French property buyers are set to benefit after a recent government announcement reduced the qualifying ownership period to be eligible for an exemption from real estate capital gains tax from 30 years to 22 years.
The change, which came into effect from September 1, is designed to boost the French housing market; which was hit hard by Francois Hollande’s decision to raise the qualifying period for the exemption from 15 to 30 years in February 2012.
In addition, anyone selling their property between September 1, 2013 and August 31, 2014 will get an exceptional additional tax reduction of 25%, which should start to boost sales.
UK buyers hoping to pick up a property in the coming months should start to consider their options now, before a surge in interest starts to make prices rise significantly, especially in the more popular regions of France. The average price fall in France in the past year was 1.4% according to data from specialists Knight Frank.
And with recent data from NatWest International showing that nearly a third of expats are considering moving back to the UK, a number of opportunities are being created for buyers.
Couple that with fixed and variable rate French mortgages currently at well below 3% interest and you have a powerful combination to fuel interest from British buyers who can benefit from this ‘perfect storm’.
Yet another benefit for UK residents looking to buy in France is the recent strengthening in the value of the pound, rising from €1.15 to the pound in late August to nearly €1.18 at the time of writing. This has the effect of reducing the cost of any property purchase you are intending to make in euros, which could save you thousands of pounds.
For example, buying a €200,000 property at €1.15 to the pound would cost you £173,913, but the same property at €1.18 to the pound would cost you £169,492 – a saving of £4,421 just because of changes in exchange rates.
You can make even greater savings by ensuring you are getting the best deal on your international money transfer services. This is why FrenchEntrée has partnered with currency specialist Moneycorp to offer you exchange rates that are up to 4% better than what’s on offer on the high street. On the above €200,000 property, a 4% boost to your exchange rate would save you a further €8,000 in the simplest terms.
You also have access to a variety of tools to protect yourself from exchange rate fluctuations during the weeks and months you are negotiating with the seller. The option to fix your exchange rate for a period of time in advance can be particularly useful if you are working to a tight budget, or just want to be sure that you know how much a property is going to cost you.
Moneycorp is available to answer your questions. Please call +44 (0)20 3773 6355 and if you mention FrenchEntrée you are entitled to FREE transfer fees on all your currency payments. Alternatively you can click here and submit an enquiry.