To quote the great Robert Burns, there is no such uncertainty as a sure thing. This sets the tone for a discussion of how things may change for Brits in respect of living, working and owning property in Spain after Brexit. We have covered the subject of Brexit in detail at various points since the referendum result in 2016 and for a long time "no change" was the mantra. Now that we are officially in the transition period, which comes to an end at the end of this year, we have reviewed what has changed and what has not, as well as what is likely to change for Brits when the transition period comes to an end.
Brexit - what will not change for Brits in Spain?
Some things will not change at all, including:
- The expense of purchasing and selling Spanish property and the process involved
- Moving funds to and from Spain
- Inheriting in Spain
Brexit - what will change for Brits in Spain?
Living and working in Spain and the ongoing ownership of property in Spain, will be most affected by Brexit:
- Taxation of rental income for non-residents
- Retiring to Spain
- Working in Spain
- Accessing healthcare in Spain
Brexit and tax for Brits in Spain
Currently, nationals of EU Member States who own property in Spain, but are not resident there, pay Spanish non-resident income tax at 19%. Nationals of third countries pay 24%. Brits may be taxed at the higher rate after the transition period. However, the liability to that tax in Spain will be set off against any liability to tax in the UK.
Brexit and residence in Spain for Brits
Provided a UK national is lawfully resident in Spain before the end of the transition period, that is by 31 December 2020, whether working in Spain or not, they will be entitled to remain in Spain in accordance with the EU rules of freedom of movement. Once a UK national has spent five years in Spain lawfully, without an interruption of more than six months (up to a year in special circumstances), they will be able to apply for permanent residence in Spain. The five year period will take into consideration any period of residence prior to the end of the transition period. After permanent residence is obtained it will be maintained, provided the UK national is not absent from Spain for more than five consecutive years. After ten years’ continuous residence the UK national will be able to apply for Spanish citizenship.
Notwithstanding an existing right of residence, Spain may require UK nationals to apply for the right of residence. That is likely to be an application for a residence card, similar to residence cards issued currently to non EU nationals. The deadline for an application for residence status must be made within six months from the end of the transition period (extended in extenuating circumstances). To be clear, UK nationals already lawfully resident in Spain prior to the end of the transition period will have a right to the residence card, but will still need to apply for it.
Family members of a UK national who is lawfully resident in Spain by the end of the transition period, whether or not the family members are UK or EU nationals, will have a right to remain in Spain. Their right will not lapse upon the death of the UK national Spanish resident.
What constitutes lawful residence in Spain for a British national? An EU national has a right to remain in a host country within the EU for three months. Beyond that period an EU national may remain in Spain provided either they are working there (employed, or for themselves), can support themselves, or are studying there. Hence, the right of a UK national to remain in Spain beyond the end of the transition period will depend on them complying with the rules of freedom of movement. The same will apply to the family members of a UK national, whether or not the family members are British, or nationals of an EU Member State.
Those who do not reside lawfully in Spain prior to the end of the transition period, but who later wish to live there, will be able to apply to do so. Prior to Spain’s accession into the EC in 1986 there were a great many Brits who lived and worked lawfully in Spain. Although the right to reside would not be guaranteed, it will become reality for a great many Brits who will certainly find a legitimate route to pursuing a life in the sun.
Brexit and accessing healthcare in Spain for Brits
As to healthcare, if you are a British national living in Spain, or if you move there permanently before the end of the transition period, you will have life-long healthcare rights in Spain as you do now, provided you remain resident in Spain. That is the published advice of the British government. Very importantly, the right of healthcare for UK pensioners intending to remain in Spain beyond the end of the transition period will not be affected and the EU Regulations will continue to apply to you in that regard. That is the published advice of the Spanish government.
If you are affected by Brexit and you want to take steps to protect your position in Spain, we can assist. Contact us on 020 3478 1420, by email at email@example.com or by completing our contact form.
First published in the A Place in the Sun magazine, Spring 2020 issue.