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    HomeMoneyLatest Money StoriesNow it's easier to purchase a second home in France whatever your budget

    Now it’s easier to purchase a second home in France whatever your budget

    That dream of shopping for a French chateau could turn out to be closer to a reality this 12 months due to a brand new change in immigration rules. The French parliament has voted through laws that may enable British second homeowners to spend at the very least six months of the 12 months in France without requiring a visa.

    It is a climbdown post-Brexit rules which meant the one way you possibly can legally stay in France for 90 out of 180 days was to get a long-stay visa – a process that was often complicated and price applicants at the very least £85 a time.

    The change is predicted to be rubber-stamped by the French constitutional council this spring. It could herald renewed interest amongst British buyers seeking to spend time abroad.

    Joanna Leggett, marketing director of French estate agent Leggett Immobilier International, says: ‘The rule change is already making a wave of interest from second home bargain hunters in a market where there are a number of great value opportunities. Those beginning to look now may profit from the brand new laws by the point of purchase.’

    Leggett adds: ‘The romance of shopping for a chateau is large – with interest soaring eight-fold following the success of TV shows akin to Channel 4’s Escape To The Chateau. It’s a very appealing option for those in search of a second home they may live in a number of months of the 12 months – and rent out at other times. But while your heart mustn’t rule the top, there remains to be a number of wonderful selection.’

    All change: That dream of shopping for a French chateau could turn out to be closer to a reality this 12 months due to a brand new change in immigration rules

    The appeal is apparent. For the common house price in Britain of £290,000 you may buy a modest castle in France, albeit in need of labor. But should you stretch the budget, you add to the turrets and moat with a vineyard.

    You may snap up a fifteenth Century medieval castle overlooking the Pyrenees for £316,000; an imposing nineteenth Century ten-bedroom chateau within the Loire Valley for £450,000; or push out the boat with a £1.5 million modernised 18th Century chateau in South-West France with elegant gardens and a one-hectare vineyard.

    Another is to purchase an apartment in a chateau, akin to a £150,000, two-bedroom luxury bolthole within the South West, with shared pool and tennis courts.

    Jack Harris, of international estate agent Knight Frank, says: ‘There are mind-blowing opportunities for chateau hunters within the South West particularly.

    ‘The region’s international airport at Toulouse and major improvements to the rail service and web connections only add to the appeal. Whether it’s a labour of affection where you stamp your individual designs on a chateau in need of renovation – or you only have the desire to make cosmetic changes – there is no such thing as a shortage of options available on the market.’

    Shopping is made easy due to web sites akin to French-Property.com, Frenchestateagents.com, Knightfrank.co.uk and My-French-House.com, which allow you to explore a whole bunch of chateaux to suit budgets from £100,000 to £1 million or more. Leggett says: ‘During lockdown we saw an upsurge of individuals buying property unseen – but my advice is you should visit to get a feel for the place. Buyers often say they need a rural retreat but still need a boulangerie and a bar, ideally in walking distance, plus a close-by town. Airport and train connections are also essential considerations.’

    Nevertheless, before you get carried away, be sure you crunch the numbers as there are more likely to be considerable ongoing costs when you own the property. ‘Doer-uppers’ can soon turn out to be a money pit if there’s poor plumbing, no central heating and the home needs rewiring and structural work.

    The French government also has energy rate restrictions on renting out homes – which could have an effect should you buy a draughty castle. Currently, properties must meet a minimum energy rating of G, but this might be tightened to a level F initially of next 12 months. There are also taxes you will have to pay. Yearly there’s a ‘taxe d’habitation’ for second homeowners averaging €772 (£664) for a house and €941 (£808) for an apartment.

    But the full cost may be way more with local councils in a position to add hefty surcharges – of anything from 5 to 60 per cent. A complete of three,399 councils are permitted to use a surcharge and there could possibly be more to return. Do your research to search out out what it will cost you.

    Adding to the burden is a ‘taxe fonciere’ ownership tax – paid whether you reside within the property, it’s unoccupied or rented out. It is predicated on the rental value of a property and typically may add as much as 17 per cent of this sum a 12 months.

    There may be also a ‘taxe d’enlevement des ordures menageres’ (TEOM) rubbish collection tax, which usually works out at €124 (£107) a 12 months per person.

    Buying the property may even involve navigating red tape and various expenses.

    Tres jolie: Home with pool in Duras, near Bordeaux, is £219,000

    Tres jolie: Home with pool in Duras, near Bordeaux, is £219,000

    You should normally employ a neighborhood ‘notaire’ – notary. They cut out the necessity for each a buyer and seller solicitor, as in Britain, and as locals they need to understand property paperwork and tackle issues, akin to conveyancing and land ownerships, in addition to any potential language barrier.

    Notary fees are taken from a ‘frais de notaire’ charge – often between 7 and 10 per cent of the acquisition price. This includes taxes, conveyancing fees and stamp duty.

    There may be also an ‘honoraires’ estate agent fee of typically 5 to 10 per cent of the sale price that have to be paid. This is commonly included throughout the purchase price. Leggett says: ‘Traditionally, the honoraires fee was at all times paid by the customer – but you should check as nowadays sometimes the vendor foots this bill.’ If you might want to take out a mortgage to purchase the property in France you will have a French slightly than a British lender. This requires you to borrow money in euros – so you might be exposed to changes within the exchange rate.

    Magnifique: This chateau in Poitou-Charentes is for sale at £850,000

    Magnifique: This chateau in Poitou-Charentes is on the market at £850,000

    You’ll typically be offered a longer-term fixed term deal of ten years or greater than you get in Britain – however the rates are comparable. You’ll typically pay around 4 per cent for a 15-year loan on an 80 per cent loan to value.

    Once you may have undergone all these loopholes you would possibly consider renting out all or a part of your dream chateau to assist pay a few of those bills. Probably the most popular ways is as a furnished holiday let. With a lot selection available on the market you might want to stand out to draw customers – so a chateau helps.

    Double taxation relief means you don’t pay tax on income in France in addition to Britain. Rental is taxed at 20 per cent in France as much as €27,519 (£23,764) a 12 months – and at 30 per cent on amounts above this level. But it’s also possible to use costs, akin to upkeep, to offset the ultimate bill. You might be advised to pay an accountant to assist navigate the strategy of filling in tax returns in France and ensuring you don’t double-pay for receiving income in Britain.

    Web sites akin to Gites de France and Airbnb can provide an idea of costs charged – and a spot to advertise your castle. Gites takes a ten per cent cut of any bookings – or 4.5 per cent should you are willing to pay €109 every year. Airbnb has a ‘host-only fee’ of 14 to 16 per cent.

    You may also consider paying an agent a property management fee of 5 to 10 per cent of the rental income – who can take care of the property and keys when you’re not there. Cleansing is extra at typically €15 an hour.

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