There are around 2.2m Britons who live in the EU as expats and a further one million who own holiday homes there.
Currently, Brits are free to live and work in most EU countries, as well as own a property. They have these rights as citizens of an EU member state and are free to come and go as they please.
So how will this change if the UK leaves the EU?
If the UK did leave, Brits would essentially be treated as non-EU citizens and therefore be treated differently when they visit their holiday homes or wish to live (or continue living) in an EU country.
Those in support of a Brexit believe bilateral agreements either with the EU or with individual countries will be made to help establish a working system for UK expats and holiday home owners.
Opponents state that the EU’s strict immigration rules would make this difficult or impossible.
We look at the likely changes if the UK does decide to leave the EU, based on the current rules:
Holiday home owners
The EU could require UK citizens to apply for a visa in order to visit EU countries, which would mean more intrusive questions for holiday home owners, such as how long you were going to stay, your income and health cover.
Anyone who has lived in an EU state for over five years can apply for a long-term resident status under EU law. However, your status would be more restricted than your current one as an EU citizen, and there may be integration rules for long-term residents, such as being able to speak your new country’s language.
In Spain, you may be required to take a driving test and file tax returns for the past five years – things you do not need to do now. Working in the EU would also become more difficult. You may need to apply for a Blue Card and be subject to job quotas and restrictions.
The worst outcome for expats living within the EU but who do not qualify for long-term resident status, may be having to return to the UK.
UK citizens are likely to remain free to own EU property, as any other nationality is. For instance, many US citizens own property in France without restrictions.
The main issue here is how property inheritance and taxation laws would apply – at present, the rules treat EU and non-EU citizens differently.
If the UK leaves the EU, UK buyers may find it harder to get a mortgage for a European property. This is due to European-based banks considering non-EU citizens as higher risk. Therefore, the amounts that can be borrowed would be lower and the deposit required may be higher.
Impact on Spain
The Sales and Marketing Director at Taylor Wimpey España, Marc Pritchard, says a potential Brexit has yet to affect Spain.
He comments: “Most Spanish people are too preoccupied with hanging onto their jobs to worry about a UK exit, and very few of the Brits I have met recently mention it.
“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, 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.”1
If we stay
If we don’t leave the EU, there are two likely outcomes – one is that David Cameron renegotiates the UK’s membership in the EU, but this is unlikely to affect Britons owning first or second homes in the EU. The exception may be for those thinking of buying or moving to Eastern Europe.
The second option is that the UK becomes a second tier member of the EU, as Iceland, Norway and Lichtenstein are, by becoming a member of the European Economic Area (EEA), rather than a full member of the EU. EEA membership would still enable UK citizens to live and work in the EU as they do now, but their access to some rights and social benefits may be restricted.
Whatever the outcome, ensure you are protected by either expat property insurance or holiday home insurance.