Coast and Country in France

Hi Tony

I’ve been enjoying your newsletters for sometime time now and finally taken the plunge in buying property in France. We have just signed the contract for a new build - and I know I should have addressed earlier that nagging problem at the back of my mind about French Inheritance laws. I guess it’s case of better late than never…. can you advise or point us in the right direction for advice please! (I really didn’t fancy explaining our family details to the local notaire…)

regards

Sarah

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Hello Sarah,

If you have any complications, even simple ones, about inheritance, previous marriage, other children or family problems - you must make sure the purchase of a property in France is structured correctly before the final Acte is signed. Very little can be done after this, it must be done before.

A Notaire is (theoretically) the best person to do this, but in my experience they rarely volunteer information or advise, it is assumed that you already know the options and will instruct them. It is a matter of knowing which questions to ask and if you know the question than you probably know most of the answer, this is one of the cultural differneces betweeen France on many other countries.

A search on Google for something like - Property Inheritance France - will yield a lot of websites and masses of advice, but my advice is to discuss your own personal position clearly and precisely with a Notaire or an independent advisor - the advice from a Notaire will be free.

It really is a minefield and unless your family situation is very simple (no other relationships, no kids, no Parents, no relatives etc) you need professional advice. Do not just read a lot of Internet pages and find one that agrees with what you think you would like to know.

An independent advisor must have adequate legal insurance to cover them in the event of the advice causing a problem in the future, many advisors do not have this and you must ask.

Hope this helps

Best wishes

Tony

acte, buying property in france, French life, french inheritance laws, Investment, Personal, property inheritance, Real Estate

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I have been writing about Fractional Ownership for nearly two years. The idea appeals to me and I believe it is a good and sensible way to have the use of a luxury property. I do not believe it is an investment to give income, nor do I see it as a way of getting into property investment - I consider Fractional Ownership as a luxury product .

I have been worried about the tax implications and have had many discussions with specialists.

One of these is an American lawyer I have gained considerable respect for, Andrew Sirkin, he has just sent me a paper he has written about this and I consider this to be open, well researched and as up-to-date as anything that exists. He has given me permission to share this and you can see it online at…

Fractional Ownership in France

I strongly recommend that anyone interested in Fractional Ownership in France reads this thoroughly and carefully.

Building in France, Business in France, Fractional Ownership, fractional ownership, fractions, French life, French Property, Investment, living in france, Personal, property investment, Real Estate, tax implications

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Sixteen years ago in France I started developing an old property in the super Mediterranean hillside village of Sorede as our family home. We are now selling this as I want to concentrate on our new Internet businesses, the market is always slow this time of the year and I know we should wait until Spring, but if you want a fantastic bargain, I have reduced the price from 350,000 euro to 219,000 euro for a quick sale.

It has four bedrooms, three bathrooms and a view over the vale of Roussillon to the Mediterranean and across the mountans to the Pyrenees yet is is in the center of one of the most popular villages in the South of France.

You can see full details at…

Our Home in Sorede

Contact Me for more information.

There is 1,600 sq feet of living space plus a 4 car garage, garden and other space -

Building in France, French life, fruk, hillside village, Investment, Languedoc, living in france, mediterranean, Personal, pyrenees, Real Estate, south of france

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I have been researching and writing about Fractional Ownership in France for the last eighteen months - there are not many examples of properties sold in France in this way and I thought we would set up a new website to offer this so we created www.HarmonyOwnership.com to offer properties and give help and advice.

I have removed a lot of the offers from that site as the more I looked into this subject, the less “comfortable” I was feeling about the way it is being presented.

All the people I found who are selling shares seem honest, trustworthy, sincere and enthusiastic - but - I believe most will face serious financial and legal problems with their shareholders when the implications of the French tax liabilities come home to roost.

There is a recent post in my which blog touches on a couple of the points I am worried about, a writer recommends an International lawyer who I respect, but although his firm claims experience with six thousand Fractional Ownership contracts, at present they have only completed two in France.

I know of properties for sale in France which, due to bad advice, instead of reducing their capital gains each year, actually have an increasing annual capital gain liability because they bought their property in an offshore company share structure.

Don’t get me wrong, I believe Fractional Ownership is a very good way of having efficient and viable use of a property, but I consider it a luxury purchase, not an investment and I think it should be done simply and totally within a French structure with no complications of overseas ownership or associations.

Fractional Ownership, French life, Investment, living in france, Personal, Real Estate

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If you are looking for a place to stay in France then you may want to know what sort of town or village it is, how big, what shops and services, what sort of population and type of people, jobs, layabouts etc.

