Brexit can help British people living in Spain
Brexit hasn’t gone away, unfortunately, it’s just resting. The six-month extension agreed with Britain and the European Union last week could turn out to be a grand opportunity for British people living in Spain.
Two things especially need to be done – get your inheritance tax bill reduced to as low as ZERO, plus if you are waiting until after Brexit to find a house in Spain – don’t!
The Spanish property market fundamentals are in excellent shape. Nothing has changed here. Spanish Banks are lending. Property deals are being done according to our estate agent clients. The economy is good in Spain with many infrastructure projects ongoing. And access to Spain from the UK increases regularly with airports like the newly opened Corvera International, providing plenty of flights. Also the pound versus the euro is stable (in fact, sterling is still the best-performing major currency this year) and demand in Spanish property is high.
A Place in the Sun exhibition from Birmingham last month reports that if there is any worry surrounding the U.K.’s imminent exit from the EU, you can’t tell by looking at how investors are looking at Spain.
The calm reaction to the almost cliff edge Britain faced last week, shows Spanish property investors have become inured to the numerous deadlines that have come and gone. Maybe it is true and the sky is not falling after all.
If you are one of the ones waiting to buy your property in Spain, we feel now is the time to do it. As we are not estate agents, we are neutral in this situation either way.
The demand is high and usually, even in these complicated times, that meand that the price can only go one way. We can of course direct you in the right direction if you need any legal help with purchasing your property in Spain.
Right now, under European rules, all UK citizens are also EU citizens. This changes after Brexit of course.
One major benefit of being European right now in Spain is that if you own a property here, you can donate it to a family member for a fraction of the potential inheritance tax your offspring might have to pay after your time.
We have many of these “donations” over the past few months.
Now this extra 6 months means you can either;
a) Buy your home in Spain and get your paperwork/health care/residency organised by Spanish Solutions while completing the purchase in the notary.
b) As an existing owner you can arrange your inheritance tax affairs (or have Spanish Solutions do it) that mean your heirs may pay as little as zero inheritance tax after you pass away.
If you do live in Spain, here’s what you need to know:
Even at Brexit time, Spain is not asking you to leave. If you already live in Spain, (or you´ve had enough Brexit talk and you are moving here soon) it is expected you’ll be able to stay beyond 2021.
Currently, UK citizens living in Spain enjoy access to state pensions and free healthcare. Assuming the UK and Brussels agree a deal, this won’t change until at least December 2020. We have an agreement on Citizens’ Rights allowing for free movement of Europeans.
Under the current existing agreement, you almost certainly will be able to continue to live in Spain (again, I am sorry we cannot categorically say with certainty this is the case, but almost certainly is the best we can do).
UK citizens living in Spain will be able to apply for settled status (Residencia) under the current agreement. Any British person who moves to Spain before the end of the transition period, will be able to remain permanently in the country. (While avoiding Brexit chat!) with broadly the same rights as they have now. Its hard to see any reason why Spain would not want retired people to come here and continue to dump millions of euro into the local economy.
Better still – this scenario isn’t necessarily dependent on the UK agreeing a wider deal with the EU. It is true though that the UK Government can’t be certain what other countries are thinking. That why we tell our British clients to get their driving licences, pet licences, residencia, Padron, health care, inheritance tax situation etc all sorted out while you are still inside the EU.
In the event of a no-deal, (I know I’m starting to ramble here) most EU countries (especially Spain) are likely to apply most of the provisions that they would if there was a deal. So a no-deal is not that different to British people living in Spain, once they have covered their bases while they had the chance.
If you want to move to Spain after 31 December 2020, the exact status is still a little cloudy. In fact, whether you can do so or not and your exact rights will depend on the outcome of the negotiations between the UK and the EU.
This whole article can be summed up in a sentence:
If you are thinking of moving to Spain, start the process now and if you own property here already, talk to us about saving tens of thousands in tax after your time is up in Spain.