Question:  If a concern of mine is to keep overheads ie. taxes etc as low as possible, what should I be seeking - are there any guides as to how high taxes are etc? Merci Chris.

Answer: There are two basic local property taxes in France which are, sort of, the equivalent to the UK council tax; only much cheaper of course, they are called Taxe foncière and Taxe d’Habitation. So when looking for a property to buy in France you can look at certain properties that will have low taxes compared to others that will have higher taxes.

Cle France can always confirm the taxes in advance of you committing to buy a property as of course these are 2 ‘overheads’ that cannot really be avoided and need to be paid on time to avoid fines and headaches.

Both taxes are subject to size and location so to keep these taxes down to a minimum keep the house habitable space small and the garden small as the larger the house and larger the plot size will only increase each tax. Land is more expensive in a city than in a town or a village and cheapest in the countryside so a rural location will have the lowest taxes. However some “Village Fleurie” will have high taxes if only to pay for all the flowers they display, floral villages look nice but can have high taxes for the residents and some regions are less expensive than others, keep to rural areas and avoid the South of France to keep these taxes in check.

Tax Habitation is based, in part, on the size of the property so the more ‘habitable space’ a house has the higher the Habitaion tax as it is calculated “per / m2” so one thing to consider is if you are planning to extend or renovate a property then as you increase the habitable space then you will of course increase the habitation tax.

The other and more influential aspect of this tax is it is actually linked to your income, if you live full time at the property. If you are not living full time at the property i.e. It is a holiday home then you still pay a Tax Habitation but it is basic and not linked to your earnings.

Only if the property is derelict or a complete renovation project will it be exempt from this tax and the local Mairie will be on the lookout for developments on the property especially if you have submitted and planning application so he can apply the tax to the “m2 SHON” of your finished project.

Tax Fonciere is based on the size of the plot and where the plot is of course i.e. The value of the land per / m2. So the more land you have the higher the tax and if you have a very small garden the the tax will be lower, it includes the land the house is built on so even if you have no outside space you will still be liable to a small Tax Fonciere bill.

Some time ago we published a good article that goes into more detail and explains the 2 main taxes involved with owning a property in France, Taxe Habitation and Tax Fonciere, click here or the image below to read this article in full.

For everything you need to know about French property visit www.clefrance.co.uk

Question: I have several questions around 'Brexit' and it seems that the vast majority of people are saying nothing has chengd yet and very little will change, call me 'old-fashioned' but I would like to talk to someone face-to-face about my thoughts and plans as when I move to France I want to start a business, any thoughts? Richard W.

Answer: We will call you to answer your questions but it may be that others feel the way you do Richard and we have a suggestion to appease your face-to-face desire for information.

A Place in the Sun Live exhibition is coming later this year at the NEC Birmingham 23rd - 25th September and the SECC Glasgow 29th - 30th October. As usual these will attract a serious audience of motivated buyers, potentially even more motivated given the UK remains a fully paid-up member of the EU for a good two years to come.

A Place in the Sun Live are planning specialist 'Brexit' sessions at both events.

Cle France are one of A Place in the Sun's biggest partners and here we have some very good comment from them below...

The Facts About Brexit for EU Property

The referendum made last week quite an historic week. Since then nothing has changed but understandably people who own property in the EU or are planning to buy have questions about the possible impact of the result on their lifestyle.

This is what we know so far.

Nothing changes for two years from when the UK informs the EU we plan to leave for which there is currently no fixed date, nor can the EU force the British government to trigger this notice. During this period we remain a fully paid-up member of the EU with all our rights and privileges intact.

If you are currently resident in another EU country or plan to become so in the next two years, when the UK does leave it is highly likely you will retain the rights you have acquired to reside in that country. While the host country is under no obligation to provide services such as healthcare, it is again likely the UK will reach an agreement with other EU countries for a reciprocal arrangement as it would be in the interests of the EU to look after their citizens given the 3 million EU nationals in the UK and only 1.3 million Brits living across Europe.

British buyers make up a significant portion of the property market in many countries – in Spain they account for one in five of all overseas buyers – and several countries are desperate to attract Brits to buy property and help boost local economies. Many towns in regional France are reliant upon British owners bringing their pensions to spend in local businesses.

Currency Rate Fluctuations

If you are currently planning to buy a holiday home in the EU then you are likely to be keeping a close eye on the exchange rate. Currently at 1.2 Euros to the pound, Sterling has not collapsed and still makes overseas property in most areas very good value. If your view is this rate may worsen then you can speak to a specialist currency broker and forward fix the rate you get.  

What this means is you agree a rate now for a transaction further down the line, protecting you from any drop in the value of Sterling (this mechanism also means you don’t benefit if Sterling improves).  

So if you need to buy or sell sterling and would like to be kept up to date with all the latest data releases and exchange rate movements then feel free to contact myself Ben Amrany. If you are buying or selling a house in France we will make sure your monies are in the right place at the right time, we work hand in hand with you and Cle France.

