Q I’ve heard council tax is being scrapped in France. Does this apply to second homes too?
A Sadly not. It’s true that the taxe d’habitation, or council tax, is currently being phased out in France and will be completely scrapped by 2021; but this will only apply to main residences, not second homes. In fact, second homeowners could see their council tax bill go up.
As this tax depends on owners’ individual circumstances and is set at the discretion of local councils it’s impossible to give a ballpark estimate of the potential rise. But it’s likely to increase by a minimum of 5 per cent and up to 60 per cent for properties located in ‘tension zones’, where the demand for housing exceeds supply, such as in Paris or Lyon. This surcharge is referred to as ‘surtaxe d’habitation pour les residences secondaires en zone tendue’. One way to gauge how much council tax you’re likely to pay on a holiday home is to take the estimated taxe foncière (property tax) for the property and double it.
Q We’re planning a viewing trip soon, but haven’t looked into mortgages at this early stage. Could this be an issue?
A While not rushing to buy the first property you see is common sense (though it can occasionally be ‘the one!’), there is no point wasting your estate agent’s time – and your own – setting up viewings if you have no intention of buying or are in no position to make an off er. So make sure you have at leastst started the mortgage process and ideally have got a provisional agreement in place before a viewing trip. This will spare you the disappointment of finding the perfect home, but not being able to make an offer.
Q I have been watching Escape to the Château and am considering doing my own château renovation. Is there anything I should be aware of before tackling such a big project?
A It may sound obvious but renovation costs can add up very quickly, so make sure you know what you’re getting yourself into and that you have enough in the bank to see the project through. While there’s something irresistibly romantic about “escaping to the château” and doing up a crumbling stately home, we wouldn’t recommend tackling a top-to-bottom renovation.
Ruins are often money pits as structural repairs can cost a fortune – especially if the building is listed. So remodelling a château isn’t always worthwhile. While there’s financial help out there for listed properties, you may not qualify for funding. And even if you do, it may not be enough to carry out major restoration work. Just to give you an idea of cost, a complete rebuild can set you back €1,500 per square metre. You also need to factor in ongoing maintenance post-renovation.
Q Will I become a French taxpayer, the minute I move to France?
A Generally, when you move to France intending to live there permanently, you become a French taxpayer the following day. But you would also be considered a French taxpayer if, for example, your main residence – or principal activity – is in France.
Q Should I start thinking about money transfers before looking at properties in France?
A Yes. Having your finances in order is crucial. Once you’ve found your dream property you’ll be asked to sign a contract and pay a deposit, so you want to make sure you are ready – and don’t lose out to unexpected currency fluctuations. It’s also important to bear in mind that weeks and even months can go by between the moment you put in an offer and the completion of the purchase. As exchange rates can change in a second, you may no longer be able to afford the property when the time finally comes to transfer the outstanding balance. This is why timing and planning are so important. We’d recommend using a foreign exchange specialist and locking in a preferred exchange rate in advance. That way you won’t get caught out by unpredictable currency fluctuations and have to give up your dream home.
Q We are thinking of opening a B&B or gîte, but we’re not sure where to buy to maximise our income. Which area would you recommend?
A Well, that all depends on what you’re looking for. Every département has its pros and cons. The key is to find an area that will generate sufficient income all year round – not just during the busy summer months. So make a checklist of what you’re looking for and who you’ll be marketing the B&B to – ie, surfers, hikers etc – to narrow down your search area. Also consider the distances to such key facilities as shops, beaches, airports and ports, plus other things like road noise. Of course, proximity to local attractions and landmarks is always a plus.
Q I’m really surprised at how cheap property is in France compared to the UK. What’s the catch?
A Property is indeed generally cheaper in some parts of France, but if a house is suspiciously cheap, there is probably a good reason for it. It may be in a bad state of repair, or miles away from shops and amenities. This may not be an issue for some buyers, but always make sure you know why the asking price is so low before signing on the dotted line.
Q Where is the best place to invest right now?
A The Alps are always a safe bet and ripe with buy-to-let opportunities – particularly the sought-after resort of Chamonix. Paris, as you’d expect, is a great place to invest, especially in the 3rd and 4th arrondissements around the Marais and the 6th and 7th around Saint-Germain-des-Prés.
FrenchEntrée is more than just the leading guide to property and living in France. We offer a wide range of services designed to help you to buy a property in France. If you need a mortgage or advice on your international money transfer, FrenchEntrée is dedicated to assisting you through all the steps of your property purchase.
If you can’t find what you’re looking for, or don’t have time to search yourself, FrenchEntrée has a dedicated Property Team to assist you in finding your dream property. Let us know what you are looking for and we will do our best to select properties matching your requirements.