Should You Reconsider Buying a Home in Spain?
Many non-EU citizens currently own property in Spain – there’s no reason the Brexit result will stop Brits from doing the same. However, the path towards buying a home in Spain may become a bit trickier when the details of Article 50 are finalized.
The Spanish government actually welcome the flow of British expats into their property market, a number estimated to be over 750,000, who contribute greatly to the tourist industry and economy. They won’t want to deter UK residents from coming into the country, thus are unlikely to impose tough visa conditions.
Recent years have seen British demand for Spanish properties strongly increase, notably in areas such as Alicante (Costa Blanca) and Malaga (Costa del Sol), as well as the Balearics and Canaries. With a healthy English-speaking population in these areas, they’ll still make an attractive prospect for potential buyers.
Concerns over Brexit
The pound was affected heavily by the Referendum result, mainly as many financial institutions had predicted and banked upon a ‘Remain’ result. Once things settle and important political decisions are resolved, sterling is expected to make a full recovery.
Some buyers may be put off until the post-Brexit period of uncertainty fades away. However, this could be a great opportunity for new investors who’ve been previously deterred by a competitive buying market.
In terms of unrestricted travel, a visa is only required for non-EU citizens if they intend to stay in the country for over three months. It is highly unlikely holidaymakers will spend more time than this when visiting the country.
When it comes to the conditions of purchasing a Spanish property, your rights as a non-EU citizen won’t be affected too drastically. Furthermore, the cost of stamp duty and VAT will not change so new buyers should not be put off in this respect either. However, the current rate of owning a property may push the tax payment up from 19% to 24%.
Although nothing is certain as yet, the general feeling is that Britain will remain a part of the European Economic Area (EEA) so that nothing much will be altered in terms of worker’s rights and living conditions.
One area of concern is regarding the health benefits that Brits living in Spain enjoy, most of which are pensioners. Being an EU member guarantees expats healthcare privileges via the European health insurance card, something ageing expats cherish greatly. However, an EHIC agreement of some sort will be thrashed out after Brexit.
Your pensions would continue in the same way they do now, as they aren’t controlled by the EU. There are some slight concerns that a falling pound will see the value of pensions decrease. As noted previously, the performance of sterling could well regain its value as the dust begins to settle.
Buying Spanish Property
Many estate agents based on the continent who deal with British expats encourage investors to make their move into the Spanish property market whilst the UK remains in the EU. There will be at least two years before Article 50 will be invoked, leaving you plenty of time to get your foot in the door before Brexit is finalised.
Investors should also look at the Spanish property market in greater context. Despite the faltering pound value compared to the euro, house prices in Spain will still be less expensive than they were at their peak in 2007. The value remains very good.
Likewise, any negative fears about the Spanish property market should also not be taken too seriously. Brits have always flocked to Spain for its weather, accessibility and high quality of life, and will continue to do so regardless of the eventual consequences of the Referendum.