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| France Buying Guide Newsletter |
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| Hi, As you read this, Mid-summer’s day will have come and gone, the long stretch of each day grows a tad shorter now. You may be about to go on your summer holiday or at least have one planned and I have been thinking about all the great times I have spent in various parts of France over the years. I am often asked about the best places to buy both for a holiday home and as a second or even first home. I have to say that I always find that a difficult question to answer: us Francophiles are really spoilt for choice aren’t we? France is a huge country but the beauty of it is that all of it is pretty much within an hour and a half’s flight from the UK so the choice really is yours. If you have not already done so, have a look at our extremely comprehensive France Buying Guide, which has an overview of each and every region in France. This may just help you focus on your ideal area: http://www.francebuyingguide.com/guide.htm With the world’s top tennis players busy warming up for Wimbledon fortnight, we are offering you some hot tips in this June issue on how to net yourself a bargain in France, even in these difficult times of credit crunch and weak pound. You can sit back and relax in your own armchair whilst you read of how you can still find a bargain property in France. Hard times or not, the prices there are still way lower than here in the UK and you will find some realistic prices as owners are prepared to negotiate on their asking price. Yes, it is very much a buyers’ market in France so step right up! As well as our hot buying tips, in this issue you will find a great article on financial planning which may well open up some doors for successfully buying in France you had not thought about before. More than that, we can also put you in touch with just the right people if you want to raise the finance you will need, either in France or the UK, through tailored solutions specifically designed to meet your needs. To take us up on this right away, click here: http://www.francebuyingguide.com/resources.htm Next, the inimitable Charles Purdy offers you his advice on currency preparation: a must for all of us when we are buying abroad. Do read his words of wisdom: you will undoubtedly save money. I am often asked about whether it makes sense to buy in France under a company name or “SCI”. This is something that is well worth considering: it can make your bargain property even more profitable for you since it may allow you to avoid French succession laws. Our recommended bilingual lawyer has given me some insight into this and here I share it with you: read on! Finally, our regular property feature: a simply gorgeous cottage with plenty of land around it. When you see what you can get for under £100,000 in France, it does make you wonder what you are doing here! I really enjoy chatting
to my readers and am delighted to know that our information is proving
so useful. You are always most welcome to send me your questions, stories
or simply call for a chat about our favourite subject: France. Please
feel free to call me or email me whenever the time is right for you.
I hope you enjoy reading this month’s newsletter as much as I
have enjoyed writing it. Alexis
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My top 10 tips for netting your very own French bargain property!1. Take good, unbiased advice This is where we at the France Buying Guide come in: we are independent, objective and professional people who give you valuable advice. You may find outsiders or estate agents have their own agenda: remember agents are not necessarily objective so keep your own criteria to the fore always and let us do your homework for you: we can put you in touch with our own trustworthy organisations, be it agents, lawyers, IFAs, mortgage providers. 2. Define your criteria well Think carefully about what you are looking for. Don’t be swayed by something that looks “nice” but has not, for example, got enough bedrooms. Keep to what you really want! One of my readers told me she almost fell for a beautiful apartment in the Languedoc-Roussillon. It was in the right location, was in a style she loved and the price was just under her budget. BUT it didn’t have any outside space, not even a terrace. Luckily her head ruled her heart after the temptation had set in and she went on to find an equally lovely place WITH a terrace – and realised she could not have done without at least a little space for her glass of wine in the evenings! 3. Ask questions about each property which tempts you and don’t forget to seek out those reductions! Decent agents will happily listen to your questions and answer them as best they can (plus we can help you find those agents!). Find out just as much as you can about the property AND the location, the amenities etc. It is a buyers’ market in France and many properties have been reduced – and many others still will consider offers of up to 20% less than the price they are asking. The agents we recommend will guide you as to which these are: make use of them! 4. Consider your finances In these difficult days with our weak pound, it really makes sense to consider your options: funding your French property in the “right” way for you may well save you considerably. For example, it may make complete sense to take out even a small Euro mortgage instead of using your hard earned cash for part of the property purchase: this way you avoid the unfavourable exchange rate and there is a whole range of options for Euro mortgages with interest rates consistently being lower than for Sterling mortgages. Again, I can help you with this, just let me know and I will put you in touch with an excellent Euro mortgage broker: http://www.francebuyingguide.com/resources.htm 5. Stick to your guns, be firm about your wants and needs always It is far better to take a little longer to find what you are really looking for than to change the goalposts because something looks tempting: put time and effort into making a list of “must haves”. Family and friends will all offer advice and no doubt their opinions matter to you. But don’t lose sight of the fact that this is YOUR plan and will be YOUR decision. Being firm about your criteria generally is likely to stand you in far better stead later on and ensure you do not find yourself wishing you had perhaps waited for the real thing to come along. 6. Never sign your house sale contract until you are sure you understand it! This may seem an
obvious one but in the excitement of buying your French property, you
may overlook the importance of getting that first contract (Compromis
de Vente) correct. This is a binding contract and you cannot get out
of it once you have gone past the 7 day “cooling off period”.
