The United Kingdom’s exit from the European Union, commonly referred to as Brexit, has resulted in certain changes to the rules and regulations surrounding property ownership for British citizens. One of the most notable changes is the limitation on the amount of time that British property owners are allowed to spend in EU countries, like on the Costa del sol in Spain or in the South of France. Specifically, British property owners are now limited to a maximum stay of 90 days per visit, with a total of just under one year or two maximum stays totalling 180 days.
This means that if a British property owner has a holiday home in Spain, for example, they can only spend a maximum of 90 days at a time in the property, with a total of 180 days per year. If they exceed these limits, they may be subject to fines or penalties and could even potentially lose the use of their property.
Additionally, this limitation applies to all EU countries, not just the country where the property is located. This means that if a British property owner has a holiday home in Spain, but wants to spend time in France or Italy as well, they would still be limited to the 90-day maximum stay per visit and 180-day maximum stay per year.
This limitation has had a significant impact on British property owners, especially those who rely on rental income from their properties. It has also had an effect on the broader real estate market, with some experts predicting a decrease in demand for holiday homes in EU countries.
For example, a British citizen who owns a second home in Spain, would not be able to spend more than 90 days per trip. And if he/she is to stay for more than 90 days in total, he/she would need to apply for a long-stay visa, this is the case for most EU countries. This person would now be considered a tax resident in France or Spain should he stay more than half the year in that EU country for example.
Overall, the limitation on the amount of time that British property owners are allowed to spend in EU countries is just one of the many changes that have come about as a result of Brexit. It is important for British property owners to be aware of these changes and to plan accordingly.
Why co-ownership of a property is perfect for a second home?
Most of our fractional ownership properties are divided in eight parts, each part equivalent to 1.5 months each year. Furthermore each co-owner can purchase up to four parts totalling a maximum of 6 months/year, which is exactly equal to the maxium use a brit can have of his property!
Co-ownership of a property is the perfect solution for many people, particularly in light of the changes to the rules surrounding property ownership as a result of Brexit. One of the biggest advantages of co-ownership is that it allows individuals to purchase a share of a property rather than the entire property. This means that they only need to invest a fraction of the cost of owning the property outright.
For example, many of the fractional ownership properties are divided into eight parts (see more how it works), with each part equivalent to 1.5 months of use each year. This means that each co-owner can purchase up to four parts, for a total of six months of use per year. This is the exact amount of time that a British citizen is allowed to spend in EU countries, thus making co-ownership a perfect solution for those who want to own a property in EU countries but also have the flexibility to use it. And of course if you purchase only two parts, you have your 90 days limit. Again it is just perfect.
Another advantage of co-ownership is that it allows individuals to share the costs and responsibilities of maintaining the property. This can include things like property taxes, repairs, and cleaning. It also means that the property can be used more frequently, which can be beneficial for those who want to use the property as a vacation home.
In addition, co-ownership allows for more people to have access to a property that they may not be able to afford to purchase outright. This means that more people can enjoy the benefits of owning a property in an EU country, without the need to make a large financial investment.
Overall, co-ownership of a property offers a number of benefits, making it the perfect solution for many people. It allows individuals to purchase a share of a property, share the costs and responsibilities of maintaining the property, and to use the property for the exact amount of time allowed by Brexit.
Property stay limit for Brits
Many clients come to us with the desire to live in their property for most of the year, but they often do not realise that legally, it is now impossible for British citizens to do so due to the restrictions placed on property ownership as a result of Brexit. The 90 days maximum stay per visit and 180 days maximum stay per year, makes it difficult for people to live in their property for extended periods of time.
Furthermore, many potential clients ignore the fact that the average use of a second home by owners in Europe is only 40 days, which is the case for countries like Spain and France. This means that even purchasing just one share of a property would be more than enough for most people, as it would allow them to spend 1.5 months per year in their property.
With fractional ownership, you can start small
Another option for clients is to start with one share, giving them 1.5 months of use per year, and then to purchase a second share in a property in the same area or in a totally different area to offer variety. For example, we have clients who buy a ski property in the French Alps or Pyrenees and also buy a property in the south of France or Ibiza for the spring/summer months. This allows them to enjoy different experiences and climates throughout the year.
It is important for our clients to consider these restrictions and average use when deciding on purchasing a property and also to think of the variety of options and possibilities that co-ownership offers.
Pay 100% of the property including running costs? No thanks!
The co-ownership system of property ownership is a great option for many people, particularly for those who are looking to use their second home for an average of 40 days per year. However, regulations and laws can change over time, and it is important for property owners to consider what they would do if they were to decide that they want to become residents and use their second home for more than six months per year.
In such a scenario, property owners would have two options. The first option would be to purchase more parts through the fractional ownership system, which would allow them to increase their use of the property. However, this would also increase their share of the running costs, bills, and taxes. The second option would be to sell their part(s) in their co-ownership property, make a profit on their share price, and use this to pay the deposit on a new property.
Imagine having to pay 100% suddenly!
The only problem with the second option is that when you have become used to paying only a fraction of the property price and split all the running costs, bills and taxes by the number of parts, it can be a difficult transition to pay 100% of these costs. For example, the average bill for an apartment is 9,000 euros per year and for a villa between 10,000 and 20,000 euros per year, if you add the gardening and swimming pool maintenance.
In conclusion, property co-ownership is a great option for those who are looking to use their second home for an average of 40 days per year, but it is important for property owners to be aware that regulations and laws can change over time, and to consider what they would do if they were to decide that they want to become residents and use their second home for more than six months per year. They should weigh the pros and cons of taking on the full financial responsibility of owning a property.
For the younger generation properties are assets
Another trend that has been observed in recent times is that, especially among the younger generation, people like to change locations frequently and see properties more as assets rather than just a place to call home. They prefer to invest in properties that can generate rental income or appreciation in value, rather than committing to a long-term residence. This preference aligns well with the concept of co-ownership as it allows them to invest in a property without being tied down to one location. It also allows them to enjoy different experiences and environments, and also to have the flexibility to change location and properties as per their preference and financial situation. Exit strategy is easy also and fast as you can sell your share at market vue anytime you wish.