View from the Foothills of France

Some personal views on living, working,
bringing up family and making the dream happen in the most beautiful region of France. View from the Foothills of France also includes some personal and professional thoughts and tips on finding and buying the perfect property in the Ariège and Haute Garonne regions.

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The cost of buying French property falls 25%

By nadia, on 28th April 2015

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The property market in south west France is suddenly booming thanks to the perfect combination of favourable currency exchange rates, low house prices and very cheap mortgage rates. In particular, the strengthening of sterling against the euro means that French property is attracting huge interest from British buyers at all levels of the market and investors are also moving in.

It is currently almost 25 per cent cheaper to buy a property in France than it was a year ago. The reasons are threefold:

Firstly, according to the FNAIM (the national association of French estate agents), average house prices have fallen by 1-2% annually over the past few years.

Secondly, the pound has soared against the euro over the past twelve months. Figures from Currencies Direct show that the pound rose to €1.40 last week, up from €1.22 this time last year. This effectively means that a €250,000 property is around €24,000 cheaper than it was a year ago.

Thirdly, mortgage rates are cheaper than they have ever been; it is now possible to get a 20-year fix for 2.55% with even lower rates available for the very best borrowers. This is a sharp fall from 3.5% a year ago and means that someone buying today would save more than £45,000 in interest payments over the 20-year term of a €400,000 (£290,000) mortgage if they fixed at 2.55% compared with 3.5%.

All of which seem to have combined to produce the current burst of activity in the French property market; British buyers who have been waiting a long time to invest in France are clearly now taking the plunge.

This sudden buying boom and action by Europe’s central bank, which has embarked on a programme of “QE”, will push house prices up over the medium term, making now a good time to invest in property. House prices in France are predicted to rise by 15-20% over the next decade.

Please get in touch if you would like to be put in touch with a recommended mortgage advisor or currency advisor and be careful to check out the credentials of anyone you plan to trust with your money.

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Changes to French capital gains tax on second homes

By nadia, on 2nd April 2015

FROM GARDEN

Since January 2015 capital gains tax (CGT) on second homes in France has been reduced to 19% instead of 33.3% for all non European residents bringing it in line with the CGT for residents of European countries including French residents.

The way CGT is calculated in France is that the 19% ‘tax’ component decreases with time from the 6th year onward to a complete exemption after 22 years, while the 15.5% ‘social charges’ component decreases slowly from the 6th to the 21st year and more rapidly after, up to a total exemption after 30 years of ownership of your French house or flat.

In addition, the ‘social charges’ component of 15.5% is being  challenged and  the European court of Justice should reach a decision during 2015. If the court considers that non tax resident who own a property in France should not pay the 15.5%, the French state might have to refund the non-resident tax payers. It is, therefore, very important that you keep your tax role, wherever you live whether in a European country (except France) or a not.

There is no CGT if your home in France is your main home where you live permanently as long as you are a French tax resident. If you do not live in France and/or do not pay your main income tax in France you are a non resident and therefore you are liable to pay CGT when you sell your French home. If you are a tax resident of a European country, you may benefit from a CGT exemption on up to 150 000 € of capital gains under specific criteria. Please note that financial and tax laws in France are constantly changing so it is vital to take professional advice.

As ever, I would always recommend having a professional on your side when buying and selling property in France. If you would like to talk through your purchase in France, please get in touch; nadia@foothillsoffrance.com

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The French property hotspot of 2015

By nadia, on 19th March 2015

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As far as French property prices are concerned, the Ariège region, which has historically had a very stable (and incredibly good value) property market, is seeing a gradual rise in prices. Last year, the Ariège had one of the largest property price rises in France according to the association of Notaires in France. This is perhaps down to the fact that foreign buyers have started to discover this beautiful region and all it has to offer. Buyers daring to cast their nets that little bit wider have discovered what beautiful properties, fantastic opportunities and great value is still to be had in the Ariège. So much so, it is threatening to become the property hotspot for 2015. Property here is still very affordable, but that may not continue for much longer.

