Drawn by favourable property prices, enviable weather conditions and a privileged lifestyle, Spain has long been a favourite destination for British homebuyers seeking a new life in the sun – but with the UK’s departure from the EU looming, what does this mean for Brits purchasing property in Spain?
Certain sections of the media would have you believe that the “end is nigh” for those dreaming of a life in the sun, yet with purchases of homes in Spain by foreign citizens setting record figures, British buyers continue to top the list of overseas buyers. In fact, last year the number of British buyers in Spain increased some 16%, so what do they know that others don’t?
Purchasing property in Spain if the UK leaves with a Brexit deal
Assuming the UK leaves under the terms of a withdrawal agreement of some form, the likelihood is that there will be a two year implementation period, during which time the ability to move freely without a visa will remain unchanged. Additionally, the rights of those settled prior to the final date will be guaranteed for a full five years, after which it will be possible to apply for permanent residency.
Purchasing property in Spain if the UK leaves with no Brexit deal
You will still be able to purchase a home in Spain if there is no Brexit deal. As a non-EU citizen you do not need any additional documents to purchase a home in Spain, you will however need to apply for a visa following your purchase.
The type of visa will be dependent on how you intend to spend your time in Spain, the main options being:
Tourist visa – for those owning a holiday home
Home owners who only intend to utilise their Spanish property for holidays and short periods will simply need to apply for a regular tourist visa each time they visit. The visa allows holders to remain in the country for up to three months at a time.
Temporary Residency Visa (Non-Lucrative) – For those retiring to Spain
A temporary residency visa (non-lucrative) allows holders to remain in Spain for an entire year, after which the visa can be renewed for two year periods. After five years it will be possible to apply for permanent residency.
In order to apply it is necessary to provide evidence of 8,000€ per person to support your family, along with having private healthcare for the year and a medical certificate declaring you have no serious diseases that may prejudice public health.
Temporary Residence Visa (Lucrative) – For those working in Spain
If you are intending to work in Spain, either as an employee or self employed, a temporary residence visa (lucrative) will usually allow holders to remain in Spain for one year and is renewable thereafter. Again it will be possible to apply for permanent residency after five years. Employees will need a signed contract with an employer, to be self employed you will be required to comply with business license rules, most likely based on the minimum wage of around 600€ to 800€ per month.
For those with a job offer and a minimum annual salary of around 33,900€ an alternative option would be to apply for an EU blue card which is valid for twelve months and is renewable indefinitely.
Golden Visa – For those investing in Spain
Spain’s “Golden visa” scheme offers qualified residency in return for investments equalling either 500,000€ per applicant in property purchases, or 1€ million of bank shares or deposits in a Spanish bank account. Investors will receive a family residency which is renewable every two years and can be converted to a permanent residency after five years.
Mortgages in Spain after Brexit
For those who have already purchased property in Spain with a mortgage, there should be no change. Your bank should not be able to retroactively modify the terms of your mortgage which were established in front of a Notary.
Those planning to purchase a property in Spain after Brexit should have no problems applying for, or being granted a mortgage. Aside from citizens from countries on the Bank of Spain’s watch list (countries in which a proper viability and money laundering study cannot be carried out), a foreign resident from any country can apply for a non-residents mortgage. Therefore, as the UK is not on the watch list, British citizens will be able to access mortgages from Spanish banks after Brexit.
One element that may change in terms of Spanish banks granting mortgages to British citizens following Brexit is risk assessment. In the case of mortgage defaults, current legislation allows European banks to pursue debtors in the country of origin, however this could change following the UK’s exit from the EU and could force banks to apply the same risk assessment to British citizens as other non-EU foreign citizens. Similarly, with uncertainty regarding the UK’s economic situation following Brexit, Spanish banks may be forced to take these risks into account when granting mortgages.
As mentioned previously, British buyers are the largest overseas investors in the Spanish housing market, it would make no sense for the Spanish not to aid in the ability to purchase Spanish homes and grant mortgages for this purpose. Due to the importance of this potential market, certain Spanish banks have already stated that they will make no changes to their policies when granting mortgages to British citizens.