The Brexit referendum was on June 23rd 2016 and since then I think that the worry of Brexit that affected the number of UK buyers looking to buy a property in Tenerife has subsided quite a bit since then.
There are undoubtedly a number of potential buyers still pondering the pros and cons of what Brexit might bring, so I thought that now we know a little more…or at least we’ve had time to think about what the outcomes could be…I’d look into what might happen, should Brexit actually happen.
Without going into the politics of whether the UK should have voted to stay or leave and whether in fact they’re going to go through with the actual pulling out of the EU and if they do, will it be a hard or soft Brexit, let’s just look at it from a neutral point of view.
So, let’s have a look at the list of potential concerns that people may be having about buying here in Tenerife after Brexit and see if it should be a concern at all.
Travel and access to Tenerife.
A visa to travel to Spain? This is a possibility though quite unlikely. There are currently 330.000 Brits in Spain and about 300.000 Spaniards in the UK.
As I said, it may be that post-Brexit Brits will have to apply for a visa to travel into EU countries and as such, your own home abroad…it’ll be a bit weird, but hang on…anyone who owns a property in the US or Turkey has to apply for a visa to go to visit their property there, so would that be such a big deal anyway?
Taxes such as Inheritance and Capital Gains.
We’re all in the dark about how Brexit will pan out, let’s be honest even the UK government are in the dark about it too, but after Brexit happens, there would almost certainly be an agreement that the UK would remain in the single market of the European Economic Area, so it’s likely that things would remain pretty much the same as it is now.
Apparently, the double tax treaties that Britain and Spain have between themselves won’t change. This is where people are not taxed on the same money and the reason it won’t change is because it’s nothing to do with the EU, those treaties are made with each individual country.
Could you imagine the trouble Brexit would have caused if the UK had taken on the Euro currency years ago as well???
Well thankfully, that didn’t happen and so you’re still having to think about the exchange rate, it’s no different, that won’t change.
If Brexit happens, whether you’re a holiday maker or a property buyer from the UK, you’ve always had to think about currency exchange.
First it was the Pound to Peseta and now it’s the Pound to Euro. Of course, there have been changes in the exchange rate and more so since the announcement of the Brexit decision but it’s not a serious consideration because you’ve always had to think about it anyway.
Sterling and the Euro are always up and down against each other. The Brexit announcement made massive changes to the Pound, reducing its buying power by probably 10% during the last 12 months. The thing is, if you were buying property at the announcement of Brexit, then you had a problem, as some of my buyers found out to their cost.
If you’re thinking about buying now however, you’re taking today’s Sterling figure in mind and working out if you can afford it, you’re not working on the higher rate of 18 months ago for example.
And remember, it only takes a positive announcement from government to bring the Pound back up to strength, then buying property here will look even cheaper.
The exchange rate has always been there and will never go away, so really this is no problem.
Currently, Britons travelling to any EU country can expect to receive the same health benefits as they receive in the UK.
This would have to be one of the things that the government would need to get agreed, The UK would really need to have some sort of reciprocal health agreement for Britons travelling to EU countries.
As it stands today, countries that are not in the EU such as Iceland and Norway can belong to the European Health Insurance Card system, so there’s no reason that a NON-EU United Kingdom can’t belong to it either.
Top of the list of worries for Britons has got to be uncertainty. As I mentioned earlier, even the British Government are unsure about what’s going to happen and so this is being transferred to UK citizens too.
How’s this going to affect the property market?
To be honest, the only negative thing that’s affecting it at the moment that I hear from potential buyers I’m in contact with is the uncertainty factor.
Once that’s out of the way and a decision has been made one way or the other, then UK buyers will have something to work with, they’ll know what’s going on.
The market hasn’t died down at all, in fact it’s picking up. Prices are rising fast and I feel sorry for those that going to miss out on the less expensive properties because they’re still sitting on the fence wondering if buying a property in Tenerife is going to be a mistake.
Tenerife is always going to be a hotspot for buyers. We’ve got the beaches, the mountains, shopping, nightlife, great food, history, city centres, country villages…there’s something for everyone, that’s not changing.
I’ve said it before, Tenerife or Spain in general are not going to single out Brits for bad treatment regarding taxes, visas or health care. The UK plays a massive part in Spain’s annual income, in or out of the EU, that’s not going to change.
In July of this year I helped an American couple buy a property in Callao Salvaje and in fact, just last week, I also helped a Canadian couple buy a property in La Caleta, all very simple…just the same as any UK buyer today, they were allowed NIEs, they opened a bank account without problem and have transferred funds over to complete their respective purchases…no problems at all.
Swiss, Norwegians, Americans and Ozzies have all been buying in Tenerife for years, so why not and NON-EU Britons?
I think that the main problem at the moment for buyers in a post-Brexit world is just the fact that there’s so much uncertainty about what is likely to happen in the future but as you can see from what I’ve written above, there’s very little to worry about.