How will Brexit impact overseas property owners and buyers in 2021?
During 2020, Brexit trade negotiations were a fiercely contested set of campaigns, with plenty of back and forth in addition to brutal disagreements. Whilst a trade deal was eventually finalised in December, it seems uncertain as to how Brexit will impact overseas property owners and buyers in 2021.
Our currency experts at Halo Financial have gathered relevant information to consider in relation to Brexit’s impact on overseas property owners. So, whether you currently own a holiday home in the EU, or are simply thinking about investing in a property after Brexit, here is what you should know about Brexit’s impact on overseas property owners.
WHAT COULD HAPPEN TO OVERSEAS PROPERTY OWNERS AFTER BREXIT?
In multiple campaigns which have been frustratingly dominated by scaremongering tactics on both sides, immigration has been one of the major topics within Brexit discussions. There has been speculation that post-Brexit could see second homes owned by British expats in European countries being seized by governments.
The reality, however, is that those who own property legally in another EU country are protected by both the United Nations Universal Declaration of Human Rights and the European Convention on Human Rights, meaning individual property rights must be respected.
HOW COULD BREXIT AFFECT PROPERTY OWNERS?
Despite certain levels of protection, there is the possibility that governments of some EU countries could find other ways to impact British property owners, depending on their outlook of Brexit. Property taxes for British (or non-EU) owners could be increased and current deals that offer aspects such as leaseback guarantees on investment properties could also be a thing of the past.
It’s also not a complete impossibility that British nationals could suddenly find themselves in need of a special visa allowing them to visit their property for more than a certain period of each year.
The previous EU freedom of movement pact allowed British citizens to visit their property as often, and for as long, as they liked. As non-EU residents, however, the rules have since changed stating that British travellers can only remain in the Schengen area for up to 90 days within a 180-day period without a visa. Therefore, the months spent enjoying some winter sun in southern Spain could be coming to an end.
WHAT IMPACT WILL BREXIT HAVE ON OVERSEAS PROPERTY BUYERS?
Likewise, those who are yet to buy a property in the EU, but dream of one day doing so, could even need a special investment visa just to be allowed to do so. While this may seem an unlikely step, it is one that some EU governments already place on other non-EU nationals who wish to buy a property in their country.
The initial purchase of a property in somewhere like Spain or France could also suddenly become a lot more costly. Not only will Brexit almost certainly lead to increased stamp duties for British buyers (at least in some EU countries, if not all), but the decision to leave will also have a major impact on the foreign exchange markets. Changes within currency markets could then lead to mortgage availability becoming more limited.
Moreover, investors would likely find themselves suddenly receiving far fewer Euros for their Pounds, so anyone needing to make a purchase in the European currency will be adversely affected.
Of course, even though the UK left the EU on January 31st 2020, with the established trade deal taking effect from 1st January 2021, the implications of what will happen to British second homeowners in the EU (and indeed those who intend to buy a home in the Union in the future) remains to be seen.
The truth is that no one knows exactly what will happen to the EU property market in the long-term post-Brexit. Whilst British investors still have the opportunity to purchase a second home within EU countries post-Brexit, it is likely that restrictions will be imposed in 2021, but to what extent is still unknown.