Top of the property wish list of those looking to buy in the Ariège are stone-built farmhouses which are still to be found for attractive prices. These properties usually have great views with the Pyrénées as a backdrop and are generally positioned to make the most of the summer sun and protect from the winter chill. Built from stone, they are usually spacious and come with outbuildings and a good amount of land.

For those wanting a project, it is also still possible to find plenty of houses needing renovation here which is becoming more difficult in other areas of France. In addition, many investors are looking to buy property large enough to run holiday accommodation – interestingly, the Ariège must be one of the last few remaining areas of France where there is actually a shortage of holiday letting accommodation, particularly close to St-Girons. Setting up a gîte or bed-and-breakfast with your new French property may prove to be a very sensible business decision and offer good returns on your investment.

For everyone interested in mountain sports, it is still possible to buy a wooden shepherd’s hut in the mountains, minutes away from the ski slopes and walking and biking trails and complete with stunning views. Agriculture has always played a crucial role in the economy of the Ariège and thus the valleys and hills are dotted with their characteristic stone barns with the typical ‘ardoise’ slate roofs. Nowadays, many of the barns have been converted into lovely, characterful homes or into luxury ski chalets but there are still a few unconverted barns available for sale although these properties are becoming more and more sought after. However, that dream of owning a chalet or mountain retreat is still achievable in the Ariège… at the moment.

Barn in snow

It seems that the secret of this undiscovered and very special region is out so if you don’t want to miss your chance, maybe now is the time to discover the beautiful Ariège. If you need some help finding your perfect house in an idyllic location, please get in touch: nadia@foothillsoffrance.com

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What to look for when viewing a house in France

By nadia, on 3rd March 2015

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Viewing your potential dream home for the first time is one of the most exciting aspects of house hunting. There are, however, a few things to bear in mind during and after a viewing to help you decide if it really is the house for you.

1.Location first
Most things about a property can be altered – apart from its position and the amount of natural light it enjoys. Consider these first. In which direction does it face? What does it look out on and how noisy is it? Turn the lights off to get a good idea how light the house actually is. Make notes as you go – you think you will remember but you won’t.

2. Be nosey
Be aware that you will likely be seeing the property in its most attractive state. Assess the shell of the home – not the lifestyle or taste of the current occupant. Don’t be afraid and open doors and cupboards, check the water pressure in the shower and so on.

3. Overall look
Is the house clean and obviously looked after? If so, it is likely that it has also been well-maintained and hence there is less likelihood of any nasty surprises later on.

4. Irregular rooms
Watch out for irregularly shaped rooms and think about how you’d use each space. Is there enough space for all your belongings and will there still be enough space in a year or three’s time?

5. Manners
Don’t pretend to be interested if you’re not. Be polite but no need to be over friendly. You might end up in a heated negotiation and it won’t help if you’ve upset them at the start.

6. Communicate with your property finder or agent
Always tell your property finder the truth about what you thought about a property. Property finders need feedback in order to develop a more detailed picture of what you are looking for.

7. If you’re genuinely interested, start asking questions
Have any alterations been made? What fixtures and fittings are included? How long have the owners lived there? How long has it been on the market? Have there been any offers? The more information you have, the more confident you will be.

8. Do a second viewing
Second viewings are vital as this is when you really start to see the house as it really is and yourself living there. Ideally the second viewing should be at a different time of day from your original visit. In summer, when it is unlikely you will ever see a property after dark it can be an idea to make your second viewing as late into the evening as possible. It is not just light levels that alter with the time of day, so do traffic levels and neighbour noise levels.

Of course, when buying a house, you have to have the right feeling about it and I see time and again how a property can tick every box on the wish-list and yet just not ‘feel’ right when the buyer views. This is the advantage of using a property finder who will have already pointed out all the pros and cons of each property and make sure it ticks all the boxes so that, armed with all the relevant information, you can at least feel confident in letting your feelings take over when you view.

 

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