UKC

Hi All,

I know there are quite a few people on here who live in France, or who own property there.

I've tried google but can't find any simple answers, so to the fountain of knowledge version 2. ......

Can anyone tell me of costs involved in buying and owning property in France.
i.e. any transaction taxes, ongoing taxes (council tax equiv. flat annual service charges.)
Assuming the purchases itself is in cash so no banks involved.

Thanks

In reply to ClimberEd:

I don't know anything about buying a copropriete (flat), but I can tell you about the rest.

If you're buying through an estate agent then you need to see what their charges are or if it's advertised as FAI (agency fees included) because agency fees are massive in France. I think the agency fee on our place was something like €10k.

You also have notaires fee which also includes in it the transaction tax as well as solicitors fee. Again, this is loads of money. If I remember correctly we had over 20k in fees between the estate agents and the notaire.

Wen you have purchased a place you will have to pay annual tax d habitation if you live in it or the person occupying it on the 1st of January does. There's also tax fonciere, which is just a tax on owning somewhere. The amount you pay depends on the value of the property and which department you are in.

I guess with purchasing a flat there will be some annual maintenance costs and other fees to do with the management of the building.

In reply to Phil Payne:

We live in a flat in a 'copropriété' and Phil has explained the taxes, they are related to the value of the property but vary enormously from town to town (friends in the building across the road from us, in a different commune & Dept, pay about half of what we pay for a similar flat). We also pay monthly charges which cover heating, water, cleaning of communal space, etc and frequently get bills for our share of repairs - these are agreed by a committee of residents but once agreed, all have to pay. For example, the lift has been declared unsafe a couple of days ago so will need fixing or maybe even replacing so we expect a bill for our contribution towards that in the near future.

In reply to ClimberEd:

Don't forget to investigate French capital gains tax - for if/when you come to sell the property.

Many holiday home owners (ie. the property is not the owner's main residence) have a large shock when they come to sell up.

In reply to interdit:

Presumably you don't pay CGT in both France and the UK in such a scenario. And if not, how is the payee country determined?

In reply to interdit:



Research into this is crucial, as well as research into French inheritance tax, or 'droits de succession'. At one time we actively considered buying property in France and were intending to be resident in France for >183 days a year and therefore considered resident for tax purposes. So, after death, all worldwide assets are within the scope of French inheritance tax. As we weren't intending nor able to transfer UK assets in advance to beneficiaries, the fact that the whole of the estate (UK and French assets) is liable to French inheritance tax, even though a beneficiary may not be resident in France, was an immediate stopper in our case. I'm sure that there are ways around this, such as not being in France for more that 183 days, or employing specialists in the field to minimise any financial exposure, but we'd learnt enough from our research and so decided to go no further.

In reply to ClimberEd:

Thanks all,

Lots of useful information and stuff to investigate - as I thought, not quite as simple as it may seem.

In reply to Fraser:


No, you don't pay twice. Such things are covered by 'Double tax treaties'.
I would take advice on such matters from a professional.

A good notaire is worth finding as is a good accountant versed in the regulations and laws of both jurisdictions.


The people that sold us our first house in France hadn't entered the French system and were not officially French residents (they effectively had been fiddling their taxes). On the day that the transaction went through the notaire took 16%* tax from them. They were not expecting this (they were dim), were very upset and had to very rapidly find money from elsewhere before they could complete the purchase of their new pad on the same afternoon.

* I think it's more than 16% now.

In reply to Dave Williams:


Again, a good notaire is invaluable here.
Inheritance laws can seem a little crazy if you are used to English law.

Many houses stand empty in France because 8 different people automatically inherited a slice of the pie. Often they can't agree how to proceed, or one obstinate person just won't agree to a sale etc.

In reply to interdit:



I think this is not unique to France.

I've owned property in the past both in Spain and in South Africa, and in both cases I was advised to take out Spanish and South African Wills in addition to my English Will.

The biggest problem about owning property abroad is managing it and dealing with problems from a distance. In my experience local management agents are awful, and you invariably have to go out and sort things out on the spot. Things have a habit of going wrong at the most inconvenient times when it isn't always possible to drop everything and fly out, not to mention having to pay top whack air fares for on the spot flights

In reply to interdit:


Cheers, I figured that would be the case but wasn't 100% sure.

In reply to interdit:
The law changed last September regarding inheritance. If you are a British resident who owns a property in France you can leave it to whoever you like in your will now, and you don't need a separate French will.

In reply to ClimberEd:

We bought a house in Herault last year.

Notaire fees are approx. 8% of the sale price, and payable at the same time as completion - you will have to pay a deposit in advance of that though.

As others have said, you have two annual taxes to pay and they are worked out similar to uk council tax.

We're not concerned about the CGT issues as we intend to live here once I've retired. Inheritance rules can be avoided using a decent solicitor, but as someone has already said, the law is changing/has changed to allow foreigners to be more flexible.

Important stuff - use a broker to switch your GBP to Euros and keep a close eye on the exchange rate - from finding our house to paying for it we lost nearly £10k due the weakening pound.

I type this on our verandah watching the sun set close to the crag that is Caroux, drinking local wine and eating local cheese - living the dream, literally. Sadly I'm back to work in a week, so will have to start planning the next trip.

Go for it.

In reply to Martin Haworth:

That's good news for many holiday home owners - I'd not come across that as I'm a French resident and my will definitely falls under French law - Though most of the bad points have been addressed by selecting the best matrimonial regime (with the advice of our notaire).
It's changing all the time Martin, and that's why I suggest it's worth speaking to the professionals. Choose someone from personal recommendation and they are not as expensive as people seem to think. Notaires prices are fixed by the government!
An example of the law changing all the time is the EU stopping France from applying social charges, in addition to capital gains on property sales, for none French EU residents - The reason being that no person should be expected to contribute to more than one country's social system (which is independent of the tax system).

Edit:
Very strange. Someone has worked their way down this thread giving a single dislike on each post.
What's that all about? Someone got rodgered by the French tax system?

In reply to ClimberEd:



Don't let it stop you though - as long as you take good advice and don't walk in to it blind.

Quite frankly it's a pleasure to see your question pop up whilst many people are shying away due to thoughts of brexit