BUYING OR OWNING AFTER BREXIT
Buying or owning after Brexit: Concerned that Brexit might affect the buying process and ownership rights of Brits in Spain now the transition period has ended? To help put your mind at rest, read these answers to some of the most common questions.
No. The purchase process for Britons in Spain remains the same after Brexit as before.
No. Property rights are never linked to residency status or nationality. All owners of property in Spain have the same rights and obligations, regardless of where they are from.
There aren’t any tax implications in relation to property ownership. However, the rate of non-resident income tax that British nationals have to pay currently has increased from 19 per cent to 24 per cent from 1st January 2021. This is because Spain and other EU countries, distinguishes between EEA and non-EEA nationals.
From 1st January 2021, rules regarding the length of your stay in Spain will change. You will no longer be allowed to stay for more than 90 days at a time in any 180-day period. Note, that the 90 days starts as soon as you enter the Schengen Area. This means that if you travel to Spain via France, for example, the time you spend in France counts towards your tally of 90 days.
No. As things stand, you will be able to spend up to 90 days in Spain, after which you must leave the country. You will then not be able to return to the Schengen Area until 180 days have passed since your date of entry into Spain (or elsewhere in the Schengen Area). You can, however, divide the 90-day period into smaller chunks, for example by spending two periods of 45 days each in Spain. One option around this could be to apply for some kind of residency visa, but you will need to speak to a legal expert about the suitability of this.
Yes. Of course, Spain may introduce new legislation to favour British property-owners and allow them to spend longer periods of time in the country. However, at present the government has not announced any new rules.
No. The UK’s decision to leave the EU does not affect home ownership rights in Spain. These will continue to be the same as they were prior to Brexit.
* Note: It is possible that the situation about buying or owning after Brexit might change over the course of 2023 and beyond. We will keep you informed of changes that might affect the buying process or existing ownership.
DIFFERENCES BETWEEN BUYING IN UK AND SPAIN
Purchasing a property in Spain and in the UK entails several significant differences that potential buyers should be aware of. Here are key distinctions to consider:
LEGAL FRAMEWORK
In Spain, the legal process for property purchases involves a Notary Public, who ensures the legality of the transaction and registers it with the Land Registry. In the UK, the process involves a solicitor or conveyancer, who handles legal aspects and land registration.
PROCESS & TIMING
The property purchase process in Spain often takes longer compared to the UK due to administrative procedures and local regulations. In the UK, the process tends to be more streamlined and quicker.
PROPERTY SURVEYS
In the UK, property surveys are a standard part of the buying process to identify potential issues with the property. In Spain, surveys are less common, and buyers might need to arrange their own inspections.
FEES & TAXES
Both countries have different fee structures and taxes. In Spain, buyers need to factor in various taxes, including Transfer Tax (ITP) or Value Added Tax (VAT). In the UK, Stamp Duty Land Tax (SDLT) is a significant consideration.
OWNERSHIP COSTS
Owning a property in Spain might involve additional costs like community fees (for shared amenities) and property maintenance, all properties are subject to annual property (IBI) and rubbish (Basura) tax. The UK has similar costs, such as service charges for leasehold properties and council tax.
RESIDENCY & LEGAL RIGHT
Buying a property in Spain might offer the opportunity for residency, depending on the value of the property. In the UK, property ownership does not automatically grant residency rights.
YOU HAVE TO PAY A DEPOSIT IN SPAIN
In the UK, it’s common for house sales to fall through either because the buyer or the seller pulled out of the deal. This can happen right up until the exchange of contracts and after you’ve paid countless solicitor bills. In Spain, however, you have to pay a deposit known as compraventa in order to safeguard this from happening. This amount can be anywhere from 10 to 20 per cent of the property value, depending on what region in Spain you’re buying in. The money doesn’t go straight to the seller, however, it is kept by a legal entity until the final contract is signed.
RARE EXLUSIVITY AGREEMENT WITH ESTATE AGENTS
In Spain, sellers can register with as many different estate agents as they want in order to sell their property. This can be great for the seller, but can sometimes prove frustrating for the buyer. This is because you’ll often see the same property advertised on several different websites, and they may be advertised at different prices too. Sometimes you can find out that a property has already been sold because the seller sold it with one estate agent, but forgot to tell the others that it was no longer on the market.
It’s important to note that these differences can change over time due to legal amendments and economic conditions. Consulting with legal professionals or real estate experts in both countries is crucial to fully understand the current regulations and implications of purchasing property.
