My conclusion is that if you are buying or building a holiday home that may become a second retirement home, and you do not intend you work in Spain, and intend to return to the UK eventually say in your late 80s or 90s then you don’t have much to worry about.
So what is it exactly that is putting people off? After all non EU people have no problem buying property in Spain.
Non EU people have no problem buying property in Spain
The Swiss, Norwegians, Americans and citizens of many countries outside the EU, have all been buying property in Spain without problems of any kind for years. It will be just the same for Brits post Brexit but probably easier.
I believe it is most unlikely that Spain will single UK citizens out for especially unfriendly treatment not least of all because of the number of Spaniards living in the UK that would be vulnerable to reciprocal unfriendliness. The fact is that, despite Brexit, it is in everyone’s interests to cooperate.
So here is the list of what everyone is scared about:
Number one is the list itself: uncertainty
What will happen? We don’t know! That is very scary. Not a very clever reason to be scared I think you’ll agree but nonetheless the most potent and ironically the most real!
Healthcare
At the moment you are covered if you’re on holiday and if you have retired. So if healthcare arrangements change this could be a factor for anyone thinking of spending their dotage in Spain and in cases where frequent visits to hospitals may be needed. I expect most people will go back to the UK for their final years anyway or if they had some debilitating illness. In my opion reciprical healthcare arrangements will remain unchanged. A reciprocal agreement is in everyone’s interests.
Pensions
If you are drawing a pension you can draw it in the UK and transfer it over. So you carry an exchange rate risk and have to pay more in bank charges. This is probably a relatively minor risk for most people bearing in mind the other factors involved. I suppose if things are really tight and you are selling up and moving over forever this could be a factor. For expats with private pensions there will be QROPS, which are much more tax efficient than for UK residents and these are available now.
Extra Property Taxes
Although this is possibly the most scary factor I can’t think the Spanish would tax the Brits above the Swiss and Norwegians. I accept of course that a lot of mad stuff does go on in Spain but I think this one is unlikely.
The Right to Work
This is probably the most likely to change as it looks like the UK wants to restrict the EU citizen’s right to work in the UK. I am tempted to joke that this would be quite scary if there were any jobs in Spain and say having the right to work in Spain is a bit like having the right to grow oranges in Scotland but, seriously, this could have an effect on younger people’s decision to buy and build a home in Spain depending on how the rules change.
By the way if you already live here you are protected by the Vienna Convention of 1969, which says that the termination of a treaty “does not affect any right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination. In other words you carry on as before.
What about the effect on the market?
Frankly this is negligible even though UK citizens represent a significant part of the foreigners buying in Spain. And the more up market you go the less effect it has. Well-off people are not going to let pension and health care matters stand in their way.
The Attractions of Spain are Just too strong
The simple fact is that Spain is such a wonderful place to have a holiday home in and retire to that people will just put up with almost anything to be here: perfect climate, friendly host culture (democracy within the EU), first class communications, beautiful scenery beaches and mountains, great food, buzzing night life, fascinating history and culture and so on. Nowhere else gets close not France (unfriendly), not Italy (no beaches), not Greece (poor communications), not Turkey (not in the EU) or anywhere else.
Actually the market is very healthy at the moment at least for good quality property. That is beach front property, good quality buildings in up-market areas, especially with sea views and close to the coast. Good plots for building are restricted in supply and prices are going up. We will almost certainly look back and say the bottom of the market was 2015.
The Pound Has Fallen in Value
Yes is has and you have 10% less spending power than you did a few months ago. Well there always have been, and will continue to be, adjustments in the relative value of currencies. It may affect your decision at the margin but it wont stop the market beyond the short term. The new rates become the norm and people get on with it. If you are making plans to retire or enjoy your life you can’t wait for the currency market to be right. If you wait too long you’ll be dead before you’ve had a chance to enjoy it!
It’s official: Politics has become part of the entertainment industry.
We can blame Simon Cowell for all of this because all votes are now cast as if they were for a talent show. The signs were very clear when Pudsey won Britain’s got talent. Since then we have had The Donald and Brexit. So politics has become firmly part of the entertainment industry and… well… Boris and Pudsey….the differences are only superficial after all. If you’ll permit me to be flippant for a moment the best thing you can do is sit back and enjoy it!
