Yes! You can still buy your dream home in Europe – here’s how
When Britain left the EU at the end of January 2020, some estate agents based in France, Spain and Portugal held their breath. They had traditionally made a living selling properties to Brits looking for sun (and snow) – would they still want to buy? Would a multitude of new regulations, varying from one country to another, put them off?
But a year later, almost all that nervousness is gone. Long before freedom of movement and residence was introduced by the Maastricht Treaty of 1992, British buyers had claimed the Spanish coasts, the Tuscan hills and the French Alps.
Back then, the process of buying property in Europe involved a lot of red tape. To a certain extent, the circle is complete: the bureaucracy is back. But with the right attitude and guidance, that doesn’t have to stop us from pursuing our dreams.
This was the case for Carol Hodgson-Brunniche, 50, based in Northumberland, and her husband, Ian Brunniche, 51. They decided to bite the bullet and buy themselves a 100-year-old stone farmhouse in Corrèze, the southernmost department of Limousin, after spending an “incredible” three weeks on holiday in France last summer.
As a pharmacist and primary care worker, Carol had put in long hours at work during the pandemic. “My husband and I dreamed of owning a vacation home in Europe that could one day be our retirement home for many years. Then the pandemic hit. It really made me think about what I wanted out of life.
“Our first thought was to buy in Italy, but we ruled that out after discovering that the cost of living there is one of the highest in Europe.”
Choose a passport
The other way around the time limit is to look at ancestry. Official figures released last year revealed that more than 420,000 Irish passports had been issued in Britain since the vote to leave the European Union; for perspective, less than 50,000 were issued in 2015.
“As soon as you have an EU passport, those residency issues go away,” adds Neilson. It makes sense for those who can take advantage of it. For now, the time limit that the Hodgson-Brunniches can spend in France is good. “But my husband is Irish on one side and Danish on the other, so we will consider getting an EU passport for him in due course,” she says.
Demand for property across Spain – traditionally the most popular country for Brits looking for holiday homes – is strong. “With the uncertainty of Brexit people are putting plans on hold for so long,” says Joanna Leverett, of estate agent Cluttons. “Now that the dust has settled, coupled with many wanting a post-pandemic lifestyle change, UK shoppers’ appetites are high.”
The buying process as a non-EU national is relatively straightforward, with one exception. Currently, anyone who buys rural property on parts of the Spanish coastline must apply for a military permit (see case study) – which surprised many. This is essential – without it the Spanish equivalent of the land register will not register the purchase, according to Will Besga, of Mallorca law. However, it is assumed that at some point the Spanish and British governments will sign a treaty to remove this anachronistic requirement.
For those seeking the golden visa route, the minimum investment is €500,000 (£422,000), but the average outlay is closer to €750,000, with over 80% choosing locations near the coast, according to figures from Sphere Estates.
As the dust settles on Brexit, accommodations are made by the French government. “The mood is more conciliatory now,” Harvey said. Recently, he announced that British citizens with accommodation in France will pay a 7.5% social levy, instead of the 17.2% social charges (social levies) when selling or renting their property.
“European and French courts ruled that the 17.2% rate had been wrongfully paid by British citizens since the United Kingdom left the European Union on January 31, 2021,” explains Kate Everett-Allen, of Knight Frank research. “Instead, the decision confirmed that social charges should not be paid by individuals if they are already contributing to the social security system of another European country.”
Challenges remain around securing financing for a property, Leverett warns. “Cash buyers are doing well, but French banks are very tricky to lend to non-EU citizens.”
The demand from Britons wishing to settle full-time in France nevertheless surprised local estate agents. “We expected the opposite to be true post-Brexit because there had been such a mad rush to get in before the deadline,” says Joanna Leggett of Leggett Immobilier. “It probably shows that cultural factors are much more important than economic or political factors.”
In practice, she adds, “it remains very easy to buy real estate in France, it is a well-regulated market, and the buyer is well protected”.
Almost half of UK buyers looking to buy in Portugal through Cluttons want to get a visa with their property. The Golden Visa program has boosted the residential property market, but it is important that buyers do their due diligence before investing, warns Robert Green of Sphere Estates. “Many properties that offer the golden visa are overpriced, so compare with others before committing. Also remember that the minimum investment required – €400,000 – is normally required net of mortgage funding.
If your stake in a Portuguese property is worth more than €600,000, you will be subject to a wealth tax of between 0.4% and 1.5% each year, depending on the value and how the property is detained. However, a relief of €600,000 per person means that couples in condominiums are only subject to this tax on properties over €1.2 million, and only on the higher value, says Jason Porter.
Alessandro Deghè, from Serimm in Lucca (who is a partner in Knight Frank), says Brexit has done nothing to dampen Britons’ enthusiasm to buy in Tuscany. “It’s the opposite: we had a strong increase in sales during the pandemic. On the contrary, among those who can afford to own a second home, the pandemic has made them more eager to buy than ever – Brexit is not an issue.
The practicalities of buying have not changed at all; there is still a lot of paperwork. The flat tax for wealthy immigrants is fueling some of the demand at the high end of the market. Introduced in 2017, it allows applicants who wish to reside in Italy a lump sum of €100,000 per year on all their non-Italian source income. The government stipulates that applicants must not have lived in Italy for nine of the last 10 years and must own or rent property in the country. “For this market segment, it has proven to be very popular,” says Deghè.