The UK finally left the European Union at the end of 2020 after four years of intense debate, not to mention much worry and confusion for the many British nationals who call Spain their home.
With UK nationals no longer considered to be EU citizens, from January 2021, certain processes and legal requirements have changed.
Since the early 60s, Brits have had a love affair with Spain with many choosing to purchase a property here to either live in permanently or use as a holiday home or investment.
Whether you were already a property owner here in Spain prior to Brexit or planning to become one in the near future, it’s important to understand how the recent Brexit changes will impact your rights around property ownership here.
Below we aim to answer some of the most important questions many people have regarding buying a property here in Spain post-Brexit.
It’s worth noting that the information below is based on current Spanish law.
Spain and the UK may well establish new agreements and processes in the near future which could potentially change things around residency rights and the other legal aspects of living or visiting Spain.
Will I still be able to buy a property in Spain?
Yes. Fortunately, your right to own a property in Spain is not based on your residency status, so it does not matter whether you are a Spanish or EU resident or not.
How will the property purchase process change?
The process of buying a property in Spain will not change for either resident or non-resident British nationals.
How will my rights now change as a result of Brexit?
As your rights of property ownership in Spain are not based on your residency status, your rights will not be affected. You will have the same rights and obligations as a Spanish national.
Will it cost me more to purchase a Spanish property?
The process and costs involved in buying a property will remain the same, regardless of your nationality or whether you are resident in Spain.
However, if you choose to rent it out, there will be a change in the amount of tax you pay.
Prior to Brexit, UK nationals had to pay 19% income tax regardless of whether they were resident in Spain or not.
However, from 2021, this increased to 24% as Spain distinguishes between EU/EEA and non-EU/EEA nationals. As British nationals are no longer part of the EU or EEA (European Economic Area), they will have to pay the same rate as non-EU citizens.
In addition to the higher tax rate, non-resident British owners will no longer be able to deduct any expenses meaning that the full gross rental income will be taxed at the 24% rate.
As an example, if you were to rent your property out for €1,000 per week for six months of the year, and accrued around €8,000 in expenses, the 24% tax rate would apply to the gross income of €24,000 and not €16,000 which would have been the case prior to 2021.
In the above example, the income tax of €5,760 would be due instead of €3,840 which would have been payable pre-Brexit.
If you were legally resident in Spain prior to the end of the transition period on December 31, your rights will be protected under the Withdrawal Agreement.
As a result, you will only be liable for the 19% tax rate on any rental income.
This would also apply to anyone who becomes a legal resident in Spain from 2021 via one of the Spanish residency visa options.
Can I still rent my property out?
Yes, you can.
All property and rental law in Spain come under the regulation of the LAU (Ley de Arrendamientos Urbanos). When a property is rented out as the main home, you are covered by the LAU.
However, holiday rental accommodations are not regulated by the LAU. Instead, it is down to the 17 individual autonomous regions to regulate the rental of these properties.
There are no current restrictions on anyone outside of Spain or the EU from renting their property out, however, in most cases you are obligated to register your property with the regional authorities.
Check out the following information about how the different autonomous regions regulate holiday rentals.
How long will I be able to stay at my property?
Unfortunately, from January 2021, there are new rules on the amount of time non-residents may stay in the country.
The new 90-day rule means that you are no longer able to stay in Spain (or the Schengen zone) for longer than 90 days in any 180 day period.
It is also important to remember that the 90 days will commence as soon as you enter the Schengen area and not when you enter Spain.
If you were to stay in France or another Schengen country prior to entering Spain, this time would also be included in the 90-day restriction.
The 90-day rule does not apply to British nationals who live permanently in Spain and have a green A4 residency certificate or one of the new TIE residence cards.
Is it possible to join two 90-day periods together?
No. Under current Spanish law, you must leave Spain and the Schengen area once your 90 days are up.
You will then have to wait 180 days from when you last entered Spain or the Schengen area before entering again.
What are the tax implications of selling my Spanish property?
The UK and Spain operate a Double Tax Treaty agreement, which covers both income and capital gains. This ensures that you do not pay tax twice in both the UK and Spain.
March 21, 2023
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Updated: March 21, 2023 CET