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Update 09.04.24: An announcement has been made by the leader of the Socialist Government in Spain, that his government plans to amend or repeal the “Golden Visa” legislation. Currently no timetable for these changes has been suggested and there is opposition to any revision. That said, this discourse, that started in May 2023, may result in some material changes. We will endeavour to keep you up to date with these as we are made aware of them and their precise impact.
Currently, I neither have a crystal ball nor do I have any inside intelligence from the respective government as to what may be the position of a British property buyer in Marbella after Brexit.
I believe we need to start with a given. For nearly sixty years the British have been a major force in the property market and are consistently one of the largest owning groups by nationality on the Costa del Sol. I cannot foresee a situation where it would be in anyone’s interest to rock that boat or otherwise alienate the British purchaser.
However, we must all understand that things are about to change.
For those Brits already residing on the Costa del Sol, who haven’t regularized their residency positions, they will need to. This is to ensure your health, freedom of movement, health and pension entitlements as an EU citizen. 31st December 2020 is an end stop but it would be prudent to obtain a Spanish Residencia before that.
Post 1st January 2021, I understand that a UK resident that does not have a Spanish Residencia will only be allowed to remain in Spain for a period not to exceed 90 days in any 180-day period. While for many who enjoy a nomadic existence this may well work for them, but for others wanting to put down roots in Marbella this needs far more serious consideration.
At midnight on 1st July 2020, it is understood that the deadline for extending the transition period as established in the UK/EU Withdrawal Agreement signed 24th January 2020 will expire. As a consequence of the Withdrawal Agreement, not only will the UK leave the EU but it will also leave the European Economic Area (EEA) that includes Norway. Whereas there are residency solutions for EEA members this too will be closed to the British.
To date very little detail has been released regarding the treatment of UK nationals who seek to reside in another EU country. So to some extent we need to conjure with existing details and seek to extrapolate it forward to cover the period from 1st January 2021.
So how will a would be British property owner be able to become a Spanish Resident?
As a Non-EEA national you will need to apply for to the Spanish authorities for Residency. The correct type of residency and work permit depends on your proposed intention. This is a wide and complicated subject so I going to introduce some boundaries. This piece is aimed primarily at those still working who propose to become a second home owner in the Marbella region and those who are either newly retired or plan to retire to the Costa del Sol shortly.
1. There are practical solutions that may appeal if you are an entrepreneur or high net worth individual who is minded to seeks an Investor’s Visas to allow you to settle in Spain.
To qualify for an Investor’s Visa you must be willing to purchase not less than €2m of Spanish Government Bonds or buy not less than €1m in shares in a Spanish quoted company. Alternatively, you make seek to apply under a provision of the Investor’s Visa that allows you to start a business, where the majority of voting rights are owned by the visa applicant. It will require a substantial capital investment that creates jobs, has a positive socio-economic impact or significantly contributes to scientific or technological innovation.
2. You may have heard of the Golden Visa arrangements that the Spanish Government has offered since 2013. The Global Financial Crisis, with its significant collapse in demand for Spanish properties the issuing of Golden Visas was seen as a solution.
Like all legislation these arrangements may be modified by a successive government but once granted, its comforting to note that its effect, I am told, cannot be revised retroactively.
There is a simple, yet reasonably high hurdle that need to be satisfied. You are obliged to purchase one or more properties in Spain to a total value of €500,000 exclusive of completion costs. This may be funded in cash or by mortgage borrowings from a recognized financial institution that is located outside Spain.
In a two stage arrangement the Golden Visa is initially granted for one year. Its a stamp in your passport issued by the Spanish Consulate that permits unlimited entry into Spain. During the first year of the Visa, the recipient needs to apply for Spanish Residencia that, when granted, is initially valid for two years and then renewable for five years at a time. After five years if you chose to continue to live in Spain you can apply for permanent residency, which does not need to be renewed.
If you are from a non- EEA country it effectively gives you multiple entry to each of the Schengen territories that include most of Europe. So you’d only need one visa if, for example, you chose to drive to your Spanish property through France.
I am told that these Visa take around fifty days to apply for and receive. Once issued they can be expanded to cover spouses and each of your children under eighteen years old. The property, that is the subject of the Golden Visa may be purchased by a company provided you can prove that you control the company.
There has been some discussion as to whether, in an attempt to make this arrangement more attractive, the level of €500,000 should be reduced. I have not yet seen the outcome of such discussions but will update you.
3. If the current rules relating to the Residencia in Spain of a UK national are mirrored post Brexit, and there is no guarantee that the will, they should look a little like this. Anyone wanting to stay in Spain in excess of a period of 90 days they will need to register as a Spanish resident.
It currently depends on your status as to what you will have to produce in support of your Residencia application but, for the purposes of this piece, we can divide loosely into two groups.
A. If your intention is to work in Spain you will be obliged to show that you have sufficient financial resources to ensure that you are not a burden to the Spanish State. You will require and employment contract or proof that you are appropriately registered as self employed. Upon commencing work you and your employer will be required to pay into the Spanish Social Security system. This should mean that you receive Health Cover.
If you are a retiree then you will need to demonstrate that you have reasonably sufficient income from your pensions to sustain you and your partner in Spain. You will also be required to provide proof that you have in place a comprehensive Private Health insurance, again minimizing the risk that you will become a burden to Spanish health services.
Generally, in order to satisfy the criteria for the majority of Residencia tests, you must not be in Spain illegally, have no criminal record and must not hail from a country that prohibits you from entering Spain.
It bears repeating that these are the currently available routes to Residencia in Spain. While it would seem to be a policy inconsistent with the best interests of the country these routes may alter, change or even be abolished as we progress along the road to full Brexit. I am not an expert in these complex areas but I would strongly encourage you to obtain professional advice…..and soon.
The sun will continue to shine and many Brits will prefer to pass their time on the fairways of their favourite course, under the shade of their boat’s canopy or on their preferred warm sandy beach. Wouldn’t you like to join them?
STOP PRESS (02.07.20)
I have received further information, that seems plausible, concerning an application for Residencia for a typical retiree who is not from an EEA country and is seeking to settle in Spain after Brexit. As you will not be working the application will be for a Non-Lucrative Residence Visa.
Broadly this is available for a UK resident but it must be applied for no less than 90 days prior to your intended arrival in Spain. An online application form seeking an appointment is required ahead of meeting at the Consul General’s office in London.
A variety of documents are needed, including marriage/civil partnership/medical/criminal record/private medical certificates, but each needs to benefit from a Hague Apostille which ensures they are admissible in Spain. It should be noted this can be reasonably expensive and will take time to deliver.
The income element which needs to be seriously considered is that an individual will need to prove from pensions and investments that they have a sum that grosses up for 2020 to around €26,000 annually plus a further €6,500 for each family member.
Should you be interested in discussing the legal process involved in buying a property in the Marbella region, we would be delighted to assist you. Our team of bi-lingual, highly experienced and wholly independent team of Abogados are ready to help you.
Please call me, Mark FR Wilkins, during usual business hours on +34 600 343 917 or, if you prefer, please e-mail me at mark@roslegal.es
Please note that our posts are for general interest. They are no substitute for proper legal advice tailored to your specific circumstances as provided by a qualified Abogado who is experienced in the application of the Spanish Law.
© Mark FR Wilkins 2020 All rights reserved.