For for those of you who have always wished to purchase a property in Southern Spain, you shouldn’t let Brexit put you off.
A number of questions kept us all guessing throughout the transition period – will I still be able to buy a property in Spain after Brexit? Will it cost me more money? How many days will I be permitted to stay each year? Will I be able to rent out my property? Whilst some decisions are still being made by the Spanish government, we seek to answer many of these questions for you below….
Can I still buy a property in Spain?
Yes! The good news is that there are no specific rules that prevent British people purchasing a property in Spain post-Brexit. In fact, the popularity of Spain with British tourists means that the Spanish government positively encourages it.
But, it might take longer….
Now that we have left the European Union there is one important legal requirement that you need to be aware of when purchasing a property in certain areas of Spain. This is a requirement for all non-EU citizens looking to invest in Spanish real estate, and it relates to a decades old security law that was put in place in the 1970s.
As with any legal process, being prepared is key…
The law stipulates that any non-EU citizens purchasing property in areas of Spain considered ‘strategic defence points’ need a special permit in order to do so. The law was drafted during the Franco regime as a way to protect national security, and it affects much of Alicante and Murcia regions due to their proximity to the Cartagena naval base.
Brits who wish to purchase a property in any of these designated ‘sensitive’ zones will have to apply for a permit from Spain’s Ministry of Defence (the law may not apply to properties within established built up areas, but is likely to be required in more rural areas).
The application process can take up to six months and applicants will need to provide a Criminal Record Certificate from their country of residence, a sworn translation stamped by a notary as well as detailed plans of the property being purchased.
So does that mean it will cost me more money to buy a property in Spain after Brexit?
In short, no, the cost is more or less the same as before Brexit. Brits will continue to pay the same purchase taxes, lawyer & notary fees and other associated real estate investment costs.
There will be an additional cost for those requiring a permit from the Ministry of Defence (see above), however, this shouldn’t increase the overall cost of purchasing a property in Spain by a significant amount.
Don’t forget that (as with all FX transactions), you should always be aware of any fluctuations in the exchange rate when purchasing a property in another currency.
You can read more about the costs associated with purchasing a property in Spain in our blog post here.
How many days will I be permitted to stay in my property throughout the year?
Prior to Brexit UK citizens could benefit from freedom of movement throughout the continent, however, since 1st January 2021 British citizens are only permitted to stay in Europe for 90 days out of 180 days. This means that stays of longer than 3 months in any 6 month period are no longer permitted.
Negotiations on this matter are ongoing but it seems likely the Spanish government will agree to a relatively straightforward visa programme for British citizens wishing to stay in the country for longer periods.
The matter is a little more complicated for British people wishing to become residents in Spain, as you will need to show proof that you are either employed by a Spanish company or you are earning at least £2,000 per month.
Spain’s famous Golden Visa resident scheme is still available for non-EU citizens who are willing to make a significant investment in Spanish property.
Can I still rent out my property in Spain?
Yes absolutely, but there is a catch.
Rental income tax for non-EU citizens is 24% (for EU citizens the rate is 19%). So Brits will see a 5% increase in their annual tax bill. Prior to Brexit, it was also possible to offset the amount of tax you paid on rental income by deducting allowable rental expenses. Unfortunately, this is no longer the case.
Don’t forget that each region has its own local laws so make sure you do your homework and get the advice of a local lawyer before you rent out your property.
Has Brexit had an impact on the property market in Spain?
Given the current covid-19 pandemic and international travel restrictions it is not yet clear if Brexit has had an impact on the Spanish property market. As foreign visitors return to the continent and restrictions ease things should become clearer on this front. Spain’s property market has been in recovery in recent years so although fluctuations are to be expected, particularly in the short-term in relation to Covid-19, the long term picture continues to look positive.
