Purchasing overseas property post-Brexit and COVID-19
Despite reports of tentative progress being made in Brexit trade talks, the impending December 31st deadline is looming and the UK and the EU are yet to finalise a deal.
Undoubtedly, this has sparked a significant amount of uncertainty among Britons who own a second home in the European Union and for those considering becoming overseas homeowners.
The COVID-19 pandemic has also caused prospective buyers to sharpen their perspectives, with many now opting to defer plans to move abroad due to travel restrictions and the risk the virus poses to public health.
Whether you own a holiday home, an overseas rental, or a permanent dwelling abroad, 2020 has posed challenges for all.
However, despite the widespread disruption caused by COVID-19, in the last few months, there has been a surge in overseas property searches from the UK, as government officials continue to ease restrictions.
While some homeowners have been unable to travel overseas due to travel bans being imposed in the destination country, they can now list their property on holiday letting platforms such as Airbnb and Booking.com to rent out to locals.
As a result, overseas homeowners are now thinking of new and innovative ways to pandemic-proof their home, to increase their profits while ensuring their property remains safe and secure.
If you’re a prospective buyer or considering making an international investment, avoid common pitfalls by following the simple guidelines outlined below.
Research local rules and regulations
Confirm whether the destination of your chosen property location is subject to quarantine rules and ensure you are happy with the risks that are present, such as the COVID-19 infection rate and death toll.
If quarantine is mandatory, consider any additional costs or arrangements that will need to be made during your stay.
With the UK’s post-Brexit future with the EU still uncertain, consider applying for EU citizenship before the transition period deadline to ensure your residency rights are protected going forward.
Implement new technologies to protect your property
Consider investing in new technology to enhance your property’s security – this may be particularly beneficial for those unable to travel to their destination country.
COVID-19 has taught us to be more hygienic, and as a result, antimicrobial paints and finishes, infra-red touchless taps and other technology are fast becoming a standard throughout home interiors.
More people have fit smart lights, surveillance cameras and doorbells on their property which allows remote monitoring of property when you’re away. If you are unable to install these yourself, source a trusted local provider who can set this up for you.
Social distancing procedures
If you’re considering purchasing an overseas property to generate rental income, avoid unnecessary physical interaction by swapping in-person welcomes and collections with front door codes or combination lockboxes.
While this may come at an additional cost, it will be a valuable long-term investment as it guarantees the health and safety of both you and your guests by implementing social distancing practices.
Communicate regularly with your guests and contractors via video conference, or online messaging systems, which most letting platforms tend to offer.
Sanitise your living space
Enlist the help of local cleaners or cleaning agencies to sanitise your home regularly during and post-coronavirus.
Not only will this avoid unnecessary travel for yourself but most agencies tend to have the latest chemicals capable of effectively tackling viruses such as COVID-19, which will give you greater peace of mind when welcoming new guests.
We recommend sourcing local services who will be able to clean your property frequently. Ensure that whoever you employ follows the government social distancing guidelines and that PPE and facemasks are worn at all times.
Source dedicated foreign exchange specialists
Currency exchange rate fluctuation can significantly impact your income and spending power. So, it is important that you monitor exchange rates and FX markets to maximise your currency exchange.
Most of us tend to use banks to facilitate international currency transfers; however, you could avoid being charged the high rates and fees associated with banks by using a specialist currency provider such as Halo Financial.
Halo Financial is authorised by the Financial Conduct Authority (FCA) and can offer you an advantage with same-day trade and competitive exchange rates to ensure you maximise your international money transfers.
Through proactive risk management of your currency requirements and invaluable guidance into the often-unpredictable currency market landscape, Halo Financial can help you decide on the option best suitable for your needs.
Taking all of the above into consideration, we’ve outlined several effective ways by which you can protect your profits and ensure your property remains safe and secure, despite ongoing uncertainty over Brexit negotiations and COVID-19.
However, we advise monitoring the coronavirus situation in your chosen destination country as the risk level will have a direct impact on travel restrictions and quarantine rules.
International travel rules on foreign countries
Currently, the Foreign, Commonwealth & Development Office (FCDO) advises Britons against all non-essential travel, with European countries with high infection rates such as Spain and France considered high-risk “red zones”.
Although the FCDO is not advising British internationals in high-risk countries to not return at this time, UK arrivals will also be required to self-isolate for 14 days upon return.
