UK buyers in Spain after Brexit: what changed

Tax: the line is residence, not passport

Spain’s non-resident income tax law (IRNR, Impuesto sobre la Renta de no Residentes) sets its rates by where the owner lives. Article 25.1.a gives 24% in general and 19% for taxpayers resident in another EU or EEA state with which effective tax information exchange exists. The test is the country of residence, not nationality. A British citizen living in France is in the 19% group; a British citizen living in England is not.

Three consequences follow for a UK-resident owner:

• Rent is taxed on the gross amount. Article 24.1 sets the taxable base at the full amount, “without the reductions” of the personal income tax law. Article 24.6, which lets taxpayers deduct expenses linked to the Spanish income, is written for residents of other EU Member States (and the EEA where information exchange exists). A UK resident therefore pays 24% of the rent received, whatever the mortgage interest, community fees, property tax or repairs.
• Sale gains are taxed at 19% for every non-resident, EU or not (article 25.1.f.3). Brexit did not change that rate. The buyer withholds 3% of the price as a payment on account (article 25.2).
• No reinvestment relief. The exemption for a gain on a former Spanish main home that is reinvested in a new main home (additional provision 7 of the same law) is reserved to residents of EU Member States, and to EEA residents with information exchange. A UK resident cannot use it.

The treaty between the two countries does not change these rates; see the Spain–UK tax treaty for what articles 6, 13 and 22 do say. For an estimate, use the non-resident tax calculator.

Tax representatives and wealth tax

Article 10 of the IRNR law obliges non-EU residents to appoint a representative in Spain in certain cases, including when the tax authority requires it “because of the amount and nature of the income or of owning real estate in Spanish territory”. It is not automatic. For the temporary solidarity tax on large fortunes, by contrast, article 3.Seis of Ley 38/2022 makes the appointment mandatory for taxpayers not resident in another EU Member State. That tax applies above €3,000,000 of net wealth; see wealth tax for non-residents.

Military zones: UK buyers now need a permit

Spanish law restricts foreign ownership in areas listed for national defence reasons. The exemption in the law covers natural persons holding the nationality of an EU Member State (the text says “Comunidad Económica Europea”). The FCDO guidance states that from 1 January 2021, UK nationals buying in these areas, “including those who fall within the scope of the Withdrawal Agreement”, must meet third-country requirements and obtain a military permit from the Ministry of Defence before purchase. It applies to new purchases or construction works from that date. The areas it lists include all the islands (the Balearic and Canary Islands), the Cartagena area, the Strait of Gibraltar, the Bay of Cádiz, coastal Galicia, the borders with France, Andorra and Portugal, Ceuta and Melilla; urban centres of non-border towns fall outside the rule. The full picture is in military zones and foreign buyers. That FCDO page is dated 13 May 2021 and states that it is being reviewed, so confirm the current position with the notary or a lawyer before signing.

Visits: 90 days in any 180

The FCDO’s entry guidance says UK travellers can go to the Schengen area, including Spain, without a visa for up to 90 days in any 180-day period as tourists or to visit family and friends, and that visits to other Schengen countries in the previous 180 days count. Owning a home does not extend that allowance. Overstaying can lead to a ban of up to three years, according to the same page. Time spent in Spain with a residence permit or long-stay visa does not count towards the 90 days. The guidance also describes the EU Entry/Exit System, which records biometrics at the border for short stays; long-term residents with a residence card are exempt. At the border you may be asked for proof of address if you stay at your own property.

Staying longer is a residence question, and also a tax one: more than 183 days in a calendar year makes you tax resident in Spain (see tax residency in Spain). The two thresholds are different and independent.

What the Withdrawal Agreement still protects

The FCDO says that people who moved to Spain before 1 January 2021 and have lived there legally since have rights under the Withdrawal Agreement. Their proof is the foreigner’s identity card (TIE, Tarjeta de Identidad de Extranjero); the older green certificate is not accepted as proof for the Entry/Exit System exemption, and the FCDO recommends exchanging it. Such residents do not need a work permit or visa, according to the guidance. Nothing on that page extends those protections to purchase permits in military zones or to the tax rates above.

Foreign-investment declaration and NIE

Purchases above €500,000 by a non-resident are declared to the Investment Registry, whatever the nationality: see declaring a foreign investment. A foreigner buying also needs an NIE, which the FCDO says can be requested at the Spanish embassy or consulate in the UK or through a representative.

Which professional to consult

A lawyer registered with a Spanish bar association (colegio de abogados) can say whether a given property lies in a restricted zone and request the permit; a tax adviser can compare the 24% and 19% outcomes for your residence. Payotte does not recommend firms.