OVERSEAS

Brexit boltholes, part I: where to buy and

where you can still gain residency before we

leave the EU

British buyers are rushing to snap up a piece of Europe

Zoe Dare Hall

February 11 2018, 12:01am, The Sunday Times

Iberian express: Lisbon is a popular choice for Britons wanting to relocate, attracted by

Portugal’s Golden Visa schemeGENE KRASKO/GETTY

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It was on the last day of their honeymoon in France that Natalie and Lawrence Sweet-Rawlins

woke up to the result of the EU referendum. Then and there, they made the decision to buy

their dream farmhouse, somewhere beautiful and sunny.

The Northamptonshire couple, committed Europhiles, bought a four-bedroom farmhouse with

two acres in the Charente, for just under £100,000 last September.

“We decided to make our move sooner rather than later, as it may not be so easy in the future

after Brexit,” says Natalie, 47, a primary-school teacher. Now, while Lawrence, a

greenkeeper, hones his carpentry skills in their 10 outbuildings, Natalie runs arts and craft

retreats from the property (sweetnothings.eu).

Money talks: a flat tax rate on offshore income is attracting high-net-worth buyers to Italy. On

Lake Garda, a third of inquiries come from the UKALAMY

“Brexit played a big part in our decision to do it when we did,” she says. “We rather enjoyed

what Europe had to offer, and we thought we would struggle to better ourselves and our

futures if we remained in the UK, as all our wealth was tied up in property.”

The Brexit negotiations may be suffering the recriminations and regrets of any long-term

relationship gone sour, so much so that it can feel as though much of life in the UK is on hold

until the final separation. But that hasn’t stopped Brits from investing in bricks and mortar in

Europe — far from it. Property agents, removal companies, tax advisers and relocation

experts all report a spike in interest and deals being done.

There were twice as many inquiries for France in late 2017 than a year earlier, according to

Home Hunts, a specialist French buying agency, with many purchasers motivated to buy

before March 2019, when Britain’s exit from the EU becomes official.

“The announcement that anyone living or owning property in the EU will have their citizen’s

rights guaranteed prompted an unprecedented number of inquiries in December from Brits

looking to buy in France,” says the Home Hunts director Tim Swannie, who completed seven

sales last month, ranging from €1.5m to €5m, mainly in Provence and the Côte d’Azur.

France has also seen a fivefold rise in the number of Brits applying for a French passport —

which requires them to be resident in the country for at least five years — since the vote, with

3,173 British people applying for citizenship in 2017. Their dual nationality will mean they

can also keep their British passports, but will be entitled to French social security and

healthcare rights.

Meanwhile in Spain, although the number of Brits as a percentage of foreign buyers has fallen

from 22% before the EU referendum to about 15% in 2017, they still make up the biggest

overseas contingent in many regions, including Andalusia, Valencia, the Balearics and the

Canary Islands, according to the Spanish notaries association. Barcelona saw 46% more

British buyers in 2017 compared with the previous year, says the Spanish estate agency Lucas

Fox.

“British buyers used to want Spain for two reasons: a holiday home or a retirement home.

Now it’s also about keeping their options open. They see owning property as a potential

benefit, as they are spreading the risk if the pound collapses,” says Mark Stucklin, founder of

the advisory website Spanish Property Insight.

Others expect to see an influx of affluent Brits to Italy, following the recent launch of a flat

tax rate of €100,000 a year for new residents, which exempts wealthy foreigners from paying

Italian tax on offshore income and gains. As a consequence, Sotheby’s International Realty

has opened a new office on Lake Garda, where a third of inquiries come from the UK. “Italy

is now an attractive alternative to Spain or Portugal for high-net-worth individuals who

transfer their tax residence to Italy,” says the agency’s head of sales for central and southern

Italy, Diletta Giorgolo Spinola.

Malta and Cyprus are also “driving a lot of the activity at the moment”, according to Jason

Porter, business development director at the financial management company Blevins Franks,

which advises many British clients seeking to retire in Europe. Initial hand-wringing by Brits

in the months after the EU vote soon gave way to “full steam ahead”, Porter says.

“There is much more certainty now over issues such as healthcare and state pension rules for

retiring British nationals who intend to leave before March 2019 and stay in one European

location,” he says.

