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Brextension – what next?

Interesting article written by Liz Rowlinson on the window of opportunity that the Brexit extension offers to Brits who want to buy in Spain.

Brextension – what does this mean for overseas property buyers?

07 May 2019

Brextension - what next for overseas property?

With the UK’s Brexit deadline extended until October 31st 2019, Liz Rowlinson asks what is happening in Spain, France and Portugal.

So Brexit is delayed. At the time of writing the Prime Minister Theresa May is having a well-earned holiday in the Welsh mountains and many of us feel like we can breathe a little easier too after the relentless rollercoaster politics in the House of Commons.

It will restart soon enough but in the meantime, British buyers have some more time to purchase abroad before anything changes, should they wish to, and British expats have further time to sort out their paperwork after the massive scramble to do so running up to March 29. 

So what has been happening in our three largest markets and what advice are the legal experts giving to British property-hunters?

Spain

Last year Britons were the biggest buyers in Spain, at 17 per cent of the foreign market. The numbers of Britons buying there increased by 12 per cent between 2017 and 2018, according to the Spanish Land Registry. Many of the attendees at our last property exhibition – at Manchester in March – indicated that they planned to move to Spain full time.

Nothing has changed as yet as far as the buying process goes. “If you wish to buy, crack on and buy,” says Alex Radford, a British-born abogado (lawyer) at My Lawyer in Spain in Marbella. “But be mindful of medical care that may be required and who will pay for it and how to access the healthcare system. Private medical insurance is available if state access is withdrawn, although this may be costly  for people with existing conditions.”

The Spanish authorities have indicated that those who resident in Spain should not lose access. On March 1, Spain approved a royal decree to adopt contingency measures in the event that the UK leaves the European Union without a deal.

This is the second initiative from the Spanish government in the Brexit arena, having signed off on a treaty with the UK in February permitting British residents in Spain to vote in and stand as candidates in the local elections on May 26.

“The royal decree covers the rights of British citizens in Spain, residency, frontier workers, recognition of professional qualifications, rules relating to access and maintenance of British workers employed by the Spanish state, access to social security, healthcare and education,  judicial co-operation, exchange of information, driving licences, transport  of merchandise and transport of bus travellers,” explains Mr Radford.

“The royal decree will come into force automatically in the event of a no deal and will be suspended if the UK do not reciprocate with similar rights to Spanish citizens living in the UK.” 

So what does this mean for Britons living in Spain? First of all, if you live in Spain for more than 183 days a year, you have a legal obligation to apply for Spanish residency and submit a tax return on worldwide assets and income the year after you become a resident. Holding a Spanish residency card will permit British nationals to travel freely across Spain. 

“Currently non-EU nationals holding a Spanish residency identity card can travel freely around Europe. If a British person had not become a resident before the UK’s exit from the EU and remained in Spain, then their continued residency will be at the discretion of the Spanish authorities. Hence the advice, if you live in Spain, is to become a Spanish resident,” says Mr Radford.

Britons who have lived in Spain legally and continuously for at least five years can apply for a long-term residency authorisation and after a further five years, they can apply for a Spanish passport.

Indeed, many of the estimated 400,000 Britons living in Spain are not properly registered and are rushing to sort out their paperwork.

“The requests for British citizens relocating to Barcelona and Madrid have increased considerably and people have been asking to arrange it as soon as possible,” says Beatriz Carro de Prada of BRS Relocation Services. “There’s been  a big rush to get NIE [tax] numbers necessary for residency applications  and [during March and April] it’s been impossible for UK citizens to get an appointment for one.”

What about access to healthcare for those only just making the move? Currently, Britons under the age of 65 who wish to apply for residency cannot access the health service and require a comprehensive medical policy as part of the residency application process.

Britons over the age of 65 have to obtain an S1 form from the UK social security department. At present this will entitle them to access Spanish healthcare. In the event of a no-deal Brexit, Spain will continue to honour these processes.

Residency is applied for at the local police station and applicants have to prove they either own or rent a property, they have sufficient income or savings to live on, they have healthcare provision in place and that they are registered on the local census. The length of the application process varies from one police station to another. However, tales of it happening in one day (in Catalonia) may be ancient history while the rush to beat the (new) Brexit deadline continues. 

In Spain, property-purchase costs are no different for EU/non-EU buyers. The latter can take advantage of the “golden visa” scheme, where residency is given with a property purchase of least €500,000 – another option for the future should we exit the EU.

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