For more information on the currency service I can provide please feel free to contact myself...

Ben Amrany from FC Exchange follow this link or phone and ask for myself and quote "Cle France" on 020 7989 0000.

You may contact me directly using this form (click here) with your requirement and I will explain the options that are available to you in getting the best exchange rate.

Living in France Post-Brexit

Planning to live in the EU on a UK pension post-Brexit will mean regular payments from the UK are open to currency fluctuations if you do not choose to forward fix the rate at which you buy. A British pension would not attract any inflation-increase as it would if we had remained in the EU, representing a marginal loss.

Post Brexit it would be possible for a country to impose additional or higher taxes on British owners, for example on a house sale, because the basic right for a Brit on the Algarve to enjoy the same tax treatment as a Portuguese national will have been lost (though in the case of Portugal anyone spending half the year there can join the non-habitual residency scheme and enjoysignificant tax breaks). What is unlikely is that an EU country would impose anything overly-draconian that would deter British buyers.

Brits ability to own property in the EU and around the world remains unchanged

We believe the appetite for Brits to own property in the EU and around the world remains unchanged, it could get more expensive and slightly more complicated than had we stayed in the EU but there are no restrictions on non-EU nationals Brad and Angelina buying in Mallorca and there will be no restrictions on you.

A Place in the Sun Live autumn exhibitions at the NEC Birmingham 23rd -25th September and the SECC Glasgow 29th – 30th October will include specialist sessions on Brexit and property with experts on hand to address your individual questions.

For everything you need to know about French property visit www.clefrance.co.uk

Question: Will I still be able to buy a property in France? Simon D.

Answer: This is probably the most posed question we have been receiving and to answer it, there was a really good article published in 'Living France Magazine' so here it is below...

How will Brexit change property ownership, the buying process, tax and inheritance rules and the pound-euro exchange rate for British buyers of French property?

Nothing has changed really.

Since Britain’s vote to leave the EU on 23rd June there has been much speculation and concern about what this could mean for those Brits who want to buy a property in the EU. The first thing to say is that once Britain triggers Article 50 there is a period of two years in which to negotiate withdrawal from the EU and agreements with the EU countries.

During those two years Britain remains part of the EU and so in the short term nothing is going to change.

Will I still be able to buy a property in France?

Yes! UK citizens are likely to remain free to buy and own property within the EU – after all non-EU citizens, including Americans, Australians and Canadians, are currently able to buy property in the EU so there is no reason why the same rules won’t apply to Brits.

There may be more hoops to jump through and a few more forms to fill out but Brits are a big market for French property and it is unlikely France will want to cut off this market by making it much more complicated for British people to buy property in France. The only difference might by that Brits would have to apply for residency visas in order to live in France for a certain length of time.

Will the buying process change?

Unlikely.

A British person buying a property in France has to follow the same process and procedures as the French and as non-EU residents and so it is unlikely that the actual process of buying will change. If it does then it would change for everyone so being inside or outside the EU shouldn’t have an effect.

The one area that might be of concern is that once out of the EU, UK citizens might find it more difficult to get a mortgage in France. This is because European banks consider non-EU citizens to be a higher risk than EU citizens so you might find you can borrow less and will have to have a higher deposit.

For the vast majority of people looking for property in France, and especially non-resident buyers, it is much quicker and much more effective to use the services of a experienced and qualified Independent Mortgage Broker.

An Independent Mortgage Broker will look at your specific circumstances then look through a selection of lenders to find you the best possible Mortgage product for your specific requirements, it is so obvious when you think about it!

Contact our Mortgage Brokers for a no obligation quote here.

Will inheritance rules change once Brits are non-EU citizens?

No. Prior to 17 August 2015, the inheritance rules applying to French estates owned by both EU and non-EU citizens were those determined by French law. However, since then, in the absence of any provision in a will, it is the law of the country of the deceased’s habitual residence that applies or the law of their nationality.

Therefore, even post-Brexit, a British owner of property in France can apply the law of their nationality to their French estate. If they are resident in the UK, English law will automatically be applied unless they stipulate in a will that they want a different country’s law to apply. If they are habitually resident in France, they will have to make it clear in a will that they want English law to apply, otherwise French law would be applied as it is the law of the deceased’s habitual residence.

Will I have to pay more property taxes?

France and the UK have a double tax treaty which is separate from any EU regulations and so this shouldn’t be affected by a Brexit. This covers income tax and capital gains tax so there should be no increase in these as a result of Britain’s exit from the EU. Other taxes which should not be affected by Brexit include inheritance tax, local property taxes and stamp duty on property purchases.

Will the drop in the pound mean I can’t afford a French property?

The most immediate consequence of Britain’s vote to leave the EU was that the value of sterling dropped to a 30-year low against the US dollar and the GBP/EUR exchange rate dropped from a previous high of 1.31 to a low of 1.20 before stabilising slightly at 1.24. For property buyers this means you can afford much less in France than you could have the day before the referendum.

