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Now the UK has left the EU, UK citizens are subject to new restrictions and the time they can spend in the EU is now limited. They can only stay in countries in the Schengen area for up to 90 days in any 180-day period without a visa. This applies to Austria and France but also to Switzerland which, although not a member of the EU, is a member of the border-free Schengen Area.
Many clients have been asking how does leaving the EU also affect the rights of UK citizens to buy property in France, Switzerland and Austria?
Our Managing Director Simon Malster has been selling property in the Alps for over 35 years, so we asked him to prepare a guide to answer the questions we are frequently asked:
Which properties can UK citizens buy in France following Brexit?
France does not discriminate between EU citizens or foreigners from third countries when it comes to buying property.All nationals can buy any property anywhere in France to use as a second home. They are even permitted to buy in the name of a company.
Brexit has not changed that for UK citizens – you may buy any property and use it as a holiday home.
Taxes may have changed though, EU citizens who are not resident in France are entitled to obtain a refund of an additional social charges tax on their rental income and capital gains tax. UK citizens now (post Brexit) may be able to claim a refund under the terms of the Trade and Cooperation Agreement (TAC) signed on the 24th December 2020 between the EU and the UK. It is still under review.
Which properties can a UK citizen buy in Austria following Brexit?
From 1st January 2021, a UK citizen is now classed as a “foreigner” and has the same status as any other NON-EU citizen.There are four basic rules:
- NON-EU citizens are only permitted to buy property in Austria which has a "Second Home Status".
- NON-EU citizens are not permitted to buy a "Fully Managed" property in any province in Austria.
- EU citizens are permitted to buy any “Fully Managed” property in any province in Austria. These are properties which are rented for the owner when not in use. Typically, the owner is permitted five weeks personal use per year.
- EU citizens are also permitted to buy property in Austria which has a ‘second home status’.
In most of Austria only 15% of properties in a village can be allowed as Second Home properties. If that limit has been reached, it is not possible to build new second home status properties. In many of the more popular resorts the locals have voted to reduce the second homes percentage to 5% or even zero in some resorts.
EU citizens, foreigners and even Austrians are in the same race to get those few existing Second Home Status properties which come on the market for resale.
The procedure is that the buyer must apply through their notary for a permit to buy the property and anyone has 30 days to object. In the more popular resorts like Zell am See the locals will object to foreign buyers and even to EU buyers so the purchase will be rejected.
In some less well-known villages, they probably will not object, so foreigners and EU buyers will succeed.
To help clients understand which properties are and are not available to NON-EU citizens (including British buyers) we have introduced two new icons. See below:
Every property in Austria will now display one of these icons, British (and other NON-EU buyers) should look for the "Available to all Foreign Buyers" icon.
You can search for properties available to British (NON-EU buyers) by selecting "Austria" in the search bar and then selecting "Available to all Foreign Buyers" in the Advanced Search.
Purchase in a company name
If a foreigner owns an EU company it is possible to buy a “fully managed” property in any province in Austria in the company name.
As you can see, unfortunately Brexit presents a substantial shift in the rules for UK citizens looking to purchase in Austria with a large swathe of the market no longer an option.
Which properties can UK citizens buy in Switzerland following Brexit?
As Switzerland is not a member of the EU not much has changed for UK citizens; they can still buy any property which is “authorised for sale to foreigners”.This includes properties in most of the major ski resorts, with some exceptions such as Zermatt (where a local rule permits only Swiss residents to buy). Most of the properties have “second home” status so you can use the property as you wish. Some new build properties have a rental and management service, but this is rare in Switzerland.
Switzerland treats both EU and UK citizens as “foreigners” and there is no advantage for EU citizens.
There is one exception – EU passport holders do have an advantage if they are resident in Switzerland (having a B permit) as then they are permitted to buy a second home in resorts such as Zermatt which are usually off limits to foreigners.
For UK nationals who obtained a Swiss residence permit before 1 January 2021 nothing has changed - they can still buy in Zermatt. But UK citizens becoming resident in Switzerland now (post Brexit) with a B permit can no longer buy those properties. They will only be able to buy second homes which are authorised for sale to foreigners. Any national who has a C permit (usually after 5 or 10 years) is treated like a Swiss citizen.
Each of the 26 Cantons (member states of the Swiss Confederation) has its own constitution, legislature, government and courts, so it should come as no surprise that each canton has different rules on the purchase of property for foreigners. These even vary from one commune to another within the same canton.
We are only 2 months into our new arrangement with the EU so the analysis above is subject to change. We will be sure to update this article, or provide a further update in due course. As always, for any questions regarding the rules on Alpine property, feel free to drop us an email and we will be happy to help.