The real emerging superstar, however, is Portugal: in particular, the Algarve for holidays and

Lisbon for relocation. “Those who approach us wanting to buy in Europe mention Lisbon

within the first couple of sentences,” says Hugo Thistlethwayte, head of Savills’ international

residential team.

Part of Portugal’s rise in popularity is down to growing awareness of its Non-Habitual

Residents (NHR) scheme, whose benefits for those who spend at least half the year there

include a tax-free UK pension for 10 years.

“About 40% of our British inquiries for Portugal are led by the NHR: mostly older business

owners, empty-nesters who regularly visit the country,” says Lloyd Hughes, of Athena

Advisers.

Others have their eye on Portugal’s Golden Visa scheme, a way for non-EU nationals to gain

residency in return for a €500,000 property investment. “They see having a residence in a safe

eurozone country close to the UK as a way of keeping their options open,” says Daniel

Correia, operations and asset director at the property developer United Investments Portugal

(UIP).

Many of us nurture longer-term dreams of living abroad at some point — a British winter

does that to you. For some, Brexit has been the catalyst to get up and go.

“It made us bring our retirement forward by 10 years,” says Robert Stock, 54, a former market

research company director, who — with his husband, Andrew Hills, 55, has sold up in

Cambridge and moved to the Andalusian village of Ojen, near Marbella, where they are

renovating a “wreck of a house” they bought a decade ago.

“We wanted to make the permanent move while we still can and to come here as EU citizens

before any possible changes to residency requirements,” Stock explains.

“Will we get the same rights to state healthcare once we reach retirement age as British

pensioners do now? What if we decide to try life elsewhere in the EU? And no one knows yet

whether Brits selling up in Spain will fall under different capital gains tax rules once they’re

no longer EU citizens.”

The same number of Brits are moving to Spain now as they were three years ago, according to

the comparison website Reallymoving.com, with Spain accounting for 11% of all moves from

the UK. The number moving to eastern Europe, however — although far smaller — has

doubled from 2% to 4% of all moves out of the UK. Their concerns, says Rob Houghton,

CEO of Reallymoving.com, probably centre on the uncertainty of living and working in the

UK.

For others, though, leaving the UK is more of an ideological issue. Alan Gregory, who

recently took early retirement as professor of finance at Exeter University, is now looking at a

permanent move to Mallorca with his wife, Julie. “Brexit did two things,” he says. “It made

us realise that our option to move with full rights might be time limited, and it provided a

powerful ‘push’ factor in that we didn’t like the nationalistic fervour taking hold in Britain.”

“We had always thought ‘maybe one day’ we might move there, and we had put a toe in the

water by keeping a boat in Port d’Andratx, which led us to buy a one-bedroom flat in 2012.

Now we are looking for a finca-style property for €1m-€2m,” Gregory says — although an

unexpected health diagnosis has made him “uninsurable” as a Brit abroad, he fears.

Many wealthy buyers are viewing a property purchase in Europe as a pragmatic move

financially. “They are the ones we come across most,” says Mark Harvey, head of Knight

Frank estate agency’s international department.

“In the worst-case scenario, it’s a hedge against sterling’s devaluation. They are being told by

their financial advisers to buy something they can use over the next 10 years or so,” says

Harvey, who reports that the “no hassle, no risk” brigade are sticking to the well-trodden

paths of the Côte d’Azur and Provence. “They know what they’re getting, President Macron

is making all the right noises and France is seeing a bit of a purple patch,” he adds.

Savills is seeing plenty of this type of purchaser too. “Those with something to lose do worry

about losing it,” says Thistlethwayte. “Paris is popular, there’s continuing demand for the

Alps, Switzerland is ridiculously stable and Italy offers an unparalleled lifestyle.”

Others, however, simply want to own a place in Europe and feel Brexit will make little

difference. Juliet Kennedy, who is responsible for air traffic control services throughout the

UK, doesn’t feel Brexit affected her decision to buy in Europe recently. She has bought a two-

bedroom house at Château Capitoul, a restored wine estate in the Languedoc region of France

that has sold out in five months, with many British buyers, according to the selling agent

Sphere Estates.

