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Everything you always wanted to know about France |
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Our business is our advertising sites for property and rentals at
http://rentalsfrance.com/ RentalsFrance http://francevoila.com/ France voila Please make use of these sites for rentals and sales (and please look at the adverts, they keep this newsletter going). ======= I have had a big reaction to the idea of tours of the Cathar, Templar and "Holy Grail" sites in Languedoc. I am putting together some ideas for a few special tours later this year and also talking to other organisations in Paris for a "Da Vinci Code" tour. These could run together. Please write to me if you are interested, I am thinking of five days of air conditioned luxury, good food, wine and conversation for a small group. mailto:tony@frepro.com tony@frepro.com ======= In this letter 1. Are Second Home Prices Falling 2. To Dream The Impossible Dream 3. Pool the Other One 4. Apartment Blockage 5. False Alarm 6. Oz You Like It 7. Leaseback Penalties 8. Has Anyone Sold a Leaseback at a Profit ===== 1. Are Second Home Prices Falling I was sent this piece from a reader. ...While you're sitting on the balcony sipping your cocktails, buying a place in the sun seems like a foolproof investment. But when the sun goes down, you could be in trouble. It is either that, or the august members of the Royal Institution of Chartered Surveyors are just jealous of your swimming pool. They have put out a warning over second homes, saying that prices for homes and flats in Mediterranean countries are at their peak, and vulnerable to a drop in value. Blame Michael Ball for puncturing your dreams of getting a massive profit for merely hanging around by the beach all summer and filling your new abode with a few tasteful, French antiques. I'm not talking about the syrupy singer of Love Changes Everything but the rather drier-sounding Professor of Economics at Reading University. He wrote the RICS report and has a number of reasons to explain why you might be better off without that holiday home. Firstly, he says, property prices in France and Spain have risen 15 per cent in the last year - and in some popular coastal areas, it has been much higher. That is probably not sustainable in the short term. Then there's the fact that countries like ours - and apparently the Brits are some of the most eager buyers of second homes abroad - have seen their own economies become less buoyant. When times are tough, Prof Ball points out, we're likely to sell our second homes because they are strictly non-essential. We're also likely to accept lower valuations on our holiday homes because we need the cash quickly - meaning that the immediate future looks far from rosy. Prof Ball points out that another reason why the short-term market for second homes could be weak is the relaxation of planning permission in many traditional "holiday home" areas. Apparently, some 380,000 homes were built in Spanish coastal areas last year - which is more than in Germany and the Benelux countries combined in the same period of time. So, given the housebuilding statistics, here is my foolproof suggestion for making a mint on your second home: buy a house in Belgium. Just doesn't hold quite the same allure though, does it, watching the sun set over all those chocolate factories?... If this is a copy from a publication, please let me know and I will give accreditation ======= 2. To Dream The Impossible Dream Tony, We bought our holiday home in the Herault a year ago and love the area, in the last couple of months a wind farm has appeared in the distant hills, whilst this in itself does not concern us we are wondering if many more are planned for the area. Is there a map of the Languedoc showing where the planned sites are to be. Your newsletter is full of very useful information, thank you. Pauline === Hello Pauline There is no way you can find out anything like this in advance due to the secrecy laws in France. I am told on good authority that there are "plans" for 16,000 (yes sixteen thousand) of these inefficient, environmentally disastrous monstrosities in the department of Herault alone. While local farmers and the local mayors and communities can make a nice little earner from these ghastly and stupid things thousands will be erected all over the place in any corner where a puff of wind may turn the lunatic devices. They cost more energy (oil) to make, erect, maintain and eventually demolish than they can ever produce, but the European grants show yet again how good the French are at getting a big slice of the EEC cake Tony ======= 3. Pool the Other One Tony We too have a kit above ground pool, but have sunk it into the (sloping) ground a bit further. At what point does it cease to be an above ground pool and become a submerged one?! We dont rent the property or entertain paying guests, but we dont want to fall foul of the law as it is (with the rather excessively high fines!) Just wondering what we should do, as we do not want to enclose the pool if we can help it. To be honest, I'm not sure how much time the 'Pool police' will spend travelling around the country looking for people to prosecute, but its a risk Im not sure I want to take. Best regards. Mike === Hello Mike If it is a temporary structure then it is exempt and you will also not have to pay additional tax on your home. How do you define temporary? In my opinion if you can dismantle it and then put it back together again without damage, then it is temporary. My feedback from friends in the Gendarmarie are that they are still not fully informed on these pool laws and they expect to do very little until January next year when every pool in France will have to comply - then they will enforce this very efficiently. The Gendarmes are part of the French army, it sounds a bit daft to have the army checking on pool laws, but then they do a fiercely efficient job of speeding fines so all owners should be aware of their interest. Tony ======= 4. Apartment Blockage Hi Tony, A partner and I are looking at buying an apartment block in Cannes, with 4 apartments. There is one tenant, aged 104. Is it possible that her family has any rights on the apartment when she passes away or will we have free access. My partner is very impatient and wants to buy, but I would prefer to know. The notaire was very vague. Regards and congratulations on your newsletter. It makes my day when I receive it. Eddy === Hi Eddy Inheritance laws in France