Britain voted to leave the European Union in the referendum celebrated on June 23rd. What does this mean for the half a million British expats living in Spain and further, for the many thousands who own vacation homes or have other property investments here?
The short answer is not much. It is likely to take at least two years for the United Kingdom to officially leave the European Union, and probably even longer to start the actual implementation of changes in current trade and other agreements. That means that British buyers are unlikely to feel the impact for some years, if any at all.
Can British citizens still buy a property in Spain?
Of course. The United Kingdom is still a member of the European Union; British citizens’ rights are the same today as they were before the referendum. We believe British citizens will continue to enjoy the benefits of European Union citizenship for a few years to come, and we can expect a similar deal once the Brexit process is finished.
In all likelihood, Brexit will (and, has) weakened the demand for GBP and it will likely stay weak for a long period of time, since the British central bank would like to keep it low to stimulate demand for British goods.
However, note that in spite of the Brexit, a British citizen should continue to have a good buyer profile and will surely find it easier to get a mortgage to buy property in Spain than a citizen from Croatia or Poland, for example.
What will happen to a British citizen’s property when the UK leaves?
Spain has a long history of welcoming buyers from abroad. Non-EU buyers such as Russians and Americans are extremely active in the Spanish market and enjoy very similar rights to EU nationals. Leaving the European Union is highly unlikely to impact the rights of British citizens to own property in Spain. Overseas investment is too important to the Spanish economy.
And will happen with expat taxes after Brexit?
The United Kingdom and other European countries have in place bilateral tax agreements that are completely independent from European Union rules, and the same can be said about Spain. That is why we think that the tax situation affecting British citizens will not change.
Additionally, when it comes to local taxes, the process is based on residency rather than citizenship. So long the property owner is actually at the property is more relevant than whether the buyer comes from an EU member state or not.
Whilst it may be too soon to tell, our projections are for a neutral impact and the sure point being that a British property owner will have at least two years to adjust and plan. We expect a smooth transition that protects the interests of concerned parties, both the UK and Spain. Let’s not forget that the current relationship is mutually beneficial; the Spanish government will remain interested in making things work out for British citizens.