For many industries across the UK, the lead up to June’s European Union referendum is filled with much anticipation, anxiety and speculation. With a potential Brexit just over a month away, one thing that is certain should the UK leave the EU, is that the property market both here and overseas, will alter substantially.
Since the UK joined the EU back in 1973, the number of trips made by English citizens to European destinations has increased dramatically, with hundreds of thousands of people in the UK opting not only to holiday in Europe, but to also purchase property.
The EU agreement means that tax, insurance, healthcare, travel and other important issues are made much easier for those with overseas property, but this could all change should a Brexit occur.
Entry to Europe
According to the Telegraph, property and travel experts alike believe that it is “highly unlikely” that UK citizens would need a visa to enter other EU nations despite British nationals needing a visa to enter locations not in the EU, such as Turkey and the US. This, however, could be a possibility, which would mean that property owners would also require a visa to use their property.
An agreement to resolve this issue is likely after such an exit, yet even so, this would take time and could mean months of uncertainty for the European property market.
Considering to buy
Those living in the UK who are potentially considering the option to buy property in the EU, may find it harder to get a mortgage abroad, or could be required to pay higher rates in the event of a political disunion.
In recent years, it has been cheap housing and low mortgage rates in Europe that have tempted buyers in Britain to purchase a second home, yet countries not in the EU are treated differently, unable to borrow as much as Europeans.
For example, the minimum deposit to get a mortgage in France alters from 20% for EU citizens, to 50% for those not in the EU.
Taxes
Property owners with EU citizenship currently experience tax perks, which bring a certain level of protection when owning housing in any EU country.
If the UK leaves the EU but remains as a single market, tax treatment is expected to stay the same. European Economic Area (EEA) residents, which includes Brits, get favourable treatment in Spain, where they pay the same rates of inheritance tax as locals.
But ultimately, double tax treaties agreed between the UK and EU countries would remain unaffected as the agreements which make sure people aren’t taxed twice, are made individually with each country.
Recovery of sterling
During times when the pound remained strong, British buyers benefitted massively by being able to purchase eurozone property at bargain prices. And now, as the sterling recovers, property buyers are starting to gain momentum once again.
With a Brexit potentially around the corner, there is a risk that currency could indeed fluctuate and the pound return to a weaker state. But, putting a Brexit to one side, the fortune of the pound could change anyway due to political upset or economic swings.
Health services
As it stands, Britons can visit any country within the EU and receive the same health services at the same cost as a local, should they need them. However, the future of this benefit relies completely on whether or not an exit agreement would include “reciprocal healthcare”.
There are also fears that expats and property owners will have to pay for treatment or buy health insurance, both of which could prove costly.
According to BT, this isn’t likely as the UK pays a large sum to countries in the EEA to cover the healthcare of Britons.
The Department of Health states that it reimburses other EEA countries and Switzerland for the cost of providing treatment to “people we are responsible for under European Union law, irrespective of nationality”.
