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The impact of Brexit on Spanish property owners

Tuesday 31st July 2018

Written by Mark Burns, Hopwood House

Brexit is a headache for everyone, whether you voted for it or not, and its effects are likely to be wide-reaching. If you have money based in Europe it is important to understand what the departure of the UK from the European Union is likely to have.
 
Whilst the Brexit negotiations remain somewhat of an enigma, there are plenty of things we can predict when it comes to the impact that it is likely to have.
 
Buying Spanish property
 
One question that are lot of investors keep asking is how leaving the EU will affect the property purchases they want to make in Spain. As you are not required to be an EU citizen in order to buy Spanish property, Brexit is unlikely to make this more difficult. 
 
Whether you are buying a rental property or a holiday home, you should still be able to do so with no extra barriers in place. However, where you spend your time may become more complicated as it is yet unclear how easy it will be for British nationals who live abroad to move around Europe.
 
The same is true of the prices and taxes when buying property in Spain. Transfer Tax, VAT and Stamp Duty are all payable at the same rate whether you are a member of an EU state or not. It is unlikely that this will change, so Brexit should not make buying property any more expensive than it is currently.
 
There are other fees that apply to property purchases in Spain, such as the notarial fees and Land Registry fees, but again, these are not affected by the nationality of the buyer.
 
For many investors, the main aim of buying a property in Spain is to rent it out either as a holiday home or to local residents. These types of rentals are governed under separate laws so it is important to familiarise yourself with any restrictions. These properties are not reliant on the owner being an EU national, so the Brexit impact should be minimal.
 
When you buy a property in Spain, you complete the purchase with a signature on the deed of sale before a Notario. They convey the property and give validity to the sale for both parties. If you are buying from another country, it is probably wise to instruct a lawyer who is qualified in both Spain and your country of origin in order to protect your interests.
 
Selling your property
 
When it comes to selling a Spanish property, the post-Brexit picture is less clear. It is possible that a Double Tax Treaty International Agreement will be brought in between the UK and Spain to cover any potential issues that Brexit may create. There are already some examples of different tax rates for EU nationals and those outside of the EU, so a treaty would seem the obvious solution. Some of these treaties already exist to cover Income Tax, so a precedent is already in place.
 
The Brexit effect is still very much an unknown quantity, but it seems that the future of buying Spanish property still seems bright.
 
For more information on purchasing property for sale in Spain, please contact Hopwood House.
 


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Editorial Contact Details - Conor Shilling
conor.shilling@angelsmedia.co.uk
0845 672 6000
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