Coast and Country in France

For over a year now I have been working on the structure for a specialist Internet community for people wanting to buy Fractional Ownership property in France - as ever, delays and frustrations have hindered the work, but this is proving to be a strong advantage as we are benefitting from the serious mistakes being made in the few Fractional Ownership offers that there are in France.

With twenty years experience of being a stranger in this strange land, I am acutely aware of the strength and efficiency of the vast French beaurocratic machine - I have tasted the sting of the tax-mans lash and seen at first hand how this awsome (but fair) system works.

If you buy a property in France, you can rent it out simply and openly, there are no restrictions and it is straightforward. You must make a tax return on the income in France - there are fair allowances and it is profitable - there are tax agreements with most countries so you are not likely to pay tax twice.

However, (there is always a “but” in this sort of thing) if you buy a property in Fractional Ownership, this will be in the structure of a company, if the company is seen by the French tax authorities to be trading (that is to be making charges for a profit) then you will be liable for a tax of 3 percent of the value of the property per annum. This is in addition to any other taxes which will be liable.

The more complex the ownership of the Fractionally Owned property is, then the more the tax authorities in France will consider this as a “device” and persue the taxes due.

Our advice in all these situations is to keep the structure simple - useonly a French company for the property shares, have no overseas LLC, Ltd or Homeowners Associations involved - if you do it could be seen as a trading company.

But most importantly, make sure that the company rules do not permit any renting out of the property. If anyone rents the property to a third party then this will be seen as commercial use of the property and the annual taxation on the value of the property will apply. You, your family and friends can use your home of course, but avoid any Fractionally owned property where any income is shown or it is advertised for rental.

Do not risk taking the advice of anyone who tells you this is not the case - it is very simple, if a company rents out any property then this is considered a commercial activity and this tax is liable. The taxman can wait years and then claim all hte back taxes and interest and you have lost your home in France.

Fractional Ownership, French Property, french company, french rentals, french tax authorities, fruk, homeowners associations, Investment, life in france, living in france, Personal, Property rentals, property shares, Real Estate, Rentals

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It was only four years ago that our family was featured in the UK television program “A Place in the Sun” (you can see us in the book and one day I will put the video online) - Properties were being shown in Languedoc selling for well under 100,000 euro - now there is nothing you could live in at that can be bought at that price. I get a lot of mail from people who are looking to buy a home here and believe these prices still exist - I wish they did

This is part of a mail exchange I had today…

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Good morn Tony,

….Some friends bought nice property in Languedoc at a cheap price - a 3 storied stone townhouse with a garage for under 50,000 US dollars a couple of years ago with a gite. We were hoping to obtain something in this price too.

Before we make the wrong jump into an expensive real estate investment perhaps we should do a mini tour of France and decide if it is a feasible relocation and determine a true financial package/plan.

I appreciate you sharing your wisdom and hope to meet up with you during our tour. Do you have a dog? I’ve read that the French take them to restaurants.

Enjoy some wine, bread, and cheese for us…

Beverley

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Hi Beverley,

As I said in my last note, you need a time machine for Languedoc - when we moved here 18 years ago old village houses could be bought for two thousand euro and farm land was given away. Luckily we bought our property with every penny we had.

Prices have risen fast over the last ten years, houses I saw sold for 20,000 euro are now selling for up to twenty times as much - the demand is for traditional stone houses with charm as all villages and towns are expanding at a logarithmic rate - the classic old houses are now a rarity.

The reason is that Languedoc was a quiet backwater for eight centuries, everyone went down the Rhone valley and turned left for the Cote d’Azur. But now with a massive investment in rail, road and air communications (the biggest communications investment in Europe) the Languedoc has opened up and the population will double in the next few years. This is not a problem, it will still be among the lowest population densities in France, but the combination of the demand and the best climate in France has had a dramatic affect on property prices.

Today all you can hope to find for 30,000 euro is a total ruin with no land, this will cost from 100,000 euro to renovate, stone built houses cost the earth to work on.

However, this does not mean that property is overpriced - far from it, compared to other regions Languedoc is still underpriced and prices are still rising steadily, in fact now is the time to buy as new-build on newly released, partially subsidised building land is absorbing the demand and this is making the shrinking pool of quality older properties even more attractive, yet they can still be bought for the same price as new houses.

The lowest cost property we have on our books is at 55,000 euro
http://www.coast-country-france.com/french-property/2956.html
Here are some internal photos of this house which I estimate will need at least 50,000 euro spending on it
http://www.facebook.com/album.php?aid=5442&l=0dc1a&id=713410945

I must admit that my personal preferences and locations are dictated by climate, the Mediterranean climate is often chilly in winter and I would never consider living anywhere colder.

We have three dogs, yes you do see dogs (never ours) sitting at a table at lunchtime in a restaurant, you will find the evidence of dogs everywhere in France - the streets are famous for it.

Many thanks - I will certainly continue to enjoy my life here in the South of France, bread, wine, cheese and all.

Hope to see you when you make your trip

Best wishes

Tony

buying a property, coast country france, dogs, dogs in France, europe, facebook, French life, French Property, Investment, Languedoc, Languedoc housing, languedoc region, mediterranean climate, Personal, place in the sun, property in languedoc, Real Estate, village houses

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June the first and according to the British tabloids - summer is here.

I am giving myself just fifteen days to get a couple of new Internet projects operating, well three really as we have just found a need for another one.

These are all community sites which bring people together for services and information wanted.

The one closest to my heart is a community for vacation renters and owners of vacation properties. There are plenty of pay-for advertising sites, but how do you know who to trust now, either as an owner being asked for cash, or a renter with no guarantee that the site is telling the truth.

Well, soon we will be giving you the answer to that, give me a couple of weeks.

Here is a typical mail I got today…

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Hello, I would like to find an apartment to rent in St. Tropez for one week in July but I would like to contact people who let their apartments privately. I have only been to France a few times and have never rented a private apartment anywhere. I hear that it’s a great way to stay abroad, providing the necessary research is done, but I don’t know how to go about it. If you have time and can give any advice about this it would be gratefully received.
With thanks,
Jane

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Hello Jane,

When I was operating vacation rentals sites for France we handled thousands of private rentals over a ten year period and the vast majority of renters and owners found this to be a happy and enjoyable experience.

I do not run these at present, but I can recommend a site http://www.vrbo.com/

If you find something you like, be sure to exchange some emails with the owner and get a good “feel” for them, speak on the phone, they will be just as concerned that you will look after their home as you are wanting a nice place to stay so it works both ways.

I am working on a new community site for renters and owners to give a place where these contacts can be made and people can share experiences, ideas and understand the agreements payments etc. Do keep in touch with my sites and if you have any problems finding a place please write again.

best wishes

Tony

french rentals, internet projects, Personal, property in france, Real Estate, Rentals, rentals in france, renter, vacation properties, vacation renters

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