I get a lot of questions asking me if there are restaurants, how many English speaking people are there etc. etc. - to be honest, I don’t know the answers, but I can look very clever as I simply use this brilliant site which which has details of over thirty thousand places in France - the example on this page is Pouzols Minervois, a small hilltop village between Beziers and Carcassonne.

The information is usually to or three years old and comes from government statistics, but is does give a very good idea of the size, services, income, changes etc, especially if you use the comparison service

coast country france, Discover France, French life, Languedoc, living in france, Personal, Property rentals, Real Estate, Rentals

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We (about us) have been living in the South of France, in Lyon and Languedoc, for the past seventeen years. We first moved into a rambling tenth century ruin in Nizas and then three years ago into our 19th century home in Montblanc.

I have said that, apart from wine there is only tourism in Languedoc - well, that is changing - the region is booming, commerce, distributuion and industry are now following the massive investment in road, rail and air connections to the South of France.

This is creating a growth in the housing market, on average, prices have doubled during the last six years, and, unlike some other regions, there is still strong growth indicated in most areas of Languedoc Roussillon.

However, pressure on the market in other countries and regions of France is encouraging some owners to drop their property prices in Languedoc.

Here are three properties which are very attractively priced…

Pezenas Town House
A classic town house in the heart of Pezenas - fully modernised, sold fully furnished - you can move in tomorrow - a very comfortable family home with the unique feature that it can be very easily adapted to three self contained apartments - this is a gem for a family home or an investment for 180,200 euro

Sorede Family Home
This 19th century property has been made into a spaciaous and confortable home - from the kitchen terrace you can see the Mediterranean and you are in the center of Sorede, one of the most popular towns in Languedoc Roussillon 4 bedrooms, 3 bathrooms, huge garage, garden, this property has the lot and the price has just been reduced to 260,000.

Pouzols Minervois Medieval Houses
If you want a real bargain and an exciting project, then this is a very special offer. Not one house but two medieval properties in the center of a fortified hilltop village in the Minervois, between Beziers and Carcassonne one house is ready to live in , part is needing revovation and one is original with the old stone sink and original Languedocian fireplace. There is more, the main house even has a swimming pool on the huge roof terrace looking over the vineyards from the highest point in the village. The owners are sad to part with this home they love, but it is all on offer now for 160,000 euro for all the properties, gardens and courtyard.

Building in France, buying a property, Discover France, hilltop village, Investment, Languedoc, Languedoc housing, languedoc region, leading real estate, living in france, Personal, Real Estate

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There are strong links between Canada and France, although I do remember seeing a French Canadian film in France once which had to have sub-titles so people in France could understand the French spoken in Quebec.

Here is a mail I got today. If anyone in France would like to write to David and Kathy, please write a comment on this blog or contact me
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Tony

We really like your site. Lots of information. We are living in Canada but would like to find a home in France. Our question to you is. Do you have any Canadians that you know of living there and in your database? We would like to get the perspective from their point of view as we’re not just a quick link across the channel.

Many thanks,
David and Kathy
Barrie, Ontario

French life, fruk, living in france, Personal, Real Estate

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I have been involved in the marketing of property in fractional ownership in France and started the first information website www.harmonyownership.com about this interesting way of sharing the real freehold of a property in France early last year.

However, I decided not to jump in the deep end until I had thoroughly researched many of the tax and legal implications fractional ownership has in France. I believe the ways that many offers are being made and the way shares and ownership is structured through American or British companies is going to cause serious problems for the shareholders in a few years time due to the French tax rules.

One person I am following closely and who I believe is offering a very fair and well structured fractional ownership of Paris apartments is an American in Paris, Steve Navaro - you can see his offers through his website at parishomeshares

I plan to be in Paris in the next couple of weeks for a few days, one reason for my visit is to meet Steve and I will report about him and his property offers in this blog

Fractional Ownership, French Property, Paris, Personal, Property in France, Real Estate, shared ownership

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There are some changes afoot in the tax and social security system for people living in France, things like health charges for early retired new residents and wealth tax. I will write up some notes and references to good sources.

One recurring question is about Capital Gains Tax on selling a second home - as far as I am aware there are no recent (this year) changes and it simply depends on how long you have owned the property, where your main residence is and if you have had allowable works done by an approved registered French builder.

The Notaire dealing with the sale is responsible for decisions on what is due and collecting the tax when you sell.

