What does Brexit mean for living or buying and selling property in Spain?
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Spain has long been a firm favourite with British people. It’s close proximity to the U.K., warm weather and value for money mean it’s a real home away from home for many.
Literally, too — it is estimated about one million Brits own property in Spain and almost 400,000 live there permanently.
While the U.K. was part of the EU, having a bolthole in Spain meant you could pop over a few times a year — especially in the winter — lend it to friends whenever you wanted, for as long as you wanted and ultimately retire in another country hassle-free.
But since the U.K. left the EU last year, there’s been a cloud of uncertainty about buying or selling a home abroad — is it still worth it? Can I visit as much as I like? Can I still rent it out? Will it cost a lot more money to buy?
Here’s all you need to know.
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If I own property in Spain, can I still stay there as much as I like?
This is one of the more frequently asked questions. While the U.K. was part of the EU, there was total free movement between the countries — one of the reasons that Brits bought second homes or a place to retire in places like Spain.
Has leaving the EU changed this? In a nutshell, yes. Since January 2021, you are no longer able to stay in Spain for more than 90 days at a time in a 180-day period. And remember this goes for the whole Schengen Area, so if you go to Spain via France, for example, that time is counted towards your 90 days. It is possible to break that into two 45-day chunks if you wish, but once you have stayed 90 days in total, you can’t return until another 180 days has passed.
Will I be penalised if I overstay?
It is possible, though it depends on the country. According to Schengen Visa Info, it can also depend on how long a person has overstayed. Punishments include deportation, imprisonment, an entry ban, prolonged border checks and even a total ban of returning to the Schengen Area for up to three years.
If you wish to stay longer than 90 days, you “must meet the entry requirements set out by the country you are travelling to — this could mean applying for a visa or work permit,” according to the U.K. government website.
Can I rent my property out?
Yes, but there might be some financial implications. Currently, EU citizens pay 19% rental income but for non-EU citizens — now including Brits — the rental income tax is 24%. While this is no doubt unwelcome news, you will be able to set off the tax paid in Spain against your U.K. tax bill for the same income, advises Solicitor in Spain.
What if I want to live in Spain long-term or full-time?
You will have to apply for residency or a work visa. First-time applicants will be issued with a biometric residence card called a Tarjeta de Identidad de Extranjero (TIE). This confirms the holder’s right to live in Spain.
All the steps required to obtain residence are outlined here, but you need to be effectively living in Spain already and apply from there at your local town hall.
If you were legally residing in Spain before 1 January 2021, there will be no change to your status and if you registered as a resident before 6 July 2020, you will have a green A4 certificate or credit card-sized piece of paper — this is still a valid document and proves your rights under the Withdrawal Agreement. (The Withdrawal Agreement protects the rights of U.K. nationals and their family members who live in EU countries.)
Both a TIE and a green residency card are currently valid documents but eventually, all residents will have to switch to a TIE.
Former British Gas manager Tracy Horton Reeve, who bought a house in the Valencia region of Spain and moved there full-time from Derbyshire in October 2020 with her husband Paul, said that Brexit has created a “massive backlog” of paperwork as current residents are panicking to change their permits to a TIE — though there is no legal need right now.
Consequently, Tracy is still awaiting her confirmed residency papers after almost eight months — normally, it takes four weeks, she says.
“We deliberately made sure we moved to Valencia before Brexit as we knew the paperwork would be easier,” Tracy said. “But we are still waiting for our residency because a lot of people who have lived here for years perhaps think they need a TIE immediately — which they don’t — so local authorities are completely overwhelmed with admin and struggling with the volume of applications.
“If you’re still waiting for residency papers, be patient, as this is likely the reason,” Tracy added.
Is the residency process different post-Brexit?
Yes. There are more rules and perhaps most importantly, you need to be able to prove to the Spanish authorities that you are financially stable.
For example, anyone wishing to obtain residency status will need to show they have sufficient income to support themselves and their family. An annual income of about 25,560 euros (£21,910) in savings or guaranteed income is mandatory, and then about 6,390 euros (£5,477) for each additional dependant. You need to apply for your residency within 30 days of arriving in Spain — note if you want to work in Spain, you will need to apply for a different type of permit.
You don’t have to be a resident to buy a property. There are both temporary (up to five years) and permanent residence visas, depending on your circumstances. After all, Brits are now classed as non-Europeans, so have to abide by the same rules as an American or Japanese person wanting to move to Spain, for example.
Another big post-Brexit difference is now you also need to prove you don’t have a criminal record and have adequate health insurance.
Has Brexit affected property prices in Spain?
