Will Brexit affect Brits buying homes in the EU?
According to UN figures, around 1.2 million Brits currently live elsewhere in the EU, with many located in France, Spain and Ireland.
Moneywise reports that it is unclear how the Brexit outcome of the EU referendum will affect them – or property investors considering buying in the EU – but the initial reaction from companies that specialise in marketing properties abroad is that little will change -except for a weaker sterling making it more expensive to buy overseas.
Andy Bridge, managing director of A Place in the Sun, is confident that Brits will continue to buy homes in EU countries. He says in a blog written today: “Those who are looking to purchase a holiday home overseas, after an initial hiatus, are likely to see that owning a property in the EU will only be marginally more complex than it is currently.
“Residents of the US, Canada, Russia and many other nationalities own properties throughout Europe, so while it may become slightly more complex for Brits, clearly we are not going to be prevented from owning property in Europe. “Recent research by A Place in the Sun found that nearly half (48%) of those currently considering a purchase abroad would continue with their search if we were to leave the EU. It is expected that this number will be much higher after the first few months and Brits reignite their desire to own a property overseas.”
Two years to complete purchases
Branson Atterbury, marketing director at Kristall Spaces, which specialises in developing and selling ski apartments in Austria, points out that buyers looking for a property in the EU have two years to complete their purchases while an exit strategy is planned. He says: “If Article 50 is triggered, we predict no change for the following two years as we negotiate our exit and trading relationship with the EU. Purchases before conclusion of the exit will not be affected retrospectively.
He advises: “UK buyers should always consider the sterling/euro exchange rate to ensure they negotiate a good deal when converting their currency, but there are many outside factors which affect the exchange rate and we predict sterling will strengthen once the uncertainty has been removed. “Non-EU citizens are already buying our Austrian properties: should a UK buyer’s status in Austria change once we have left the EU, non-EU citizens may buy Austrian properties through limited companies with a registered office inside the EU and there is no requirement for the shareholder to be a European citizen. “Furthermore, with 1.2 million UK citizens living in EU member states and 2.9 million EU citizens living inside the UK, we predict both the EU and UK governments will agree a fair deal for both sides without delay,” he adds.
John May, director and co-founder of Sell4LessSpain.com, says: “After a shock result in the European referendum UK property owners in Spain will now be worried about their investment and whether they will be able to sell in the short to medium term. “We expect prices to fall across the board, but there will probably be a slight correction with the expected increase in the strength of the euro against a decrease in the value of the pound.”
‘No change in buying costs’
Erna Low Property, French Alpine property specialist, reports that in the immediate fall-out from the EU referendum buyers must resist the urge to panic, as there will be no change to buyers’ conditions right now, and buyers should focus on risk assessment and limitation of potential future damage.
Its director Francois Marchand says: “We are sure that there will be no change in buying costs for those looking to buy property in France, and there are no planned changes in taxations for the income made from property rentals, as well as no difference in capital gain tax – as of 1 January 2015, a single rate was applied for EU and non-EU members.” He adds: “In time, UK residents might be limited regarding the amount of GBP investments and the amount of wealth that can be sent abroad when a new government is in. A safe investment risk strategy has always been to diversify your portfolio. “It will make no difference for our clients investing in a French property – whether they have bought, are planning to buy, or are currently in the process of buying a property in France. The mountains were there before EU existed, and will be there tomorrow to welcome any international property investors, part of the EU or not.”
(Article source: Moneywise)