Buying property in Spain after Brexit is a hot topic. For those considering it, it is important to understand whether you will still have the right to buy, what the tax implications are and whether you can visit your Spanish property as you please.
Free download: Everything you need to know about buying property in Spain.
The results of Brexit have left many wondering what the future will bring. One of the questions we have been asked most frequently in recent weeks is “what is different about buying property in Spain after Brexit?”
We set out our thoughts on how Brexit would affect those Brits who were already property owners in Spain prior to Brexit in a previous article, which you can find here. In this article we consider life after Brexit for those still thinking about buying property in Spain, including:
Find out more about living in Spain after brexit.
The right to buy property in Spain is not restricted to EU citizens. Anyone who can pay the purchase price is able to purchase property in Spain. Brexit has not changed that. Many people from all corners of the world buy and own property across Spain.
Find out more about repossessed property in Spain.
The cost of buying a property in Spain is the same whether you are a Spanish national, a national of the UK, or a national of the USA or China. The costs of buying a property are not affected by your nationality.
Broadly speaking, the costs of buying a property in Spain are the purchase tax, the Notary’s fee, the property registry fee and some small miscellaneous expenses. These are the same for anyone who buys a property in Spain and is not affected by Brexit.
The effect that Brexit is having on the Spanish property market and on currency may affect the cost to you in real terms, but it has always been the case that the worldwide property market is subject to fluctuation.
For more information about the costs of buying property in Spain, please take a look at our page here which guides you through the expenses associated with a property purchase in Spain.
In Spain your right to do what you wish with a property that you own is not affected by your nationality. If you wish to buy a property in Spain to rent out, whether short term or long term, then you are still able to use the property for that purpose after Brexit, according to the rules applicable in each autonomous community.
What has changed is the rate at which you pay tax upon the rental income that you earn in Spain. EU residents pay tax on rental income in Spain at the rate of 19%. Brexit means that UK residents are obliged to pay tax at the same rate as non EU citizens, which is currently 24%.
Whereas prior to Brexit you could reduce the amount chargeable to tax by deducting allowable expenses of the rental, that is no longer possible for UK residents who will be bound to pay 24% of the gross rental income in tax.
It is important to note, however, that you will be able to set off the tax paid in Spain against your UK tax bill for the same income.
However you are taxed on income received from your Spanish property, it will remain essential that you rent out your property in accordance with the local laws. Take a look at our page on renting out your property in Spain to find out more.
As Benjamin Franklin famously said, “In this world nothing can be said to be certain, except death and taxes.” Even Brexit cannot remove the certainty that if you own property in Spain you are obliged to pay tax. As you will have seen above, an effect of Brexit is that the rate of taxation has increased.
However, many of the taxes you are obliged to pay in relation to property ownership in Spain remain unchanged.
The main taxes you will encounter as a property owner in Spain are purchase tax, IBI (similar to council tax) and VAT (called IVA in Spain), all of which are charged at the same level no matter what your nationality.
Brexit does not affect inheritance tax payable in relation to the estate of a UK resident. Whereas inheritance tax payable varies according to the autonomous community (there are 17 in Spain) in which property is located, UK residents pay inheritance tax at the same rate as Spanish residents or other EU residents.
Find out more about conveyancing in Spain.
For more information on inheritance tax in Spain, please take a look at our Succession and Probate pages here. For more up-to-date information in relatoin to inheritance tax after Brexit, please watch our video here.
Before Brexit, as EU citizens, UK nationals benefited from freedom of movement, meaning that they had the freedom to live and work in any country within the European Union, including Spain.
Many Brits took advantage of that freedom of movement in order to start a new life in Spain, or to retire to Spain. The thought that this has become difficult after Brexit is very concerning for many who are considering buying property in Spain.
It has never been necessary for UK citizens travelling to Spain for a holiday to require a visa or any other travel document than their passport. That situation has not changed.
According to the current rules, UK nationals can travel to Spain at any time as tourists, provided they do not stay longer than 90 days in any 180 day period.
If UK nationals want to stay in Spain for longer than that period, then they will need to apply for permission to do so, in respect of which please look at our moving to Spain pages here, where you can read about long term stays in Spain, or relocating to Spain. Stay tuned to our website for updates in the future by joining our mailing list below.
Given that the global COVID-19 pandemic has straddled the end of the Brexit transition period, it is difficult to gauge whether Brexit has had any real impact on Spanish property prices.
As the pandemic restrictions ease and people can once again visit Spain to view property, we will have a better idea of the effect of Brexit on Spanish property prices.
Whether you are an EU citizen or not, you still have the right to buy property in Spain after Brexit.
The costs of buying a property remain the same whatever your nationality and, broadly speaking, include purchase tax, a Notary's fee, a property registry fee and your lawyer's fees amongst other miscellaneous expenses.
Find out more about pitfalls of buying property in Spain.
If you have made the decision that owning a home in Spain is for you, Brexit need not deter you. The truth is that almost none of the fundamental aspects of buying and owning property in Spain have changed as a result of Brexit.
If you are thinking about buying property in Spain and you are concerned about how Brexit affects you, please be in contact with us. You can contact us by email at email@example.com, by telephone on 020 3478 1420 or by completing our contact form.
Find out more about selling property in Spain tax implications.