It is difficult to give a definitive answer about this, but on the whole — no, according to various experts. It is still considered to be a solid investment. “A Place in the Sun” presenter Laura Hamilton told the Daily Express that prices and the market are “still realistic and bubbling along nicely.”
Property Wire says that Brexit has had “no effect on prices at all” and that costs such as lawyer and notary fees are the same for EU and non-EU nationals, so no change in that department. The only issue may be the exchange rate between the pound and the euro, which constantly fluctuates — but that has always been the case.
Alison Allen, Home, Relocation & Lifestyle Finder and owner of European Bricks agrees and told TPG that “on the whole, the market is pretty stable,” but that certain people are accepting lower offers than usual due to not having residency.
“Some people are selling for less as they do not have the correct paperwork to be here over 90 days like before Brexit — so they have to leave,” Allen said. “They have possibly lived here ‘under the radar’ maybe claiming benefits, heating allowance and now all of this has stopped.”
So perhaps a good time to snap up a bargain?
Alison also said while Brexit hasn’t necessarily affected prices, COVID-19 has presented some shifts in trend. After lockdown, more people are yearning for houses with big gardens and open spaces so there is an abundance of apartments in towns and cities available.
“Depending on where you want to be ‘town-wise’ you can buy an apartment from as little as 10,000 euros (£8,500),” Allen said.
Conversely, the demand for houses with outdoor spaces is more in demand, especially after COVID, so bidding wars are happening to push more rural property prices up.
Alison advises not to expect big discounts in that particular area.
“Most properties are going for near on their asking price and I’m not seeing 20% to 40% drops,” she said. “Brexit hasn’t made interest wane at all, in my opinion. The main problem has been with COVID-19 and all the restricted travel so I am doing many more online viewings and videos of properties for clients who are ready to jump on a plane as soon as they can.”
It is also worth noting that all property transactions in Spain are completed by the signature of a deed of sale before a Notario (Spanish public official), so whether you are an EU national or not, you will have that protection as a buyer.
Has Brexit had an effect on selling property in Spain?
Like with buying, the laws and protocols remain the same but experts agree that it’s a buyer’s market since Brexit, as many ex-pats are selling up because of the aggravation of getting residency. Spain is notorious for its slow-moving bureaucracy — and many think it’s “just not worth it.”
Speaking to World in One News (WION), Spanish-based estate agent Henny Illingworth says: “Many [people] are simply selling off their properties, we actually have some properties up for sale which were previously known as ‘British swallows.’ They would come over for a few months of the year and some of those people then rent out their properties for business during the summer, some of them leave them empty.
“But now, British citizens are going to have to follow this strict 90-day rule which before they could come over for four or five months and some people are selling up because it’s just not worth it for them.”
Some tips for those thinking of relocating to Spain post-Brexit
Now more than ever, Tracy said you need to exercise patience and manage your expectations when it comes to how long things take in Spain.
“The red tape in Spain is very inconsistent and varies from situation to situation and person to person,” she said. “It can seem unnecessarily time-consuming, so try not to get frustrated. The delay in our residency is a challenge, but it’s worth it as it’s a wonderful place to retire. Don’t expect the process to be quick and be prepared for delays. You can’t hurry it along so try and go with the ‘manana’ mindset.”
Alison emphasises that doing your research before committing to moving to Spain post-Brexit is paramount.
“To be a full-time resident in Spain it is now imperative that you have the correct visa,” she said. “There is plenty of information on the U.K. and Spanish government websites and the Citizens Advice Bureau Spain is an excellent source and is easy to read and understand. If you have everything in order it should be an easy process, though it is not quick. It is still very much ‘mañana’ some days here and the bureaucracy is frustrating, to say the least!”
Another big thing to consider before moving post-Brexit is selling your car.
“Cars are now required to pay an import charge — so I would seriously consider selling yours before you come over and not leaving anything to chance,” Alison said. “Just the other day I saw six U.K.-plated cars on the roadside having been pulled over by the traffic police and a friend of mine has had her car impounded a year to the date that her U.K. MOT expired. They do have the technology and they will impound or crush your car if it doesn’t have a valid MOT.”
But are things more difficult now since Brexit?
“Not necessarily, just different,” Alison said. “It takes about three-to-six months on average and with the 90-day ruling if you need to get back to the U.K. it is harder to get back in — without required proof of residency application.”
Since Brexit came into effect, there are a lot of questions about what we can and can’t do and where we can go. Don’t be put off if moving to or buying a house in Spain is your dream. It’s still definitely possible, it will just take a bit more planning. The overwhelming message I got from writing this guide was “research, research, research” and don’t forget… manana is another day. It’ll take time.
Featured photo by Craig Wilson/EyeEm/Getty Images
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