Brexit talk in Marbella shows the affect of rental tax on the Costa del Sol

CHANGES that will follow when the UK leaves the EU may have a significant impact on the real estate sector on the Costa del Sol, which depends on about 50 per cent of the British market. Brexit will assume from next year unless an agreement is reached in another sense, the application of tax modifications that will significantly affect the British residents in the UK who receive income from renting homes in European territory.

Around half of the homes sold on the Costa del Sol, and particularly in the surroundings of Marbella, Mijas and Estepona, are acquired for holiday purposes by Brits who at the same time obtain a return through the rent during the periods in which they don’t use them.

Currently, being citizens of the EU but not residents of Spain, they are required to pay 19 per cent on the profits obtained from the rent. When the exit kicks in, by becoming residents in a third country not belonging to the European Union, the owners will be taxed 24 per cent on the gross income of the rental. This was explained on Tuesday in Marbella by the economist Santiago Lapausa, who spoke at the conference ‘Brexit and Now?’

This change in the taxation of rents can have direct consequences on the real estate market, and also to many of the real estate agencies and property managers that operate in the surroundings of Marbella who obtain part of their turnover in the management of the rentals of these properties.