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29 March, 2016
For the two million British expats living in Europe and those who own a holiday home there, what would it mean for them if Britain votes to leave the EU?
Would there be changes to taxes, mortgages and visas and would they be able to move around as freely as non-EU citizens?
A survey carried out by A Place in the Sun found that 90% of those who are from Britain and own property abroad are unsure how the change would affect them.
More than 40% of them are concerned about what is around the corner but 70% of them stated that it would not put them off making overseas property investments.
Ultimately, this means that if Britain left the EU, it is unlikely that those UK citizens would not be punished. Expats who receive an income from the UK contribute considerably to the local economies of the country in which they live and this leads to increased tax revenues.
There would be no changes to the tax situation as bilateral tax agreements put in place between the UK and other European countries are not associated with EU ruling and this would also mean that local taxes will not change. The way in which they are treated by local taxes is linked to their residence as opposed to their citizenship. This means that the important factor is how long they will continue town the property and stay at the property rather than where they come from.
In many countries, rates are at an all-time low which means that they are able to borrow large amounts of money. However, it is possible that following the Brexit, those UK citizens with a low profile are likely to be hit with increased interest rates and they would have to have larger deposits.
British buyers make up a large part of many different property markets in places such as France, Spain and Portugal and this would mean that banks are not willing to risk demand.
If the UK did leave the EU then expats may be expected to apply for a visa in order to live, work or retire to Europe. Visa requirements may make visiting countries more difficult as well as work, setting up a business or even moving money around. Applying for long term residency may also be difficult.
All of this is currently guess work because how it will all work out in reality is still unknown. However, it would make sense for a transition period to be put in place that affords them a certain period of time in which they can apply for a visa which will enable them to continue living in the country.
With all of this in mind, expats living in other EU countries could be looking at many months or even years of uncertainty should the UK leave the EU.
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