If you don’t fully understand everything, get your own bilingual
lawyer to act for you. A little money spent now could well mean a greater
saving later on. 7. Don’t ever use a bank for your currency exchange This is vital: banks not only charge commission on foreign currency transfers, but you are also likely to be offered a rate between 2% and 4% higher than a currency exchange company like Smart Currency Exchange. It is not difficult to see that on large amounts the difference can be staggering: often as much as several thousand pounds. Have a quick read of Charles’ words of wisdom later on in this newsletter. 8. Make a calm, considered decision Again, this is vital: many people opt to live in France because of the delightful lifestyle: a very good reason. However, don’t underestimate the good things about your home in the UK. For example, you may be wishing to find your rural idyll which is “away from it all” but you really don’t have to live in the middle of nowhere to enjoy a better lifestyle. Consider whether it might just be better to be somewhere which is in walking or biking distance of local shops and amenities: getting in the car each time to buy your croissants in the morning may grate after a while! 9. Take more time rather than less: don’t rush Let’s just say you are about to tell the agent you are interested to buy a property. Before you do this, stand back and ask yourself if you are doing the right thing and if you have been totally objective in coming to this decision. Give yourself, say, half an hour to make sure the property you are about to put an offer on ticks all of your boxes. 10. Last but by no means least: remember that you are in the driving seat at all times: you are the one in control, no one else! As I said at the beginning, it is very much a buyers’ market in France at the moment. Prices are at an extremely realistic level, there are reductions across the board and owners – particularly Brit owners – are prepared to negotiate hugely. Buyers can find an excellent property for their money now and remember finally that however you care to look at it, prices in France are STILL some 40% below house prices in the UK! Our France Buying Guide contains a wealth of information on buying in France as well as an overview of every single region to help you make up your mind if you are undecided on just where is right for you. You can download it digitally or I will be pleased to send you a hard copy first class in the post. It is reasonably priced and actually consists of 3 documents: the main Guide of over 100 pages, a “Questions & Answers” document with lots of useful links and a handy series of “Worksheets” designed to help you plan your French purchase. You can get your copy by clicking here: |
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How to stop your pension from decreasing!by Smart Currency’s Charles Purdy.Why are ex pats living in such places as Cyprus, Greece, Italy and France feeling worse off? SIMPLE…the € has devalued by 15% over the last year. Now, when an ex-pat receives their pension from the UK, they are getting 15% less in €’s compared to this time last year. Also, we have to remember that inflation is on the increase, especially energy and food costs, which means that budgets are being stretched even further. Not a happy picture. Say you are receiving £1,000 per month as a pension payment. If you had put a forward contract in place this time last year you may well have secured an exchange rate of €1.43/£1. This would mean that you would receive €1,430 per month. The average exchange rate over the last 12 months was probably closer to €1.30. This means that if you had exchanged your pension each month, over the course of the year you would have received €1,500 less. The cost of a new lounge suite! How can future pain be avoided? Again the answer is SIMPLE. By using a company such as Smart Currency Exchange you can secure an exchange rate for those future pension payments by using what is called a “forward contract”. This may sound complicated but it is really very straightforward and it will ensure that you know exactly what you will receive each month making budgeting much easier. Also you will save significant transfer costs when compared to your bank which, over the course of a year, could save you another €500 plus… Sound good? Then the next step is to have a SIMPLE discussion with Smart Currency Exchange to see if we can help you. To read the latest on Currency go to: http://www.FranceBuyingGuide.com/Currency260608.htm and if you haven't already read this report, please get it now: "Why
overseas property buyers lose money... This 10-page educational report outlines:
And just a couple remarks about the report from our readers...
