Brexit is finally over and done with, and deals between the UK and the EU have been finalised. But many potential property buyers are wondering if Brexit influences buying a home in Spain. There is good news and bad; the good news is probably less has changed than you expected, with the bad news being the changes that are currently in place, will restrict you somewhat.
Now Brexit is done and dusted, British citizens retain the right to buy a property in Spain. This is a right extended to every nationality, providing the buyer can pay the purchase price and associated costs.
The Spanish government made a notable attempt with the “Golden Visa” to attract global property buyers after the 2009 worldwide recession. Many people from all parts of the world own homes in Spain. Brexit has not altered the right to buy for UK nationals.
Brexit is not likely to impact property prices; this is difficult to assess at present due to COVID-19; any impact will be more apparent once the urgency of the pandemic dies down.
Buying in Spain after Brexit taxes
Property taxes will be higher for Brits buying in Spain after Brexit than those paid by Spanish residents or EU member state nationals.
If you earn rental income from a Spanish property. as an EU resident you will have paid 19% tax on your rental income. As a now non-EU resident, you are liable for 24% of rental income. Moreover, as was permissible before Brexit, you can no longer lower your tax bill by deducting allowable costs. However, when doing your UK tax es, the tax paid in Spain can offset some of your tax bill.
Brexit has not impacted purchase tax, IBI (a council tax), and VAT payable.
Inheritance tax owed on the estate of a UK resident remains the same after Brexit. The rate payable depends only on the autonomous community where the estate is located but not on nationality.
The costs related to buying a home in Spain after Brexit have not risen for British subjects. It costs the same to purchase property, notwithstanding your country of residence.
Brexit already has, and will influence currency exchange rates between the euro and pound, which can ultimately affect how much you pay for a property. .But currency inconstancies have always existed, and you can lessen the risk of paying more due to currency exchange rates by using the services of a foreign currency dealer.
Freedom of movement post-Brexit
When reading online forums and message boards, what is causing the most discontentment for British homeowners in Spain is that they are now limited to spending only 90 out of every 180 days in the country.
Freedom of movement for British citizens in the EU is more restrictive under the new legislation. This has always been the rule in Spain for non-residents.
Is buying a property in Spain still a good idea after Brexit?
If you want to own a home in Spain, Brexit’s changes should not deter you. The essentials of buying a property in Spain have not changed significantly because of Brexit.
Moreover, we foresee more favourable conditions for UK subjects as time passes. Spain benefits from outsiders buying homes and spending time in the country, and with the financial chaos caused by COVID, they won’t want the economy to suffer even further. Here you can find information on applying for a permit to bypass the 90/180-day rule.
If you are thinking of buying a home in Spain but are concerned about new post-Brexit legislation, contact us, and we’ll address your concerns.