Clé France

With the EU Referendum approaching we thought we would collect a few news stories and insights on the potential outcome and effects on you buying a property in an EU member country, specifically France. We will publish regular updates here in our "News in General" Blog pages on the Cle France website to keep you up to speed.

What Will Happen?

There are many fiery debates in the UK licking around the topic of EU membership but there’s one that has yet to ignite. And it’s the question that always comes up during the property-buying seminars at our exhibitions (along with wills and healthcare):

What will happen to the estimated 2.2 million Brits who live in the EU, and the further one million who own holiday homes there?

At the moment Brits are free to live and work in most EU countries as well as own property. They do so as citizens of an EU member state and are free to come and go as they wish except for usually cursory passport controls.

But how fundamentally will all this change if the UK leaves the EU? The straightforward answer is that if the UK did leave, in theory Brits would be treated as non-EU citizens and treated differently when they visited holiday homes or wanted to live (or continue living) within an EU country.

There is a great difference between what’s theory and reality. Those urging an exit say bilateral agreements either with the EU or individual countries would be struck to help establish a working system for UK expats and holiday home owners.

Opponents say the EU’s strict immigration rules would make this difficult or impossible. But for the sake of debate, let’s play out some likely changes following a Brexit based on the current rules.

Permanent Residents

Anyone who has lived in an EU state for more than five years can apply for long-term resident status under EU law. But your status would be more restricted than your current one as an EU citizen, and there may be ‘integration rules’ for long term residency – such as being able to speak your host nation’s language.

Holiday Home Owners

The EU could require UK citizens to apply for a visa in order to visit a country within the EU, which for holiday home owners would mean more intrusive questions about how long you were going to stay, your income and health cover.

Property Ownership

UK citizens are likely to remain free to own property within the EU, as any other nationality is. For example, in France many US citizens own property there without any restrictions. The main area of contention is here is how property inheritance and taxation laws would apply; at the moment the rules treat EU and non-EU citizens differently.

Getting a Mortgage

UK buyers may find it harder to get a home loan to buy a property in the EU. This is because European-based banks consider non-EU citizens to be a higher risk and therefore the amounts that can be borrowed would be lower, and the deposit required may be higher.

View from over there

Marc Pritchard, sales and marketing director at developer Taylor Wimpey Espana, lives on the Balearic island of Mallorca. He says a potential Brexit has yet to impact Spain yet.

“Most Spanish people are too preoccupied with hanging on to their jobs to worry about a UK exit, and very few of the Brits I have met recently mention it,” he says.

“Even if Britain did leave Europe it wouldn’t stop Brits buying and living here. We sell to over 30 different nationalities including those outside the UK such as Russia, the Ukraine and the Middle East. I’m not aware of any difficulties for them getting visas to live in Spain, or registering with the tax authorities here.”

What if we don’t leave?

There are two likely outcomes. First is that David Cameron renegotiates our membership of the EU, but this is unlikely to affect Brits owning first or second homes within the EU.

The exception to this may be those thinking of buying or living in some Eastern European states such as Romania, Poland and Bulgaria. If their citizens’ rights to enter the UK are restricted, there may be some tit-for-tat action.

The second prediction is that the UK becomes a ‘second tier’ member of the EU as Iceland, Norway and Lichtenstein are, by being a member of European Economic Area rather than full-member of the EU. EEA membership would still enable UK citizens to live and work in the EU as they do now, albeit with restricted access to some rights and social benefits.

Nigel Lewis

This article was originally published in the A Place in the Sun magazine - Issue 124 

Cle France Thoughts

At the moment nothing has changed of course and if the people of the UK vote to stay in then very little will change for at least a generation or two, even if Britain did leave Europe it wouldn’t stop Brits buying and living on mainland Europe. Sharon and David at Cle France lived and worked in France during the 1980's and 1990's when you had to 'jump through many hoops' before it was the 'free movement' we enjoy at the moment, they also lived in France from 1999 up to 2012 full time and at the start of that period you could not just 'arrive' you had to prove income and that you could 'support yourself financially' so going back to that type of scenario won't happen overnight, all it will really mean is a bit more paperwork!

Brits have always bought property as holiday homes and lived full time in France, Spain and other European countries before the formation of the EU and even if there is a Brexit for the UK this will still be the case.

One thing is clear and that is during these times, similar to the Scottish Yes / No campaign there is an air of uncertainty and this will no doubt be fuelled by any further comments from the Brexit brigade, this effect could seriously cause the cost of your property purchase to increase significantly, so for this reason many clients have purchased their euros in advance.

This method is called a 'Forward contract' and by doing this with FC Exchange it means you can fix your exchange rate for up to two years in advance, so you’ll know exactly how much you’ll get when you make your international money transfer. This makes budgeting a great deal easier and a lot of stress is removed.

Do you want more information ?

So if you need to buy or sell sterling and would like to be kept up to date with all the latest data releases and exchange rate movements then feel free to contact myself Ben Amrany. If you are buying or selling a house in France we will make sure your monies are in the right place at the right time, we work hand in hand with you and Cle France.

For more information on the currency service I can provide please feel free to contact myself...

Ben Amrany from FC Exchange follow this link or phone and ask for myself and quote "Cle France" on 020 7989 0000.

You may contact me directly using this form (click here) with your requirement and I will explain the options that are available to you in getting the best exchange rate.  

Blog submitted by: Alex for The French Property Network - Cle France.

Originally published: in the A Place in the Sun magazine - Issue 124

For everything you need to know about French property visit www.clefrance.co.uk