To get a copy of the report at no charge go to: http://www.smartcurrencyexchange.com/freereport.htm To get a Better-than-Bank
rate go to: http://www.smartCurrencyExchange.com/smartsquotation.htm
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This month’s stunning French residence!
The best bit is outside though! There is a barn and attached workshop and hangar with a shower room and WC which could very easily be converted to provide further accommodation for a gite. The remainder of the land consists of 4 paddocks - the present owner has horses so it is already set up for livestock. Overlooking the paddocks is an outside eating area with lights and a delightful wooden gazebo. The price? Just €136,000 for the lot! If you would like more details about this lovely property or others like it – anywhere in France, simply send me your property form and I will put you in touch with our recommended agents straight away. |
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Sorting your finances out...Dealing with your money sometimes seems like an impossible uphill struggle and yet we would suggest that it has never been so important for a variety of reasons. Currently it is all over the media that we are in the middle of a credit crunch, that there is dented confidence in the UK property market and doubts that people have sufficient retirement planning. We find this leaves people very confused as to how they can improve their current situation and plan for a stronger future, which is why they turn to IFA’s. Many people will first turn to friends or family members for advice but not many of these people are qualified financial experts. Another option is to use your own bank; they obviously have a limited supply of their own products and have the brand power that doesn’t necessitate the need to develop highly competitive products. The main alternative in the modern era has been to use the internet for research. The web is a very valuable tool with the potential for millions of applications. However this can also be its downfall, in that it is a reactive database. It will only respond to your range of knowledge and subsequent questions. Furthermore, the cheapest product will normally be at the top of the list – and as we all know from experience, the cheapest is rarely the best! In our experience there are two main factors involved for people who are serious about sorting their money out. 1. Relationship
2. Niche Expertise Obviously in each area of your finances it is vital to have an independent specialist whether you are interested in savings, tax advice, property, legal affairs or alternative investments. It is reassuring to know that the advice you are getting is from a dedicated and qualified professional. We have an IFA to recommend that we believe offers the best of both worlds. Each of their clients has a committed consultant whose role it is to orchestrate a team of experts, creating a bespoke solution for your money, regardless of your current financial situation. Please go to: http://www.francebuyingguide.com/resources.htm or contact me on mailto:Alexis@OverseasGuidesCompany.com | ||
Buying property in a company name in FranceThe apparent ‘fashion’, very much in evidence a few years ago, for individuals to purchase French properties via some form of company appears to be on the wane. Nevertheless we do still get asked on a fairly regular basis whether it is worth considering. Although in the majority of cases the answer is usually a fairly clear ‘no’ there are sometimes occasions when purchase through a company is appropriate. One of the main reasons why individuals choose to use a company to purchase their French property is to avoid the provisions of French succession law. This, as many readers will be aware, gives forced inheritance rights to certain members of a deceased’s family, notably their children. When an individual owns property through a company, it is the company shares which change hands when the individual dies. As shares are classed as moveable property, under both French and UK law these will be subject to the law of the deceased’s country of domicile. Therefore, for French property owners who remain domiciled in the UK it is UK law which will apply – giving the individual the right to leave the shares as he pleases. It should be noted, however, that there have been cases where ownership of property through a company has been successfully challenged in the French courts when it can be proved that the primary motive was to avoid succession rights. Companies are also sometimes used where a number of couples or individuals wish to purchase a property for their joint use. By using a company they can have a more businesslike structure, with a few ground rules. They can also provide that, in the event of the death of any one of them, the surviving owners will have the right to buy out the