Three things you need to keep in mind about Brexit and residential property markets after 1 January 2021 for British nationals
The status of UK residents looking to live or purchase a residential property in the European Union (EU) changes on 1 January 2021 as the UK’s transition period comes to an end. Kate Everett-Allen explores some of the more pressing questions being asked by clients with second homes in the EU and those looking to relocate on a permanent basis.
- Golden Visas: What will be the status of UK citizens from 1 January 2021?
As non-EU citizens, UK buyers will be permitted to apply for Golden Visa residency permits from 1 January 2021.
These initiatives, currently being offered by countries such as Portugal, Spain, Malta, Cyprus and Greece grant residency in return for a form of investment, either the purchase of a property, the creation of new jobs or the payment of a capital sum.
The visa also enables non-EU nationals to travel within the Schengen area which consists of 26 EU member state, for a maximum of 90 days in any 180-day period. The Golden Visa scheme can provide a route from temporary residency to permanent residency and ultimately citizenship.
For those looking to take advantage of the Golden Visa route to residency in 2021, research your market and be aware rules and thresholds for investment can change.
- Permanent moves: Will it be harder for UK nationals to relocate permanently to an EU country after 1 January 2021?
UK nationals looking to relocate permanently to an EU country after 1 January 2021 will be subject to the immigration rules of that country and can no longer exercise free movement.
UK nationals will need to apply for a visa, to demonstrate that they have the right to reside and work. Whilst a UK national doesn’t have to be a resident to purchase a home, on a practical level they will need a bank account and for that they will require a permanent address and therefore a visa.
For UK citizens with dual nationalities many have applied for a second passport since the Brexit referendum in 2016, enabling them to work and study in the EU post 1 January 2021. Ireland saw a record-breaking 900,000 passports issued in 2019, up more than 63,000 in 2018.
- Second Homes: Will there be limits on the amount of time you can spend at your second home in the EU post-Brexit?
For UK citizens that own a second home in the European Union, the number of days they can visit will vary from country to country but it’s unlikely limits will be less than six months per annum.
For short-term visits, individuals travelling to the EU are likely to require an electronic travel authorisation (similar to an ESTA for the US) and they will need to obtain this before travelling. The final details for the ESTA have yet to be published but it’s likely it will be valid for a set period of time and will allow unlimited visits during this time, as long as they do not exceed six months in total.
For UK citizens with second homes in the EU there are suggestions that larger mortgage deposits will be required, and potentially higher taxes imposed on rental income for non-EU residents. The likelihood is this will form part of a wider post Covid-19 debate about how to balance much needed inward investment with revenue generation.