Today is an historic day in the UK, whether you agree with the outcome or not. But what, on the face of it, could it mean for property owners in the UK and Europe, given this new path we are treading?
O
verseas property investors in the UK market are either acting quickly to take advantage of buying opportunities the current fluctuating FOREX picture brings,
and getting more property for their money, or sitting on the fence until the dust settles over the coming months.
Out of the whole of the UK, London housing may well be the market that goes through the most turmoil, given its premium nature and the Cosmopolitan make-up of its workers. It has already been affected by the tax changes George Osborne introduced, prior to the Referendum.
British Investors and holiday home buyers in Europe
For those British investors in property in European countries, holiday home owners in particular, the biggest barriers have always been around language and legal system differences – which they already navigate through, with the help of agents.
A lot of the current taxation regulation, for example Double Taxation Treaties, are international in nature, not European, and so will persist. This means that Britons will continue to enjoy the assurance that they are not taxed twice on the same money and vice versa for Europeans. These agreements have already been negotiated on a country-by-country basis.
Areas that may be vulnerable to change, are domestic-specific taxes such as Inheritance Tax, which can differ in countries like Spain and France for non-EU citizens. However, we must remember the ‘law’ of reciprocity. There are European citizens living in the UK as well as Britons buying abroad, so it makes sense to ensure a fair, future, system for home owners in whichever country.
For those buying investment property in Europe, there will still be ways of doing this with existing Tax advantages, which will endure beyond BREXIT. For example there are tax-efficient, property-related, investment options in Germany, or in France in the form of managed, leaseback property.
And let’s not forget that moves to harmonise inheritance rules across Europe have only just started to be implemented, so this will not come as such a shock to British citizens, who may well just default to the British Laws on inheritance, which have always been different to countries like France or Spain.
Interestingly The Financial Conduct Authority (FCA) says Brexit will have no impact on regulation governed by EU legislation unless the Government and Parliament choose to step in. Which means consumers’ rights and protections, including any derived from EU legislation, will remain as the status quo until there is a conscious decision by government to either repeal it, or carry on with the inherited laws. The FCA is in close contact with the Treasury, the Bank of England, other UK authorities and firms supervised by the UK regulator.
It is reassuring that David Cameron has not rushed to invoke Article 50 of the Lisbon Treaty as he said he would and this gives us time to pause for thought, particularly since we now also have to contemplate a change of leader.
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Tags: BREXIT, European property, holiday home, investment property