Buying A House In France
by: Michael Bowditch
Copyright 2006 http://www.propertysolutionslanguedoc.com
There has never been a better time to take that money out of savings or re mortgage your house and look at buying property in France.
There has been a trend for many years for foreigners looking for investments overseas to buy property abroad. France has undergone quite a boom over the last 10 years in the South and S West. Areas like Provence have always been popular, but now quite a rough element has gobbled up properties and the “scene” has changed for the worse sadly. In Provence, they always, rather rudely, said that the Languedoc- West coast of the Mediterranean and bordering into Spain- was the poor mans Provence.
They can eat their words now. Look at the facts:
Encouraged by television holiday programmes and newspaper/magazine articles, foreigners have been buying up property, and pushing prices up in the Aude, Languedoc. Rather cruelly, the foreigners who owned property in Provence always referred to the Languedoc as the poor mans Provence.They can eat their words now! Look at the facts: House prices have risen 9.3% in a year on year comparison, making France the ninth best performer worldwide
According to the Fédération Nationale de l’Immobilier (National Federation of Estate Agents), house prices in France have risen by an average of 54% since 1997. The first quarter of this year has seen a slowdown everywhere except along the Mediterranean coast. This region saw a 10.3% rise during the first quarter of 2006 — compared with a 9.3% rise for the same period in 2005. Predictions remain bullish. One of the highest rises was the Aude, Languedoc, which saw increases last year 18%- the highest in France.
There are now an estimated 1.8 million Brits living and/or owning property in France. The most popular area for holiday homes, retirement properties and permanent homes is the Languedoc, with the most popular and affordable being the Department known as the Aude.The Aude has an excellent choice of airports: Ryanair fly to Carcassonne,Montpellier and Perpignon Flybe fly to Perpignon British Airways fly from Gatwick to Montpellier. Gone are the days of picking up a bargain for 15 000 euros. However, there are real opportunities of finding a village house in one of the many beautiful villages, some near to the Canal du Midi, for around 50-60 000 euros.
Now the legalities for buying in France:
There are many very good web sites that can give you all the legal jargon that you need on French tax laws. However, listed out below are some very important facts that you will need to know about before launching forth with your home purchase.
The purchase:
• Once the offer has been made to the vendor and has been accepted, a “Compromis de Vente” (intended sale) will be drawn up and a 10% deposit will be paid. This is legally binding, and avoids being gazumped!
• Once local searches and a certificate of “Free Title” have been obtained from the Land Registry, completion date can be set.
• In the Notaire's office, the “Acte de Vente” is signed. At this point, the final amount of 90% is paid. Also, Government taxes and Notaire's fees need to be paid (see scale of charges below) French Government taxes
• Houses less than 5 years old, taxes are 2.5% of the purchase price (no Stamp Duty payable).
• Houses more than 5 years old, taxes are between 10 and 12% of the purchase price.
Renting properties
Be aware that if you rent your property that is furnished, you will be taxed on running a commercial business. As a UK resident, you pay French income tax on the profits after deductions for repairs and in some cases, mortgage interest.
Selling French properties
If you sell your home as a non French resident, you are liable to French Capital Gains Tax. On the other hand, if you become a resident in France for a minimum of one tax year, gains on your main residence are exempt from tax.
Heirship
It is highly recommended making a Will through the Notaire when your home has been purchased as French law is very different to UK law. It is very complex and you will need to get good advice.
Social Services and charges.
Under retirement age, you may be required to contribute about 8% of your income to French National Insurance. This is higher than the UK but benefits are generally better. If you intend to run a small business (gite, B & B) expect to pay 20% of turnover in National Insurance contributions, and income tax rates can be very high too. There are ways to reduce this, and you will need to get advice. One idea is to plan to use a UK company for your business in France which can hugely reduce your liability, and in some cases this UK company will allow you to make up to £10 000 p.a. tax free.
Termite and lead inspection
Generally, surveys are not undertaken before exchange. However, if you require one, there are people who can undertake such activity. The most important action to take before exchanging money is to have an authorized inspector visit the property and report on termite infestation and the possible existence of lead. (Note: you are advised to seek professional advice. The author cannot be held responsible for any mis information)
Now you are armed with what to expect, look with keen eyes and realise your dream.
About The Author:
Michael Bowditch is a Property Finder in the Languedoc,FRANCE.
More info on http://www.propertysolutionslanguedoc.com
August 2006
Disclaimer: The information presented and opinions expressed in these articles are those of the authors and do not necessarily represent the views of BIZBUD.com and/or its partners.
Unless otherwise stated, the contents of this site are
Copyright © 2006 BIZBUD.com - All rights reserved.
Articles are copyright materials of their respective authors.
|