are very strong and impossible to be set aside. Children cannot be disinherited. If the tenant has children or surviving Grandchildren then they have rights which cannot be altered. Other relatives also have some leverage. If the Notaire is being "vague" then this is a bad sign - but they never ever make a definitive statement if they can possibly avoid it and they are notorious for giving wrong advice when they do. If there are relatives, and if the apartment has a value - then for sure there is a potential problem - these things can drag on for years. Personally I would not value the apartment at more than the rented value paid by the tenant, the other three I assume are vacant and the value can be determined - but it sounds a can of worms best wishes Tony ======= 5. False Alarm Tony, as usual your missives are helpful and pertinent. I have heard by word of mouth through a pool supplier that there may be a problem with the Aquasensor range of pool alarms which were advertised as conforming to the new code for pool safety. In fact last year they were difficult to source as being about the only device of that nature supposedly approved. Two things then may be of interest to your readers and hopefully some of them may also know the answers- 1. Do they conform 2. If not, who is likely to be held liable for stating that it did conform and how do you go about either getting the situation rectified - is it down to the suppliers or do you have to go through a judicial route against the company? Hope this assists as well as raises some Q's Robert === Hello Robert We have heard that out of 22 previously "approved" alarm systems - 20 are now having their approval withdrawn - there are too many problems with rain and falling leaves (sounds like British Rail). I have heard good reports of underwater "sonar" alarms being the only reliable system, but in my opinion any alarm is only a secondary defence and all pools should have an approved fence and gating system installed as the main method of protection. If the system is not approved then you face a fine of 42,000 euro. If there is an accident you will not be insured and risk losing a lot more. I hate to think of the legal implications in France - taking action is a very long and tricky operation with, in our experience, zero chance of satisfaction, or ever being told the eventual outcome due to "secrecy" laws here. Bonne Chance Tony ======= 6. Oz You Like It Hi, Do you have any information on Australians coming to live and work in France? Pamela === Hi Pamela Getting work in France is very difficult - because there isn't any - you can write to an Australian couple who have succeeded with a BandB near here http://www.chezroo.com ChezRoo Hope this helps Tony ======= 7. Leaseback Penalties Hi We are interested in the french leaseback system and would like to purchase a holiday apartment off-plan. We understand the minimum leaseback period is 9 years. Would it be possible to break the lease before the end of the 9 year term and what penalties would be charged? Many thanks for your help, we look forward to hearing from you soon. Regards Angie === Hi Angie You will have a commercial lease with the appointed management company. They will not reduce this and you will usually find that there are penalties if you do not renew the lease. You should only buy on the basis that you are making an investment and never will have full use of the property no matter what you are told. The commissions on these sales are very large and agent will lie and conceal the truth to get a sale. If the management company agrees not to renew the lease, you may have to pay back elements of the VAT and pay compensation or other losses to the management company. Never think a leaseback deal will give you a low cost freehold property, it is not designed for this, the aim is to give French tax payers an incentive to invest in needed property, for tourism and low cost housing for example. If you are not liable for French taxes, there is no real advantage in this scheme. Tony ======= 8. Has Anyone Sold a Leaseback at a Profit Hi Tony, We purchased a leaseback in central Nice (studio apartment) strictly as an investment. It comes with a guaranteed rental and a nine year lease. Reading your newsletter I was a little alarmed to see that you had yet to see a resale of a leaseback at a profit. It was my intention of selling after the nine year period, I am prepared for my resale market to be a little limited (even if it does say in my contract that I can sell to anyone as a freehold property). looking at other sites there seems to be many people who have sold at a profit. Interested to know your thoughts Thanks Richard === Hi Richard It is a freehold property, but you have given a lease to a commercial management company and they have many rights, possibly including compensation if you do not renew the lease. After 9 years the property must remain in the same classification, Residence Tourisme for example, and for this to apply it must be used for that purpose. The VAT repayment is conditional on this as are the tax concessions etc. if owners band together to have the classification changed, then tax concessions must be repaid and the management company may be able to demand compensation for loss of profits After 3 years of research on this I am still waiting to hear directly from anyone who has successfully either been able to use the property unencumbered for their own use, or have sold at a profit. I take what most agents and websites say and promise with a huge pinch of salt. However I am getting mail from leaseback owners trying to sell and who are offering their properties at a knockdown price. I am not against leasebacks, they can be a secure investment, but that is all they are and the returns are low with much lower capital gains then the same money invested in unencumbered property - all investment property in France needs to be kept for a minimum of 16 to 22 years to get the benefits of reduced taxation and VAT repayments. If anyone can tell me they have personally sold a leaseback for a capital gain I would like to hear please with details. Tony ======= I really do try to reply to all mail, most are questions about property or living in France. I publish comments in this newsletter which I believe are of interest and may help find answers to questions put by others wanting to come to France. By linking the points I make to our weblog at http://www.fblog.com Fblog I hope readers will click on the adverts which help support our overheads. |
