Since the United Kingdom voted in favour of Brexit on 23 June 2016 and Brexit took full legal effect on 1 January 2021, British citizens are no longer considered European citizens.
This means that, for the purposes of the Treaties on free movement, residence and trade, they are no longer taxable persons, and are therefore considered as subjects of a third country.
However, as far as residence in Spain is concerned, there is no major change either.
Spain, as a peninsula surrounded by water that has favoured trade and commerce for many centuries, has many regulations regarding residence procedures.
Thus, Brexit is simply a change of rules for residency in Spain, in order to achieve the same objective: to obtain a high quality of life without a great cost.
However, there is a type of regulation, commonly referred to as the “Golden Visa”, which does not affect at all whether Britons are considered Europeans or not.
This is because this regulation applies regardless of the state of the subject who wishes to benefit from the procedure, and this is because Spain prioritises three activities: the purchase and sale of real estate, the purchase of public debt, investment in national companies or the existence of a professional project that provides the receiving state with an advance value.
This procedure is Law 14/2013, of 27 September, on support for entrepreneurs and their internationalisation, which opened the door for all citizens of non-EU countries to obtain authorisation to reside and work in our country.
Specifically, the Law provides for three different ways:
- Residence permit through the acquisition of €2 million of public debt.
- Residence permit through the acquisition of one million euros in shares or stocks, or bank deposits in financial institutions.
- Residence permit through the purchase of real estate worth €500,000 free of any encumbrances.
- Residence permit through a business project.
In this post we will discuss the residence permit through the purchase of real estate.
GOLDEN VISA FOR THE ACQUISITION OF REAL ESTATE
Article 63 of this law regulates which cases are considered significant investments, one of the best known cases being the acquisition of real estate with a value equal to or greater than 500,000 euros free of encumbrances, provided that the purchase was made after the entry into force of Law 14/2013, i.e. on 29 September 2013. Therefore, properties acquired prior to that date are not considered to be a significant investment.
Although this law has been in force for more than seven years, the truth is that it has begun to gain relevance after the exit of the United Kingdom from the European Union and the change of status of the British that this entails, since as of 1 January 2021, British nationals who wish to stay more than three months in Spain must apply for residency under a non-EU regime, one of the ways being known as the “Golden Visa”.
REQUIREMENTS TO OBTAIN THE GOLDEN VISA
Articles 62, 63 and 64 of the Law determine the requirements to obtain the Golden Visa for the acquisition of real estate, summarised in the following points:
- The acquisition of real estate in Spain with an investment of a value equal to or greater than 500,000 euros for each applicant.
- Proof of having acquired ownership of the real estate by means of certification with continuous information on ownership and encumbrances from the Land Registry.
- Proof of having an investment in real estate of 500,000 euros free of any liens or encumbrances.
THE REQUIREMENTS ACCORDING TO THE SPANISH COURTS
Moreover, due to its success, there are certain cases that have reached the Supreme Court, with the High Court having to shed light and clarity on certain points not contemplated in the Law.
Thus, Judgment no. 1134/2020 of 30 July 2020, appeal no. 5613/2019 (ECLI: ES:TS:2020:2658) clarified the following points:
a) What must be more than €500,000: the purchase price or the total investment in the property?
The Supreme Court stated that the threshold of €500.000.- for the purpose of obtaining Golden Visa residence, the High Court understands that when the declared investment consists of a construction or development of a new building or dwelling on land previously acquired under a purchase contract, in that case, the total amount of both, acquisition and construction, must be taken into account when assessing whether or not the threshold of €500.000, excluding taxes, is exceeded.
b) Does the reconstruction of a historic building serve as an investment for Golden Visa?
No, not yet. It does not see as “significant investment” the renovation of historic buildings or the extension of an existing property by more than 100% of the originally existing space.
c) What does unencumbered mean?
The applicant cannot have used a loan of any kind or a mortgage.
d) How is the acquisition accredited?
By means of the deed of sale and the property registration certificate, not older than 90 days.
PROCEDURE FOR OBTAINING THE GOLDEN VISA
The application is submitted telematically and can be made without having previously obtained a residence visa as an investor, provided that the investor and his/her family members are in Spain at the time of applying for authorisation on a regular basis, for example, on a short-term stay.
The following documents, among others, must be attached to the application form.
1) Accreditation of the investment made, by means of the corresponding certificate from the Land Registry.
As mentioned above, this certificate must have been issued within 90 days prior to the submission of the application for the residence visa.
If at the time of the visa application the property is in the process of being registered in the Land Registry, it will be sufficient to present the aforementioned certificate stating the validity of the presentation of the acquisition document together with the documents accrediting the payment of the corresponding taxes.
2) Public or private medical insurance taken out with an insurance company authorised to operate in Spain.
The medical insurance must remain active throughout the duration of the authorisation and its maintenance shall be a requirement for the renewal of the authorisation.
The insurance must provide coverage comparable to that provided by the National Health System.
Travel insurance will not be valid.
3) Proof of sufficient economic resources for the applicant and his/her family during his/her stay in Spain.
That is, no less than 27,115.20 euros per year for the applicant and 6,778.80 euros per year for the spouse and each child. This can be accredited, for example, by means of certificates or bank statements, although it must be taken into account that they must be translated into Spanish and, if they are in foreign currency, indicate their equivalence in euros.
4) Criminal record certificate issued by the country of origin or the countries in which you have resided during the last five years (duly apostilled and with a sworn translation).
The maximum period for a decision is twenty working days from the presentation of the application and once the authorisation has been notified, the applicant and his/her family must apply for the foreigner’s identity card (TIE) at the corresponding office.
This procedure must be carried out in person, as fingerprints must be taken. After 40-60 days, the applicant must return to the office to collect the card.
VALIDITY OF THE GOLDEN VISA RESIDENCE PERMIT
The residence permit is valid for two years and can be renewed as long as the conditions that gave rise to the permit are maintained. Moreover, the renewal does not require actual residence in Spain, but only a visit to Spain during the period of residence.
Is it possible to buy two or more properties to reach the amount of 500.000€?
Yes, it is possible to purchase multiple properties that together add up to the amount stipulated in Law 14/2013 to obtain residence by investment in Spain.
Can two or more people acquire a property together to obtain the Golden Visa?
Yes, as long as the share of each of the owners amounts to more than €500,000.
Will I be a tax resident in Spain?
Finally, it should be noted that the mere fact of holding a residence permit does not imply that you are considered a tax resident in Spain. For this, it is necessary to have stayed in Spain for at least 183 days in a calendar year.
In conclusion, even if the United Kingdom voted in favour of Brexit, you can still have residence in Spain, thanks to the Golden Visa procedure, and therefore continue to enjoy the advantages of being European.
At Bufete Frau we have extensive and long-standing experience in procedures aimed at obtaining residency through Golden Visa. We turn the apparently complicated into an experience for the client, as we help them to build their illusions in Spain.
Do not miss this opportunity and live the life you deserve, Bufete Frau will do the rest.
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