Still Want Your Place in the Sun after Brexit? Consider Co-Ownership
Leading up to and ever since the formal Exit of Britain from the EU, UK nationals have been faced with the quandary of what to do regarding second homes in Spain. Current owners question whether they should hold on to these properties, and would be buyers in many cases have paused their plans.
While the sun continues to shine and the temperatures remain fair on the Spanish coasts, these owners and prospective buyers face a more complex set of regulatory and taxation hurdles than they did before Brexit. Primary among these is the question of visas. Under the new regulations, UK nationals may only spend 90 days during any 180 day period in Spain, whereas as members of the EU, they could stay as long as they wished. Also, the taxation rate on rental income has increased from 19% to 24% for non-EU residents.
Co-ownership is the new way of owning your second home
Among this group of more than one million UK nationals who own a home in Spain, four hundred thousand or so also resided in Spain for more than half the year. They not only have had to consider how much they can visit, but also slog through the bureaucracy of gaining permission to stay, if indeed they pursue a residential visa.
As covered in blog posts by Houses in Spain and articles in the Express, among other sources, many owners have debated selling their properties, and many would be buyers have delayed their purchase plans while they reconsider the equation. Is it still worth the investment of money, time and effort to fully own a home if I can’t use it continuously?
Fortunately for the Spanish real estate market, an uptick in other nationalities and Spaniards buying second homes has maintained prices in the coastal areas, especially at the higher end of the market and for properties with more space. But longer term, a prolonged downturn in UK interest in the market could damage the vibrancy of these communities.
For those UK nationals, a potentially enticing solution is offered through co-ownership, also known as fractional ownership. While fractional ownership used to be associated almost exclusively with destination and private residence clubs who offer full resort services in return for their elevated price tags, new entrants such as Abriqot are now offering a model of fractional second home ownership in Spain which provides access to prime properties at unbeatable prices. Since these are independent properties, not associated with an expensive brand name or resort, they do not come with expensive resort and service fees.
For the UK nationals who still wants to enjoy their time in the sun, this is a brilliant solution. A ⅛ or ¼ ownership of a second home provides all the enjoyment (proportionately 6+ weeks or 12+ weeks) of being in Spain while not overstaying that 90 day limit. Meanwhile the pricetag is of course also proportional, meaning that you can own your share of a property that you might previously have considered above your budget. And lastly, these fully managed properties free you from the administrative, maintenance and other time consuming aspects of second home ownership.