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Will Brexit Affect Brits Buying Homes in the EU?

Those who are looking to purchase a home overseas are likely to see that owning a property in the EU will only be marginally more complex than it is currently. Brexit will put Brits on par with the many non-EU investors from across the world who currently own property in Europe. Residents of the US, Canada, Russia and many other nationalities already own properties, so while it may become slightly more complex, clearly Brits are not going to be prevented from owning property in Europe. 

Expats and Permanent Residents

With 1.2 million UK citizens living in EU member states and 2.9 million EU citizens living inside the UK, it can be predicted both the EU and UK governments will agree a fair deal for both sides without delay, Anyone who has lived in an EU state for more than five years can apply for long-term resident status under current EU law. But your status may become more restricted than your current one as an EU citizen, and there may be ‘integration rules’ for long term residency – such as being able to speak the local language.

Holiday Home Owners

The EU could require UK citizens to apply for a visa in order to visit a country within the EU, which for holiday home owners would mean more intrusive questions about how long you were going to stay, your personal income, wealth and health cover. Additionally, there may be changes to tax laws on rental income if you operate your holiday home as a business. 

Property Ownership

UK citizens are likely to remain free to own property within the EU, as any other nationality is. For example, in France many US citizens own property there without any restrictions. The main areas of contention here is how property inheritance, taxation laws, pension payments and access to health care would apply; at the moment the rules treat EU and non-EU citizens differently. While there could be different tax treatment of non-EU nationals owning property, it would be detail at this level rather than any sort of restriction.

Two Years to Complete Purchases

The UK will officially inform Brussels they intend to leave the European Union in a few months time followed by a two-year period where the terms of our new status will be set out. The status of Brits living within the EU will be high on the agenda, as will the status of EU nationals who currently live in Britain. Once Article 50 is triggered, predictions have been made that there will be no change for the following two years as exit and trading relationships with the EU are negotiated. Purchases before conclusion of the exit will not be affected retrospectively. Buyers looking for a property in the EU have two years to complete their purchases whilst this exit strategy is being planned.

Recent research found that over half (70%) of those currently considering purchasing a property in Europe would continue with their search if we were to leave the EU. It is expected that this number will be much higher once the dust settles and any legal changes become clearer. The 'pull' factors remain the same with Brits choosing to buy property in Europe citing warmer climates, a better quality and healthier way of life and being able to afford a bigger and nicer property than they have in the UK.

The initial reaction from companies that specialise in marketing properties for sale in Europe, is that little will change, except for a weaker sterling making it more expensive to buy overseas. A degree of concern is understandable at this time and we strongly advise all buyers should take professional legal advice prior to purchase.


 

Jun 28, 2016 | 183 Page Views

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