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Brexit Insights - UK & Portugal

Brexit Insights - UK & Portugal

The clock seems to be ticking louder now with Brexit, the United Kingdom’s withdrawal from the European Union, scheduled for the 29th March 2019, to, 31st December 2020. Although arbitration's with the EU started in 2017, a clear path forward is still undefined. Meanwhile the exit deadline approaches and many UK citizens, in and out of the country, are uncertain how they will be affected, what the future holds and how they should plan their lives in the interim.

 

To better understand where this situation stands for those looking to move, retire and invest in Portugal we did some research. We also wanted to address the feeling of the moment - is a sense of doom realistic?

 

The Portuguese Consulate’s official response was there is ‘no official position’, the British Consulate, the same. Not terribly helpful. So does the story of what’s next with Brexit end quickly and we simply fold our hands and do nothing but await impending doom to arrive in March? If you know your European history you will understand there needs to be more, much more than a declaration of separation to disrupt the world’s oldest economic alliance. And what may seem stressful now could soon be nothing more than a blip in the history books of two great allies whose ties run so deep they cannot be easily undone, nor would it make sense to do so.  

 

Portugal’s Prime Minister António Costa believes there will be an agreement with the UK in October, so any time now and in addressing Indian business owners in the UK, put out the invitation for British companies to, "come to Portugal and have a 2 for 1". Referring to keeping Brexit and accessing the EU area by setting up business in Portugal. Portuguese Economy Minister, Manuel Caldeira Cabral, on Bloomberg commented, “I don’t think that we are going to have a disaster. The links that connect European countries and the European Union are quite strong, so disentangling all these knots is going to be hard.”

 

With the well worn and robust relationship between the two countries and Portugal’s position as a gateway to Europe along with strong relationships with growing economies in South America, Africa and Asia point to an unfavorable outcome between Portugal and the UK as highly unlikely. Statements from both camps have also continued to be supportive and friendly with suggestions there may be differences, but different isn’t necessarily bad. With its recent tax and inward investment incentives Portugal looks ready and clearly intentioned to take a strategic position with the UK on Brexit. Suggesting these allies may be adjusting their bond from a position of renewed strengths to accommodate favourable changes rather than diluting them.  

 

Chris White, CEO of Ideal Homes, "Portugal has long been a top destination for Brits to holiday, buy second homes and retire. More recently we’ve seen a dramatic increase in holiday homes that are also used to generate rental income, and we’ve seen a rise in property purchases purely for investment such as; holiday rentals, spas and health retreats, and hotels." Chris who’s a veteran of the international real estate industry and regularly assesses countries for their property investment potential also notes, “Portugal’s Non Habitual Residency, Golden Visa, and inheritance incentives among others are not widely known, nor are the currently low mortgage rates at 1.75%, but these are often, a wise investors, deciding factors when choosing where to invest.

 

What does this geopolitical uncertainty mean for the average person going about their daily lives and attempting to plan for the future? It suggests taking note of the slowness of Brexit talks. There is considerable value in the established relationships and an intention to renegotiate favorable and mutually beneficial outcomes seems the priority. Portugal and the UK have been here before, and in considerably worst scenarios, and like old friends have weathered many storms with renewed resilience, so a sense of doom when considering resolutions between the two seems a naive notion. The future may not yet be crystal clear and nor is it likely to be identical to the past, it may however provide for new opportunities, not yet considered, and those could be well worth being ready for.

 

Ideal Homes will be at The Overseas Property Show 20-21st October at the Holiday Inn Birmingham Airport, Lancaster Suite 1&2, 10-6pm. There you can get a free individual consultation with experienced professionals to discuss everything from legalities, taxes and currency through to financing and managing rental investments, as the old adage goes -  it pays to be prepared.

 

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