“I want to be able to enjoy everything Europe has to offer and not be isolated in the UK —

but I’m in the fortunate position of being half Irish, so I will still have a European passport,”

says Kennedy, who is in her mid-fifties and lives in Winchester. “I don’t think Brexit will

stop people from wanting to buy in France in the long term, but I do think it might be easier to

buy before rather than afterwards.”

In Spain, too, there are plenty of British buyers who don’t even mention Brexit, says Barbara

Wood, director of the Property Finders buying agency. “Considering there are no restrictions

on any foreigner buying in Spain, irrespective of where they come from, why should Brits

have any concerns?” she asks.

“It is inconceivable that Spain will do anything to prejudice its largest market,” adds Wood,

who mentions that her two highest-spending British buyers in 15 years of working for the

Property Finders are both “post referendum clients”.

Whether we’re driven by Brexit fury, financial concerns or fatigue, or feel whether we are in

or out makes no difference, there are plenty of Brits on a buying spree in Europe.

Brexit boltholes for sale

Spain, €495,000 With art galleries, gothic churches and cutting-edge restaurants (including three-Michelin-

starred El Celler de Can Roca), the Catalan city of Girona heaves with culture. This two-

bedroom house in the old town has been beautifully updated. 00 34 933 562989, lucasfox.com

France, €462,000 This five-bedroom property in the gorgeous medieval town of Martel, in the Lot, is a little less

than two hours’ drive from Bergerac airport. It has a summer house with kitchen, outbuildings

and a gîte, so there is potential to generate income. 0870 011 5151, frenchestateagents.com

France, €870,000 If you’re prepared to take on the steep running costs that come with owning a chateau, this

historic, 19th-century number is as elegant as they come, with 10 bedrooms, a tower library

and 13 acres of parkland. It’s near Laval, in the Pays de la Loire. 01225 463752,

frenchentree.com

Spain, €2.45m The ritzy Med community of Sotogrande, in San Roque, Cadiz, is known for the size of its

villas — and the stature of their owners. Fit right in with this nine-bedroom villa with a

sunken sitting room, infinity pool and a night-lit garden with gazebo. 00 34 956 100325,

engelvoelkers.com

Mallorca, €985,000 Built in finca style in 2002, this tile-floored, three-bedroom home is on the edge of the village

of Moscari, off the tourist trail, with views to the Tramuntana mountains. 00 34 971 621629,

engelvoelkers.com

Poland, £148,000 A stroll from Wawel Castle, on the outskirts of the historic Jewish quarter of Krakow, in a

Unesco World Heritage Site, this one-bedder is in a modern complex. 01932 849536,

property-venture.com

France, €856,000 This classic 17th-century Normandy manor house — half-timbered and surrounded by an

orchard — is near the town of Cambremer and has four bedrooms. 020 7201 2071,

chestertons-international.com

Portugal, €410,000 A one-bedder with panoramic views in the swanky new Amoreiras Vista development is

further proof that Lisbon is on the up. Near the French school and Marques de Pombal square.

020 7016 3740, savills.com

Mallorca, €400,000 The pretty town of Valldemossa is only 15 miles from Palma. This renovated two-bedroom

townhouse has a patio, roof terrace, and fine sea and mountain views. 00 34 971 636363,

engelvoelkers.com

Italy, €1.35m The Tuscan farmhouse fantasy is alive and well for British buyers. At this one in Londa, in

the Florentine hills, you get terracotta floors, six bedrooms, eight acres and a pool. 020 7351

2383, aylesford.com

Portugal, from €425,000 Lisbon developers are busy restoring historic buildings and creating luxury apartments. At

Arco Augusta, in Baixa — an area full of monumental buildings and vast cobbled squares —

a collection of 28 studio flats to two-bedders has been carved out of a grand former bank

building. Prices go up to €1.1m. 020 7471 4500, athenaadvisers.com

France, €10.9m Bordering Monaco, Cap-d’Ail is a buzzing seaside resort with three beaches, unspoilt walking

trails and crowd-thronged sailing regattas. Recently reduced from €13m, this four-storey villa

has three main bedrooms, a chalet and 330ft of sea frontage. The waterfront swimming pool is

pure Riviera. 020 8144 5501, home-hunts.com

WHICH BUYER ARE YOU? The Brexit Brit tribes with one eye — and lots more euros — on Europe

IT’S NOW OR NEVER Who You’ve done the “big” birthday party, and are now thinking early retirement and just

how you can realise your lifelong dream to live abroad.