However, foreign governments have imposed their own rules on international travel, so those looking to buy property abroad should consider foreign travel advice and make any necessary arrangements.
Foreign travel advice for Spain
According to the FCDO, British travellers entering Spain will not be forced to quarantine on arrival but must:
- Provide the Ministry of Health Spain (MISAN) with contact details and any history of exposure to the coronavirus 48 hours before travelling via an online form
- Have their temperature monitored
- Be subject to a visual health assessment
Foreign travel advice for France
Travellers arriving in France from the United Kingdom will not be forced to quarantine, or prove that travel into France is essential; however, they must:
- Complete a “sworn” statement declaring that you are symptom-free and have not been in contact with anyone harbouring the virus in the last two weeks
- You must wear a mask in all public places, including outside spaces while in Paris and the surrounding prefects
Foreign travel advice for Canada
Canadian authorities have banned all international travel into Canada unless you are a Canadian citizen, permanent resident or an immediate family member to someone living in the country.
While these restrictions are under constant review, those considering purchasing property in Canada should be aware of the challenges this may pose.
Foreign travel advice for Australia
British travellers will be subject to a mandatory 14-day quarantine upon arrival to Australia unless an immediate family member has permitted entry without exemption until further notice, or you are returning citizen or resident.
Officials will determine exemption criteria on the reason for travel and personal circumstances. However, all other travellers will:
- Be required to self-isolate for 14-days at a designated facility and pay a fee for quarantine
- Undergo a health screening before entering quarantine, which could include a temperature check
- Have their visa application assessed concerning border measures and individual circumstances when determining entry into Australia
Leading international investment destinations
According to a real estate and property management firm, iProperty Management, Spain is the most sought-after investment destination based on annual global searches, with over 690,000 searches.
Recent statistics show that Spain is home to over 624,000 international residents and has one of the largest secondary housing markets in Europe, with approximately 10.3% of foreigners making up the country’s population as of 2019.
Spain has long been a popular destination for Britons, who accounted for approximately 69% of Spain’s expat community in 2018. Canada trailed behind in second, followed by France, Australia and Portugal, who made up for less than 7% of non-nationals in 2019.
Buying Spanish property / Moving to Europe after Brexit
While the coronavirus pandemic has adversely affected those hoping to buy property in Spain, prospective buyers will also be concerned about the challenges they face purchasing property post-Brexit.
With the future relationship between the EU and the UK still uncertain, the process for buying an overseas property could become more complicated as UK citizens will likely be treated in the same manner and as non-EU citizens.
Although many non-EU citizens successfully purchase property in Europe, where it may differ for Britons after the December 31st deadline is that their EU rights to residence, healthcare and pensions in Spain will no longer be protected.
Meanwhile, UK citizens that apply for Spanish residency after the transition period could find themselves in need of a special visa when travelling, as well as higher fees and costs.
British homeowners considering purchasing a holiday home are likely to find they are limited by the number of days they can stay in their overseas property.
However, as Spain relies heavily on tourism and its second-housing market for economic growth, we don’t expect the process to become too complicated. So, Britons looking to invest or relocate should find they are still able to fulfil those long-held dreams post-Brexit.
Recently, there has been an increase in demand for greener spaces and life outside of big cities due to lockdown.
Costa del Sol in Spain offers the perfect combination of both, with busy resorts in the heart of the city and villages just a short drive into the hills, which is ideal for those seeking a quiet life.
Prime locations in Costa del Sol
Celeste Alonso, manager of The Property Agent and Costa del Sol real estate expert, recommends Casares, Gaucin and Ronda for prospective buyers seeking quiet locations.
Casares, a village in Malaga, offers panoramic views of the Mediterranean and pristine streets lined with traditional bars and restaurants offering local delicacies.
The village sits atop a rocky outcrop and is a twenty-minute journey away from Estepona if you ever desire a more fast-paced scene.
Further north than Casares is Gaucin, a picturesque white-washed mountain village with a labyrinth of quaint streets. Gaucin boasts of local delicacies and is a half-an-hour drive from the Costa del Sol.
Ronda is also a signature white-washed village of Malaga, and the third-most visited destination in southern Spain.
Enjoy one of the most famous views in Spain over the jaw-dropping El Tajo gorge and discover one of Spain’s oldest bullrings. Ronda is also well-known for wine-making and some of the finest dining spaces on the Costa del Sol.