If you want to retain your European Union rights, you need to be a legal resident of an EU nation *before* the UK leaves. With the clock ticking down to March 2019, we know that many of our readers are feeling a little panicky. Don’t panic, act! Follow our checklist to buy a property abroad before Brexit and retain your EU rights.
Every time Property Guides attends a Your Overseas Home exhibition, we hear property buyers’ fears that if they don’t buy in Spain, France, Italy, Portugal, Greece, Cyprus or any of the other EU nations by Brexit, they will lose the automatic right to live, work, claim their pensions and get affordable healthcare.
They are right to be nervous. The agreement signed in December 2017 was quite explicit in saying that if you are legally resident in “EU26” (Ireland has separate rules) then you, your spouse and your dependent family will retain your EU rights. Being “legally resident” doesn’t necessarily mean that you have to buy a property abroad to retain your EU rights. However, if you do, and you register with the local government, you are guaranteed to retain those rights.
To buy before March next year you need to be acting now. Start off by reading our “beat the Brexit deadline” checklist.
1. Raise the money
Seems obvious, but the first step in buying an overseas home is to work out what you have to spend. Sources of wealth may not be immediately obvious! For a purchase as potentially valuable as this, however, it may pay to be creative.
The most obvious source of wealth will be selling your UK home. If your overseas property purchase is dependent on this, finding a buyer for your UK property should be a number one priority. The first step is to arrange for three local estate agencies to come and value your home. They will be able to advise on what price is achievable and devise a strategy to sell this summer.
Act now and there is still time to tap into this year’s buying season. Typically, the UK’s residential property market starts to get busy around Easter-time. At that point the lesser-spotted home buyer reappears after a lull over the darker winter months. Buyers continue looking into October, except for a dip during the school summer holidays, roughly until when the clocks go back. Few of us wish to view property in the dark, and before you know it we will be into Christmas preparations. The New Year of 2019 leaves just 89 days until Brexit, which is cutting it fine.
Ideally then, you should be aiming to have accepted an offer on your UK home before the end of autumn 2018. Otherwise you risk having to accept a silly offer at the start of 2019, just to keep your pre-Brexit relocating plans alive.
2. Alternative sources of finance
Of course that is not the only way to raise money. Other options include equity release, mortgages, renting out your EU property, or buying with family or friends. To be introduced to vetted partners who can help make this happen, speak to the Property Guides resource centre on 020 7898 0549 or email [email protected]
3. Speak to a currency company
Once you have the funds in place, or a reasonable expectation that they will be forthcoming, it’s time to ascertain your property buying budget. If Brexit has taught us one thing, it’s that currencies can be highly volatile! The pound lost well over 10% after ther referendum and a similar amount after the last General Election. What would be disastrous would be to make an offer on a property, pay a deposit, then find that the pound drops in value and you cannot complete. We recommend speaking to Smart Currency Exchange. They will give you a free, no-obligation consultation and explain all your options.
Setting your buying budget, you need to know how much local currency your pounds will buy. When you register with Smart Currency Exchange you will be able to talk through your plans and budget with your own dedicated trader. To begin with, read the Property Buyer’s Guide to Currency.
4. Book a viewing trip
If you haven’t already, you need to start searching for your property. The good news is that the buying process in popular European destinations, such as Spain, France, Italy, Portugal, Greece, and Cyprus is relatively fast. So with the help of a handy estate agent and reliable independent lawyer, you could feasibly complete the purchase of your new home in just six to eight weeks after having an offer accepted, even quicker if circumstances allow.
What can take longer is finding the right property. And to do this you really need to jump on a flight as soon as possible and start viewing properties in the flesh. So if you’re still at the on-line research stage, unsure about where you want to be, you need to make some decisions! Brexit is only 10 months away…
Get organised! For a detailed plan to buy a property abroad before Brexit and retain your EU rights, read our Viewing Trip Guide. Free to download.
5. Pick your agent
Once you have decided on a destination, you should only need to deal with one estate agency, two at the most. Why? The good agencies will go and find properties that match your requirements, including those that aren’t on their own books (in the event that you buy somewhere listed with another agency, they’ll share any commission). If you are ready to take the next step and do a viewing trip, one option is to call the Property Guides team, who will save you time by matching you with an suitable estate agency.
6. Flexible moving dates
Crucially, prepare to be flexible. If you get a good enough offer in the UK sooner than you expected – and before you’ve bought abroad – and the buyer insists on a fast completion, go for it. There is always the option to rent in the UK or abroad while you search for your new place in the sun. If your overseas purchase isn’t dependent on the sale of your UK home and you plan to sell sometime in the future, beware there could be capital gains tax implications. This is because once you’ve moved into your new primary residence abroad, your UK home becomes a second home.
7. Speak to financal experts
Moving abroad before Brexit isn’t just about finding a new home. You also need to think about your financial affairs and how becoming a resident in a new jurisdiction with different tax rules could impact your personal wealth and income – and equally importantly, if there are ways to protect you from unnecessary taxation. The key to ensuring any savings, assets or investments, including pensions and ISAs, are structured in the most beneficial way possible is to speak to experts before you leave the UK. Financial planners and tax advisors always stress that re-structuring clients’ financial affairs is far harder to do once they have relocated and left the UK jurisdiction.
Similarly, don’t overlook your future currency requirements and the effects of exchange rate movement. You’ll be buying your new home in euros, which also will be become your new day-to-day currency, however right now all your savings, income and pensions are likely to be in pounds. So at some point you will need to exchange your pounds into euros and transfer them abroad, perhaps on a regular basis. Speak to currency specialist Smart Currency Exchange about your individual transfer requirements and solutions for minimising the impact of the exchange rate fluctuation.
8. Essential paperwork
Closer to your departure date, the usual organisations will need to be informed about your move abroad. These include the Inland Revenue, your bank, utilities providers, telecoms/ internet provider, doctor, DVLA, credit card providers and TV licensing. And you’ll need to think about organising a removals firm – start getting quotes a couple of months beforehand.
In terms of Brexit, an absolute must is contacting the Overseas Healthcare Team at the Department of Work and Pensions. If you are in receipt of a UK state pension, they will provide you with an S1 form which enables you to register for free reciprocal state healthcare as a resident in another EU country. Wherever you move to, this should be done as soon as possible, as should applying for residency and becoming a tax resident. Your aim is to be ‘in the system’ in your new country before Brexit occurs at the end of March 2019.
Your next action, if you haven’t already done so, will be to download the 2018 Buying Guide for your chosen country. They are free to download and include a step-by-step process for buying safely, before the Brexit door closes. Good luck and bon voyage!