Despite concerns, expat homeowners should not worry about Brexit

There are many unknowns regarding Brexit, but one group – owners of foreign property – are unlikely to be unduly affected.

Uncertainty is the root of all worry, and the great swathe of unknowns relating to this summer’s EU In/Out referendum is causing no little concern among Brits who own a property abroad in another EU country.

A poll by overseas property brand A Place in the Sun recently found that four in 10 homeowners have concerns about their overseas property, while 90 per cent said that they are “unsure” how Brexit would affect their investment…

These concerns are understandable, but many financial and property experts have moved to assure the estimated one million Brits with property assets in the EU that a Brexit is unlikely to negatively affect their home overseas.

Due to the enormous tax and revenue benefits that foreign owners bring to a country, it is highly unlikely that freshly ex-EU citizens such as British owners would be penalised by the countries in which they own property, OverseasGuidesCompany.com editor Richard Way told the Telegraph.

“British expats, including pensioners who receive a UK income, provide a massive contribution to the local economies of their chosen countries, and generate considerable tax revenues,” Way said.

Tim Walford-Fitzgerald, a Chartered Accountant at HW Fisher & Company added that the current bilateral tax agreements between the UK and other European countries operate beyond the reach of the EU, so a Brexit would have zero impact on property owners’ tax obligations.

“Local tax treatment tends to be based on residence rather than citizenship, so the key factor would remain how long the property owner stays at the property, rather than whether they come from an EU member state or not,” he said. Of course, Brits who currently live full time and own property in Spain can do so freely as EU citizens, so the real unknown there is how Spain and other EU member states reevaluate the freedom of movement that the EU currently offers its citizens.

In terms of mortgages, while it is probably true that the extra paperwork required for non-EU citizens to obtain a mortgage in Spain will likely mean higher charges, in all likelihood Spain would look to set up an agreement with the UK to ensure that buying property is as easy after Brexit as it is currently, said Lloyd Hughes from property advisory company Athena Advisors. After all, Brits are by far the largest group of foreign investors in Spanish property, so the authorities would not wish to impede that cash stream.

“With British buyers forming such a crucial part of many overseas property markets such as France, Spain and Portugal, banks would most likely not want to mess around with the demand,” the advisor told the Telegraph.

One likely change for British expats wishing to live abroad in an EU country should Brexit come to pass is the introduction of some sort of visa system, offering non-EU nationals the right to live and work in Spain.

Currently, Brits do not have to concern themselves with such additional hassles, but despite the added paperwork, visas are by no means rare: every American, Australian, South American and, well, non-EU citizen working and living legally in Spain will have one.

However, because of the general uncertainty surrounding the possible fallout from Brexit, Brits who live abroad are being urged to register to vote in the referendum to stay in the EU in order to safeguard the lifestyles that they currently enjoy – lifestyles built upon ease of movement, shared laws and the absence of reams of red tape that make living, working and buying property in the EU so simple for all.