Holiday Homes in Spain After Brexit
When Britain finalised deals with the EU and left the European Community at the end of the year-long transition period on December 31st 2020, British citizens who own holiday homes in Spain faced several changes that many do not consider advantageous.
Freedom of Movement
The most disappointing effect of Brexit for many Spanish homeowners who are UK residents was that the time they can spend in the country is now limited. With the right to freedom of movement enjoyed by EU members removed, UK nationals can now only spend up to 90 days in an EU country out of any 180. And this includes the entire EU, so if a second homeowner wants to spend 90 days at their villa in Spain, they must not travel to another EU country, i.e., Germany or France, for at least 90 days.
The restricted time limit is a blow for homeowners who own property in Spain who liked to escape the cold UK winters and live in their Spanish property between November and March. It is also frustrating for those who bought a Spanish property to use for extended periods when they retire; this won’t be possible as things stand in 2021 without becoming a Spanish resident.
The l90/180 days rule is not new legislation for UK citizens; it has been in place for decades for anyone who does not live in a UK country. Breaking this law and staying for longer has consequences. Those who remain in the EU for longer than the permitted 90 days in 180 days face fines and may even be deported. There is also the possibility of being banned from re-entering.
Taxes will also increase – before Brexit, as EU members, UK homeowners who rented their properties as holiday lets were required to pay 19% tax on rental income. Post-Brexit, this has risen to 24%.
If you do not yet own a home in Spain but are thinking of buying, you’ll be pleased to learn the buying process is much the same.
In early 2021 it isn’t easy to measure how much of an impact Brexit will have on property prices as the world is still in the middle of the COVID-19 crisis, which has far more of an effect on the economy in Spain and globally than Brexit.
The good news for would-be buyers is that the costs of buying a holiday property in Spain will not rise. You need to pay the purchase price plus the relevant fees and taxes, but these are the same regardless of your nationality.
If you want to buy a property to rent out, that is also permitted for all nationalities, but as previously mentioned, the tax rate on Spanish rental income is higher for those from non-EU countries.
Be aware that laws regarding renting to holidaymakers have changed in many regions of Spain, and most towns and cities require that you obtain a tourist rental license before letting a property. You can find properties for sale that already have a license. In some areas, rental permits can be hard to obtain, so seek professional advice before signing for a villa or apartment if renting the property is an integral part of your buying decision.
For further personalised information on buying holiday homes in Spain after Brexit, please contact us.