COVID-19 and travel restrictions aside, it’s time to think about the longer-term impact of Brexit on your property in Spain. With much debate around how Brexit will affect UK holiday-goers, it’s not surprising to see property owners frustrated and confused about the increase of their more permanent residencies.
In response to the thousands of questions being raised about Brexit and its possible impact for people who own property in the EU, experts at CostaLuz Lawyers have given their insight based on what we know so far. Keith Rule from CostaLuz says, “we have been responding to plenty of queries about residency, but also about property ownership in Spain and how that is affected. We wanted to share some detail about what the future holds to ease property owners’ concerns – and those of anyone looking to buy property in Spain in 2021 as well.”
If you are looking to invest or develop property across the Channel, then you must keep reading to learn more about the potential issues Brexit could cause.
When asked if the property purchase process could change due to Brexit, Keith replied, “No, Britons who buy property in Spain will still have to follow the same purchase process.” This is good news, as potential buyers don’t have to worry about extra-lengthy paperwork or issues when purchasing a property.
With news that a 2% Stamp Duty surcharge for non-UK buyers of property in April, we have to wonder if there will be any similar financial and tax-related implications for UK residents hoping to buy property in the UK. Keith confirms that there aren’t any tax implications related to property ownership; however, the rate of non-resident income tax that British nationals have to pay has increased from 19% to 24% as of January 1st 2021. Leading tax advisory firm Blick Rothenberg suggests this is a direct result of the Brexit vote being implemented and Spain, like other EU countries distinguishing between EEA and non-EEA nationals. They also highlight how the Spanish tax authorities will no longer permit any deducted expenses, meaning the gross income will be taxed.
What about the people who already own property in Brexit? Keith suggests that their rights as a homeowner won’t be affected. He says that “property rights are never linked to residency status. All property owners in Spain have the same rights and obligations, regardless of where they are from.”
Keith also highlights how rules around staying in Spain have now also changed due to Brexit. From January 1st 20201, you are no longer able to stay for more than 90 days at a time in a 180 day period. The 90 days start as soon as you enter the Schengen Area. This means that even if you travel to Spain via France, for example, then these days count towards your total. After your 90 days end, you must leave the country and not return until 180 days have passed since the start of your last visit.
Whether it is a business trip related to acquiring or developing property or merely a stay in a home you own, you must remember these rules. Even if you own property, as of now, the 90-day rule still applies.
Keith emphasises the importance of understanding that there will be “a period of adjustment following January 1st 2021 for Britons owning property in Spain, particularly those impacted by the 90-day rule. It’s important for property owners to stay abreast of any further developments over the course of 2021 (and beyond) to ensure that they are fully aware of their rights and obligations.”