Why In case it gets harder to move to Europe after 2019.

Where The top draws include Sotogrande and the Algarve — “It’s Cheltenham-on-Sea,” says

Hugo Thistlethwayte at Savills. Plus, Tuscany and the Italian Lakes.

IT WON’T MAKE ANY DIFFERENCE Who Fortysomethings and up. Mainly looking for holiday homes with rental potential.

Why They want to buy and can’t see Brexit fundamentally changing anything. “British

people have been buying in Miami and Barbados for years, and have never been concerned

about healthcare or airport queues,” says Thistlethwayte. “With a purchase in Europe now,

they are simply planning to make provisions such as private healthcare.”

Where Languedoc, the Balearics, Catalonia — “I’ve just had a Brit with up to €1.3m to spend

in Catalonia, and Brexit was not even mentioned — nor, curiously, was Catalan

independence,” says Property Finders’ Barbara Wood.

GOT TO GET MY MONEY OUT Who Wealthy 40-pluses worried about post-Brexit devaluation of sterling.

Why Looking to diversify their real-estate assets and in search of holiday homes they will use

and rent out.

Where Marbella, Algarve, the French Alps. “Many feel it’s best to buy now, while the pound

is still relatively OK — in case it falls another 20% in a hard Brexit,” says Mark Stucklin of

Spanish Property Insight. The high-end lender Enness International reports plenty of interest

among wealthy British clients in investment property in Berlin and Amsterdam.

WE’RE OUT OF HERE Who Any age, but probably 50-pluses: empty-nesters in a position with family and finances

to up sticks.

Why They don’t like what the UK has become, they don’t like where we’re going, so they’re

off — permanently. “They’re Europhile and slightly ashamed of the route we’re taking,” says

Mark Harvey at Knight Frank.

Where Lisbon, Provence, Mallorca (where Engel & Völkers reports that Britons make up

16% of overseas buyers, still the second largest group).

CAN’T AFFORD LONDON; BERLIN, HERE I COME Who Twenty- and thirtysomethings who can increase their buying power with a euro

mortgage — and simply have more fun.

Why “It’s the ‘can’t get my foot on the ladder here, I can get something cheaper in a buzzier

European city’ crowd,” Harvey says.

Where Madrid, Lisbon and Berlin. “Berlin is fast becoming one of Europe’s start-up capitals.

Bankers will move to Frankfurt, but young Brits are attracted to Berlin,” says Oliver Blum,

head of John Taylor estate agents in the German city. Also Valencia — “It has beaches, a

pretty old town and new developments, but is less expensive than Barcelona,” Thistlethwayte

says.

HEDGING MY BETS Who Thirtysomething London-based investment bankers.

Why Why restrict your playing to the stock market? In preparation for possible relocation —

and to capitalise on markets on the up. “We think it’s currently a good bet to buy in Europe,”

says Jelena Cvjetkovic, associate director of Savills’ international team. “There is a strong

domestic demand. Some agents in the Dordogne, who used to sell almost exclusively to

overseas buyers, are translating their websites into French for the first time. We’re seeing a

surge in domestic buyers in Paris, too.”

Where Paris (the Coldwell Banker agency in Paris expects to see 50,000 London-based

buyers in the capital in the next two years, pushing up prices in the €1m-€3m range), Geneva

(or nearby in the French Alps, for those who like the Alpine scene). Some international

schools, including in Frankfurt and Siena in Tuscany, are reporting an increase in applications

from Brits. Others, in areas such as Lisbon and Sotogrande, are in constant demand.

A TAX TOURIST Who Forty- to fiftysomethings.

Why Fiscal self-preservation — for those with something to lose.

Where Countries with ”passports for property” schemes, such as Malta, Cyprus and

particularly Portugal. “Portugal’s NHR [non-habitual resident] scheme lasts only 10 years, so

people try to use it at the sweet spot of their career, when their dividends come through from

their companies and they can take early retirement,” says Lloyd Hughes from Athena

Advisers. Italy’s new flat-rate tax for the wealthy is making it more attractive, and Monaco

and Switzerland still attract the UHNWs.