How is Brexit going to affect me buying a property in Tenerife?

As Theresa May’s Brexit deals have flopped over and over again, property investors are not losing sleep over it.

Even though new homeowners are choosing to assume a wait-and-see attitude in the UK, experienced property buyers are still buying property outside of the UK.

Tenerife in Spain is one of the real estate property hot spots attracting countless Brits and other nationalities.       

Those hesitating have their reasons, UK property prices have dropped significantly, but as time has run out for Brexit and there’s now a Brextension, more and more holiday home buyers are restless and tired of waiting. This is especially so for buyers eyeing property in EU territories like Spain. The latter has been taking a flexible and sensible look at Brexit.   

In Tenerife, many property owners have been worried about being expelled from Spain after Brexit, I can’t see it happening…a big part of the ongoing Brexit negotiations is to protect the rights of UK citizens living in EU territories – that’s because EU citizens living in the UK will expect the same reciprocity.      

Such hospitable reciprocity might not fly well in the face of hardline Brexiteers. In the UK for instance, the pioneers’ motivation for the leave vote was so that the UK could impose restrictions on EU nationals residing in the U.K.        

Spain could be a second home for Brits Post Brexit      

Away with the political uncertainties, prospective UK property owners in Spain should have reason to feel at home even after Brexit. U.K citizens are already deeply woven into the lucrative economic fabric of Spain and the Canary Islands is flourishing with the sterling pound.  

It would be economic suicide for Spain if the Spanish government decided to implement restrictions on the rights of UK citizens to live here in Tenerife.

Another critical factor that will weigh in heavily on what happens is the fact that there are so many EU citizens living in the UK. For example, at the last count that I can find, there are 300,000 Spanish in the UK and 350.000 Brits in Spain.      

For your assurance, the Spanish government has signed a royal decree 5/2019 of 1st March, which subject to conditions and criteria, will allow UK citizens to seek legal residence, work and access national and health insurance in the country after Brexit, regardless of the type of exit deal. It should be said though that if the UK doesn’t offer a similar deal to the Spaniards that are living in the UK, then this will be revoked straight away.   

Golden EU visa for Brits that voted Stay      

For years, Spain has been awarding the Golden Visa to non-EU residents and therefore, I imagine that any Brits that wish to remain EU citizens after December 31, 2020, Spain’s residency programme is a potentially obvious offering.

The idea is that by investing 500,000 in property, you earn a residency visa that is renewable after two years.

After five years you will be eligible to apply for a permanent residency permit and remain an EU citizen even when you live in Britain.

Apart from the investment, you will have to present proof of self-employment registration or a work contract, a pension income, and a medical insurance cover.

Currently, and I can’t see this changing, UK arrivals in Spain are not liable for the state benefits of free housing until they have contributed to the economy for some time…I think it’s 6 years.

Be that is it may, for many Brits that have set their mind to live in Tenerife, the endless forms to fill are an only small price to pay for a healthy life on the islands.      

Brits are Still Top Buyers in Spain.

Brexit really doesn’t matter and it’s unlikely that it’ll have a massive effect on Brits buying here, Tenerife is an international hotspot for property investment.

This is another substantial reason why Brexit will not dampen buyer interest.

There are already many foreigners in the area, and the property prices have been and seem set to continue climbing steadily in the near future.      

For many informed Brits, owning property in Tenerife post-Brexit is still a worthwhile investment.

Many property experts will tell you that British property ownership in the Canary Island has not waned in any way but is on a steady rise.       

After the Brexit referendum in 2016, the property demand from foreigners rose by 9.4 %.

In the same period, property demand from British buyers in Spain declined by 16%.

That has since changed, in 2018, there were 7,613 purchases made by Brits in Spain between January and June.

That figure represented 14 % of all foreign property investments in Spain…Brits are still buying despite the concerns of some.

If ever there was a slight decline in the demand for Tenerife property by UK citizens, it stemmed from the sudden decline of the pound against the Euro.

Now that the pound has started to appreciate against the dollar, those fears seem to be waning and the British purchases in Tenerife are on the rise again.      

Euro – diversification could hike Tenerife property prices for Brits       

A Brexit factor that could contribute to increased property prices in Tenerife is Euro diversification.

British investors will be looking at ways they can make a secure investment in the EU to safely ride any storms the pound might have to sail through in the post-Brexit world.      

Currently, there is a high rank of property owners from all over Europe lining up to buy property in Tenerife.

You can, therefore, expect that even with whatever deal the UK walks away with from the EU, there will still be a rule of law and respect for British people and their private property in Tenerife.  

The Brits’ increased taste for Tenerife’s property is also due, in some part to the low mortgage rates and some banks that are eager to offer home financing to investors from all corners of the globe.

Rental income and capital appreciation are not the only factors. Tenerife has been a very popular settling place for many Brits over the years and there’s no reason why that’s going to stop after Brexit.       

The warm climate will continue to attract investors from the freezing corners of Europe, including the UK.

Inarguably, Spain is a beautiful place for Brits that want to retire or own a holiday home here. To that effect, whatever implications Brexit will have, most people will be ready to put up with anything to live here.

The friendly communities, fast communication systems, great food, beautiful beaches, mountains, and rich history and culture are some of the irresistible charms of Tenerife      

I think it’s safe to conclude that Brexit is likely going to cause very little effect on property sales in Tenerife and other islands in the Canary Islands. Of course, some of this will be dictated by the strength of the pound against the Euro.     

Many Brits are already buying property en-masse in Tenerife, they’ve done their research and realised themselves that not even a no-deal-Brexit can sour the deal with buying Tenerife property.