shares which pass to the deceased owner’s heirs, thus limiting the potential ownership of the property. The type of company most commonly used to buy real estate in France is the société civile immobilière or SCI. This is a ‘civil objects’ company under French law. There is no real equivalent under English law but it is sometimes likened to a partnership rather than a company. This is because, whilst it remains within its ‘civil’ objects the company is fiscally transparent under French law, meaning that it is not subject to French corporation tax (Impôt sur les Sociétés or IS) but the shareholders are taxed as individuals on income and profits which the company makes. An SCI is not a limited liability company which means that any shareholder could, theoretically, be liable for all of the debts of the company. The French equivalent of a private limited liability company is the société à responsabilité limitée or SARL. This type of company is not generally transparent – meaning that it will be subject to French corporation tax. An exception is a form of family-owned SARL which can be transparent, subject to the same restrictions as for an SCI. Those based in the
UK may wish to use a UK company for their purchase. In the past the
advice has generally been given that, since a non-French company cannot
be transparent under French law, then it will always be subject to IS
on its income and profits. Recent French case law (jurisprudence) however
indicates that, under the provisions of the France/UK taxation treaty,
a UK company which sells real property in France will not be liable
to IS on any gain realised provided the company does not have a permanent
establishment in France. However, as many notaires and tax advisors
remain unaware of this point owners may find the costs and hassle of
arguing their case may outweigh the tax advantages of the decision.
Any company which owns real estate in France is potentially liable to an annual tax of 3% of the property value. In the case of companies based in France itself or in countries (such as the UK) which have mutual arrangements with France for the avoidance of tax fraud, this annual tax can be easily avoided by a simple undertaking to provide certain information relating to the company and its shareholders, on demand, to the French tax authorities. In the case of off-shore tax havens no such arrangements will exist and therefore the tax cannot be avoided in this way. Finally it should be remembered that even the most basic of companies will require some level of administration such as the holding and minuting of general meeting at least once a year and the keeping of basic accounts. In addition there are quite significant costs associated with the setting up of French SCIs or SARLs. The more complex the structure (e.g. companies owning other companies) the greater the costs are likely to be and the more there is to go wrong. In the majority of cases, particularly where couples or families are involved, there will be a simpler and cheaper solution. There will always remain situations in which a company structure is appropriate but always take advice before using this route. If you need more
advice on this subject, or would like to take advantage of a bilingual
laywer’s advice, or indeed any other aspect of buying or living
in France, please just email me at: mailto:Alexis@overseasguidescompany.com
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There is no doubt that we live in difficult times: the credit crunch affects many of us and the weak pound is naturally making people nervous of buying property in France. But hopefully this newsletter will throw a little light on the situation. As in many areas of life, it is important to look forward, not back and keep focused. Sure, the property you are after may now cost a few thousand euros more than it was, say, 6 months ago but with no real sign of the pound gaining much strength in the medium term future, netting that bargain property now instead of 6 months hence may just find you rubbing your hands with glee: it could cost you a lot more in the future! I shall be going to Montjoi for a few days mid-July and will be joining in the village festivities for Bastille Day on the 14th July: France’s most important day, roughly equivalent to American Independence Day and a national holiday in France. As always, I shall be keeping my ear to the ground for stories to relate to you in next month’s newsletter. Of course, I welcome your own stories, queries and anecdotes. Take a look at our France Forum and please add your own: I read each and every one! The testimonials for the France Buying Guide continue to come in apace:
It is a pleasure to help you achieve your dream in France. Please feel free to call me on the number below or pop me an email. You will always receive a speedy reply. Kind regards till next time, Alexis |
