Gecko Towers
There is no point pretending that depending on where you come from your impetus to expend time and effort to find your chosen property, on Spain’s Costa del Sol, may be different.
If you come from the UK, the post ‘BrexitPost Bounce’ in the property market seemed underway and the ‘renewed optimism’ amongst the business community foretold growth. Then COVID 19 happened to muffle this optimism.
I am still of the opinion that UK demand for larger properties owned by empty nesters choosing downsize will continue to grow. Those in reliable work, with proven incomes against which they can raise sizable mortgages, will be keen to provide more space including gardens, perhaps in the suburbs or more countrified regions, for their growing families. Even after you have purchased the smaller UK home it should free up budget for your dream property overseas.
Some anecdotal evidence is starting to emerge from our colleague estate agents in the Marbella market who are seeing an increase in the post 50 year old purchaser, keen to buy in preparation for their retirement within the next ten years or so. The majority of these property seekers are buying with cash resources or seeking to secure small mortgages. Possibly its a question of resolve to get moving with their property ambitions and a sense of a closing window with the Brexit deadline.
Concerns about the volatility of Sterling/Euro exchange rate, that pretty much stagnated for much of the three plus years of Brexit and Global Pandemic uncertainty, is seemingly stabilizing a little, albeit at a lower rate. It’s not all over and there may well still be some shouting.
Along with a raft of other major queries over the precise status of Britain’s in Spain post-Brexit, which my gut feel is that it will take years of wrangling to understand completely, it appears one concern has been resolved. This relates to Succession and Gift Tax (SGT) – roughly equivalent to British Inheritance Tax payable on a Spanish property asset. Back in 2015 the European Court of Justice determined that Spanish SGT was discriminatory to non-residents who face materially high levels of taxation simply because they were non-residents. As a result, it seems to follow that another concern of British property buyers has been removed.
It is now clearly understood that the owners of a Spanish property can pass their property to the next generation – who may well not be Spanish residents ie. non-residents – allowing them to inherit the property and be treated in exactly the same way as a Spanish resident. For many who put hard earned funds into a Spanish property this must come as some comfort.
If you come from Sweden, an EU Member so relocation is easy, but the Krona has taken a battering in recent months so your buying power in the Spanish market may not be as it was. The last few week‘s performance and predictions for future stabilization seem to suggest a reliable exchange rate. The question is, as with all Exchange Rate dealings, when is the right time.
For all, no matter where you come from, it may take months to find you preferred property but will that coincide with the ‘right time’ to make your transfer into Euros? Talking to one of the many expert foreign exchange companies may hold some hope of minimizing your exchange rate risk of getting it wrong. If a substantial sum is required, and when wouldn’t it be for a property purchase, the ability to ‘forward buy’ your Euro currency may assist you greatly.
If you are Belgian, Dutch or French you already hail from the Eurozone so arguably your decision making is easier.
There’s an issue – the Elephant in the Room – for the otherwise keen British buyer…. Wait – haven’t we’ve just telegraphed to our European neighbours our departure from the 28, will we be welcome in Spain?
I don’t have a crystal ball, but there in excess of 125,000 Spanish nationals living in the UK. UK nationals already living in Spain contribute in material ways to the Spanish economy whether that is through employment and taxation or the ‘multiplier effect’ by spending their hard earned retirement income in Spain.
Elsewhere in this blog we have conjectured http://marbellapropertylawyers.home.blog/2020/07/01/looking-for-solutions-for-brits-buying-in-marbella-after-brexit/ as to the precise position of a British purchaser post Brexit but I take comfort from the hundreds of thousands of purchasers from the UK who already own on the Costa del Sol. I cannot believe that Spain has any vested interest in erecting barriers to entry or otherwise hamper this continued practice.
Spain has a new left wing coalition government, I cannot see any particular reason why the Spanish state would cut of its nose to spite its face when it comes to the handling of Brits wanting to settle on a temporary or permanent basis. Of course, there will be paperwork to complete – there‘s always a form to fill in – and private healthcare cover if you want to move over but I cannot see it‘s in anyone’s best interests to erect massive hurdles.
Isn’t the prize for you and your family of a good life in the Sun worth the effort? After all, it’s a lifestyle choice for many and whilst it’s never without its moments of challenge, when the reality strikes and the adrenalin in the pit of your stomach kicks in, the boost that your lives receive is so well worth it.
The decision to journey into the unfamiliar is made more comfortable by deepening your existing education. Questioning and collating as many answers as you can to the often complex scenarios that are the lives of sophisticated individuals. There are many resources to achieve this on and off line but my advice is typically to instruct professionals whose interests align with yours.
The one area where there should be simply no questions is in relation to the impartial and proactive advice that you receive from your chosen professional advisors, including specifically your Abogado. The aim being to work collaboratively so that your advisors understand exactly what you want out of your experience as you dive into the local Spanish market. You need to be assured that they are genuinely there for you looking out for and preserving only your best interests.
Should you be interested in discussing the Legal process involved in buying a property in Marbella, 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.
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.