The British press is full of reports on the post-Brexit exodus of British residents from Spain’s Costas and Islands. However, the effect of Brexit on the Gran Canaria property market is likely to be far more nuanced. It may well be completely overshadowed by other factors.
Some British residents have already packed up and gone home and non-resident property owners in Gran Canaria face a choice: Is owning a property they can’t use as often as they want still worthwhile?
It’s highly likely that some will sell up. However, we also see an increase in interest in moving to Gran Canaria amongst families, remote workers and location-independent couples.
If this interest carries through to property purchases it won’t be a straight swap between arrivals and those selling up. The new arrivals will look for larger property to live in, rather than the holiday properties that leavers sell.
The big question is, if new British arrivals want larger and high quality property, who buys the smaller holiday properties sold by leavers?
Before we answer that let’s have a look at the actual effects of Brexit on British residents and immigrants to Gran Canaria.
Saying longer than 90 days in Spain and Gran Canaria
UK citizens can visit Gran Canaria for 90 days out of a rolling 180 day period unless they have residencia, a Visa or are married to a Spanish citizen (or to an EU citizen resident in Spain). Any time spent in another EU country comes off this 90 day allowance.
Work Visas must be applied for before you arrive in Spain to start a job. The process can take over a month. Your employer will be able to advise you or even apply on your behalf. There are also Visa categories for the self-employed, entrepreneurs, business investors, and highly trained professionals, researchers, etc.
If you want to live in Spain and not work, a non-lucrative Visa is an option. You must apply before you come to Spain and show that you are financially self sufficient.
- Spain defines financial independence as having an income of at least 26 thousand euros (plus 6.5K per additional family member), plus private medical insurance. This is roughly triple the minimum income required for residence pre-Brexit.
Another option is to apply for a Golden Visa. To qualify you have to spend 500,000 euros on Spanish property (it can be several small properties). The total does not include mortgage borrowing or taxes and fees associated with the purchase of property. You can also get a Golden Visa by investing in Spanish bonds, businesses, etc. A Golden Visa entitles you to Spanish residency and, after five years, Spanish citizenship.
Most Visas require you to take out private medical insurance that is equivalent to the cover offered by the Spanish National Health Service. Please consult a knowledgeable local insurance broker before you do. Many policies are not suitable and prices vary considerably. Note that you can’t cancel a policy right after you get a visa because they are all annual.
Post-Brexit tax changes for British property owners in Gran Canaria
British citizens will still be able to claim inheritance tax exemptions on Spanish property. A 2018 Spanish Supreme Court ruling established this right. The immediate family of all Gran Canaria property owners benefit from the Canary Islands’ 99% exemption on Spanish inheritance tax.
Unless Spain makes an unlikely exemption for British citizens, rental income tax for non-residents is now 24% rather than 19%. No tax relief is allowed.
British citizens have to pay capital gains tax when they sell a main residence and leave Spain. Brits have lost the right to rollover relief when you buy a prime residence anywhere in the EU.
British residents need a Spanish driving license
All British residents, whether pre-Brexit or new arrivals, now need to apply for a Spanish driving license.
British pet passports no longer valid
To bring a pet to Gran Canaria, make sure that your pet travel documents are compatible with EU rules. Start the process well in advance.
Military permission when buying a property in Spain
Non-EU nationals always needed military permission to buy property in parts of Gran Canaria. For example, close to the naval and military facilities in Las Palmas.
All non-EU/ EEA/ EFTA citizens now need military permission to buy property ANYWHERE in Gran Canaria. The process is often a formality but does take time.
The effects of Brexit on Gran Canaria property prices
There aren’t enough British property owners in Gran Canaria to affect the property market outside a couple of areas.
If lots of British property owners sell in resort zones like Puerto Rico and Playa del Inglés, the local markets may see prices drop. However, the effect of Covid and travel restrictions is likely to be more significant even in the most British areas.
With travel frozen it will take a while for Brexit and Covid to affect property availability and prices in Gran Canaria resorts. I expect a steady trickle of property sales rather than a sudden flood.
If this is the case, I expect enough EU buyers to soak up the extra demand. This assumes that Covid doesn’t permanently affect the Gran Canaria tourist industry.
The effects of Brexit on Las Palmas property prices
Las Palmas property prices are currently stable. Reduced number of sellers and buyers have largely balanced themselves out. Properties with views and outside space have even increased in value thanks to demand from lockdown-weary locals. Interest also rose for rural property close to towns.
Brexit won’t affect Las Palmas property prices because there are relatively few British residents in the city.
However, the city’s property market faces headwinds. Many locals are on the Spanish furlough scheme (ERTE) but this ends at some point in 2021. After a grace period of a few months, redundancies will spike as hotels and tourism supply chain companies cut back. Tourism accounts for 40% of the island’s economy, so job losses will impact the capital’s property market.
Buying or selling a Gran Canaria property
The actual process of buying or selling a Gran Canaria property hasn’t changed for British citizens. And the events of 2020 have actually made some things easier.
Selling a property remotely without having to visit Gran Canaria now works well thanks to digital signatures and limited powers of attorney.
The same applies for buying a Gran Canaria property remotely.
Just choose an agent and legal representative familiar with the process. There are plenty of silly pitfalls that can cause big delays.
If you have any questions about property in Gran Canaria, just get in touch. I’m Laura Leyshon, one of the island’s top selling estate agents. I offer detailed local knowledge and international reach combined with personal service.