advisable.A lawyer who is qualified in both countries, Spain and the UK/your country of origin and/or residency, would be the main choice for purchasers who want to protect their interests and receive advice on their investment

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.