Her are a couple of recent emails I have had.

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Hi!
We are a US couple who has owned a home in the Ardeche for 6 years. We are interested in selling it and wanted to find out what type of capital gains taxes, and other fees would be involved in this transaction. Is it true that there is a 10% discount off capital gains for every year after 5 yrs that you own the house? Do you have any idea where we can get more information on fees involved and other important information on selling a house in France as an American. Do we need to claim any of this income in the US?

Thanks in advance for your help! We greatly appreciate it.

All the best,
Susie

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Hello Susie,

As a US resident you will pay 33 percent capital gains tax on the difference of the purchase price (including agents and legal fees) and the selling price.

This reduces by 10 percent a year after five full years of ownership, so after the 15th year of ownership (usually in the 16th year) there is no tax due.

The tax is collected by the Notaire handling the sale.

There are no other costs you have in selling, the taxes and Notary fees are paid by the purchaser and the realtors will add their commission to your selling price.

If you have had significant alterations done by a French registered builder (extensions or other added work) the cost of the valid French invoice can be used to reduce tax - but repairs (even major repairs), decoration or work you do yourself cannot be offset.

After French taxes, any profit you make on the sale will need to be declared to the IRS in the USA. I advise professional advice regarding your position in the USA.

Hope this helps - do let me know how you get on

Best wishes

Tony

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NB

The tax due for a European Community resident is 16 percent

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Tony
My wife and I have a ski apartment in Chamonix worth £200,000, which we bought in 1991 for £76,000.  We would like to give it to our four children. We have seen a French Notaire who says we can use “Usufruct” to do this without paying any French tax.  Charges would be £4,000,and it would be no business of the British tax authorities.  Our accountant says otherwise.  She says we would be clobbered for about £40,000 CGT,less indexation and personal allowances.  Can you advise us where to go from here?
David

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Hello David,

The French Notaire is correct as you will have no CGT to pay.

Capital Gains Tax  (TVA in France) on a maison secondaire for a  European resident is 16 percent. However this reduces by 10 percent per annum after the fifth year so after 15 full years there is no CGT to pay on your property as you bought in in 1991. The maximum CGT you would have been under 20000 pounds anyway - your accountant is well out of order.

To use a Usefruct and to transfer this to your children while you have the full use and benefit may be a good idea as this will reduce your capital for wealth tax considerations.

Do let me know how you get on

Sincerely

Tony

Building in France, fruk, living in france, Personal, Real Estate

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I thought I would publish this reply I made to an enquiry for a property I am selling as I get a lot of questions about the cost of renovations.

There is a big difference in DIY or home repairs in the UK or USA compared to old houses in Southern France. Houses here are typically stone built using building techniques which had not changed for a thousand years. It is hard to date some houses as the contruction and style altered little from the 10th to 20th centuries and the massive beams and stones with lime morter and roman tiles are a million miles from timber frames and concrete blocks.

I have seen only too often financial problems when an enthusiastic purchaser starts a renovation project, only to find their money has run out less than a quarter of the way through the project.

The bottom line is that there is no cheap solution, skimp the work or do it badly and the property is probably worth less than you paid for it. Do it well and you will have a gem of a property, but it may not be the bargain it looks at first sight.

Caveat Emptor

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Hi

Please contact me now about medieval house to renovate

medieval house to renovate ref35

What do you anticipate the costs for renovation and what is the availability of craftsman? Thank you.

Carol

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Hello Carol,

It is impossible to give a simple reply to any questions relating to costs, my personal observations suggest that any property in France, to a good standard of occupation and quality, will cost from 2,000 euro per square meter of living area - plus a premium for land/gardens/convenience/etc. This is for property in Languedoc, Paris is from 6,000 to 12,000 euro and prices through France vary from 1,200 euro to 12,000 euro per square meter or more.

I have a lot of property on offer and some interesting old properties are not expensive, but conversion can be expensive - renovation will cost from 3,000 euro per square meter and there is no limit to costs - this particular property is interesting - it is in a super village and has potential. The owner will accept a fair price and you can have a rare property. You could own a nice small property for under 100,000 euro

Always take care selecting work-people, there are many good tradespeople in France, but there are also a lot of fools and rogues - I can advise a little to avoid bad mistakes.

Let me know your wishes

Best Regards

Tony

Building in France, buying a property, Discover France, French life, French Property, Investment, Languedoc, Languedoc housing, living in france, living in france, Personal, properties in the south of france, Property in France, property in languedoc, Real Estate

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