Exchange rates have always been a worry for British buyers of French property and they are constantly moving making it difficult to decide on your budget because one day £100,000 will buy you a house worth €131,000 while the next day it will only buy you €120,000. This can work to your advantage as well – Brits have been enjoying very favourable exchange rates recently allowing them to get considerably more euros for their pounds.

In times of uncertainty it is difficult to predict what exchange rates will do and therefore difficult to plan for your property purchase. Some property buyers will hold off buying until the exchange rate improves while others will downsize their ambitions. On the whole, property in France is still much cheaper than the UK and so you can still afford a good-sized property. The other option is to fix your exchange rate using a forward contract to guard against any future exchange rate fluctuations.

So if you need to buy or sell sterling and would like to be kept up to date with all the latest data releases and exchange rate movements then feel free to contact myself Ben Amrany. If you are buying or selling a house in France we will make sure your monies are in the right place at the right time, we work hand in hand with you and Cle France.

For more information on the currency service I can provide please feel free to contact myself...

Ben Amrany from FC Exchange follow this link or phone and ask for myself and quote "Cle France" on 020 7989 0000.

You may contact me directly using this form (click here) with your requirement and I will explain the options that are available to you in getting the best exchange rate.

For everything you need to know about French property visit www.clefrance.co.uk

Question: Are British people still allowed to buy property in France and live there full time? Colin.

Answer: Yes, indeed, we sell to British buyers every day of the week, and that has continued into this week of course!

The process of 'BREXIT' will potentially take a number of years to negotiate, and in the meantime nothing changes, British people are still moving to France to live.

So the consensus of opinion is that for now not much will change. The process of withdrawing from the EU will not be a speedy one, and the residency of those ex-pats living in France and elsewhere in the EU will no doubt form a part of that negotiation process.  

And of course we have a large number of French nationals who live and work in London (it is France’s 6th biggest city in terms of the French population).  

So there are people living on both sides of the channel whose lives will need to be accommodated. When I moved to France a residency permit known as the ‘Carte De Sejour’ was required; it was a relatively straightforward application process (or at least as straightforward as a French bureaucratic process can be!)  Perhaps this could be re-introduced for British residents in the future.

Clearly there are remain many questions to be answered, and fine details to be ironed out. But what is becoming apparent is that this will be a long process, possibly years in the making, and we will of course bring further news as and when it becomes available during the coming months.

But in the meantime life continues much as it always has done: the British have always lived, worked and retired to sunnier climes, and that will doubtless continue, even if some administrative aspects of live abroad may change.

I hope that helps reassure you somewhat.

Have you got a question?

If so I will answer it....

Simply click on the image below that takes you to the "Ask Alex" page, fill out the form and I will get back to you very soon.

For everything you need to know about French property visit www.clefrance.co.uk

Question: Hi Alex, I have two apartments in Villefranche-sur-Mer, my question is, after owning them for 22 years are they both exempt from the capital gains tax in France or just one of them?

Thanks, Paul.

Answer: As I know you'll appreciate I am not an international taxation specialist, and so the advice I can give on this point will be of a general nature rather than specific to your personal circumstances.

In France CGT is paid on the sale of second homes, not on the sale of one's principal residence. So if you live full time in one of your apartments, and have done tax returns on earnings in France, then that is regarded as your principal residence and CGT is not applicable. However, if this is not the case and they are both second homes, then CGT is payable.

If you have been permanently resident in France and you are selling your principal home then any capital gain is fully exempt from capital gains tax and social charges.

In order to qualify the property must have been occupied by you on a habitual basis, although you need not actually be occupying it at the time of sale. However, if you leave the property before it is sold, you will only be entitled to claim main residence exemption if the property is sold within 12 months after you have ceased to use the property as your main home. In addition, you are not permitted to let out the property during the intervening period, or to leave other family members in occupation.

If you are selling an investment property, which does not qualify for the main residence exemption, you will benefit from progressive taper relief dependent on how long you have owned the property.

There are separate scales applying to calculate the gain subject to tax and the gain subject to social charges:

• the gain subject to tax is reduced by 6% for each year of ownership after the 5th year up to the 21st year. A reduction of 4% applies in the 22nd year, giving 100% relief after 22 years,so on the face of it it looks like you may well benefit from this exemption.

• the gain subject to social charges is reduced by 1.65% for each year of ownership after the 5th year up to the 21st year. A reduction of 1.60% applies in the 22nd year, followed by a reduction of 9% each year from the 23rd to the 30th year. This provides for 100% relief after 30 years, so it may be that there is a social charge element for you to pay.

As always I would advice taking tax advice specific to your circumstances, and of course these rules do change in France quite regularly, so it takes a tax professional to be fully up to date with the very latest developments.

I hope that has at least been of some assistance.

Have you got a question?

If so I will answer it....

Simply click on the image below that takes you to the "Ask Alex" page, fill out the form and I will get back to you very soon.

For everything you need to know about French property visit www.clefrance.co.uk