Buying a holiday home post-Brexit
Impact of Brexit on owning a property overseas.
Owning a holiday home or retiring overseas still has its appeal. Whether you are attracted to sunnier climates, a cheaper cost of living, and now a WFH escape. However, Brexit and Covid-19 have made this slightly more challenging for prospective buyers and sellers. In a recent poll, we found nearly 70% of people cited Brexit as the main issue from stopping them buying a holiday home overseas.
While lockdowns and travel restrictions have hindered this industry, there have been some positive advancements in the process of buying and selling properties. You can view properties virtually from the comfort of your own home, and in Portugal, some companies have developed online methods of acquiring a NIF and setting up a bank account. Now that travel restrictions have eased, viewing a property has been made easier.
Covid-19 has also increased demand as we spend months cooked up in our homes and unable to go abroad. People are starting to reassess their priorities and lifestyles, adapting a 'life too short' or 'work from anyway' mentality. Working from home has opened up more possibilities for some. Although there may be tax implications of working from another country, it is always best to speak to a specialist.
Now there is just the issue of Brexit. You can still buy a property in the EU, for example, in Spain, France, Portugal etc. Brexit has not changed this. However, buying and selling a property in the EU post -Brexit has become slightly more complicated. There is more paperwork, and visas are required depending upon the length of your stay. The process of buying a property has marginally remained the same. Also, the cost of buying is the same for any national. You still need to pay purchase tax, notary fees, property registry fees and some other expenses. What has increased is the cost of taxation, the amount you may need to put down as a deposit on a mortgage and the impact of currency fluctuations. However, GBP/EUR is back to pre-covid levels and, using Spartan FX, a currency specialist; you could save a considerable amount of money on your transfers.
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Before Brexit, if you owned a second home in the EU, you could visit any time. As EU citizens, UK nationals could benefit from freedom of movement. Current owners and potential buyers are concerned that their way of life or potential new life could be made more difficult. Holidaymakers travelling to any EU country will still only need their passports. There is no need for a visa unless you plan to stay longer than 90 days within a 180 day period. And here's where the crux of the problem lies. Our freedom of movement has gone. However, if you plan to use your home purely as a holiday home, 90 days would be sufficient for your trips. It is more likely to affect those who wish to live or retire abroad. Many EU countries rely on tourism and foreigners to boost their economy, and owning a property is no exception. Some regions, for example, in Spain, are looking into ways to try and make the visa process more accessible, although it will take time for the changes to be seen.
Also now post- Brexit if you are living and working or retiring to an EU country, you may find that your UK bank will close your account if you do not have a UK address. Don't worry, you have two options.
1. Switch to a different UK bank
2. Spartan FX has 'named' multicurrency accounts similar to a bank account (this is a 0% interest account). Pensions can be paid directly into your account and then transferred to your European bank.
Should I still buy a property after Brexit?
Many of our customers purchase homes overseas as a lifestyle choice. Brexit should not deter you. The fundamentals haven't changed; more paperwork may be required, and you may need to acquire a visa. However, your dream of owning a holiday home or retiring overseas will have become a reality.
If you are thinking of buying a property overseas and are concerned about how Brexit will affect your payments, please get in touch. We can help to manage the cost of exchange rate fluctuations.