New tax for 2nd homes

A new Tax on second homes is planned for 2nd homes owned by foreigners in France.

From 1st January 2012, non-residents who own a second home in France will be charged an annual tax of 20% of the cadastral value of the property. Clarification is being sought of what comprises the cadastral value, but it is roughly equivalent to the Taxe Habitation.

We are trying to establish whether there are any exemptions, and understand that expatriates overseas for professional reasons will not be affected.

One client got in touch this week about the new tax to find out how it would impact upon their purchase. Having explained that a typical Habitation Taxe bill is perhaps 400 Euros, the sum of 20% of that, i.e. 80 €, is hardly going to be a deal-breaker, although it would be better of in your pocket !

It will be interesting to see if anyone challenges the legality of raising a tax solely on foreigners .... so watch this space.

French Tax Reforms 2011

The Finance Bill covering the latest tax reforms in France was presented to the Council of Ministers on Wednesday 11th May 2011.

Amongst the measures proposed is a new tax on second homes owned by foreigners :

From 1st January 2012, non-residents who own a second home in France will be charged an annual tax of 20% of the cadastral value of the property. This is like a second Taxe Foncière.
Expatriates overseas for professional reasons will not be affected.

Some good news - Wealth Tax

Abolition of the Bouclier Fiscal, except for people on very low incomes whose Taxe Foncière on their main home exceeds 50% of their income. The threshold is increased to €1.3m. Wealth between €1.3m to €3m taxed at 0.25%. Over €3m taxed at 0.5%.

The declaration of wealth tax is usually due by mid June, but the deadline is being extended to end of September.

Has the £ turned the corner ?

The Euro has seemingly, at last, taken a long overdue fall after surging 9 cents against the pound this year. The newswires are supposedly full of stories of the Greek situation. Further bail-outs, interest rate reductions, debt restructuring and even a full scale Greek exit from the Eurozone are the possibilities to consider this week. The net result is the downtrend in £ / € has stopped, and is perhaps now in reverse, although we are in a volatile market, but the £ has moved higher so far reaching €1.14 from €1.10 last week. There have been previous crisis moments, with Greece, Ireland and Portugal, but the € has to date managed to overcome the crisis thanks to bail-outs & increased stability funds. So, it pays to be cautious in betting against the Euro. Unfortunately, as ever Mervyn King is talking the £ down at every opportunity, so upward moves in the pound are limited in nature. So what does this mean for you ?

EUR Buyers

Orders are recommended between €1.14 and €1.15. Big resistance (a ceiling) comes in at €1.15 and €1.16. A fall back to €1.12 levels would concern us and possibly signal a resumption of the downtrend to €1.09/€1.10.

EUR Sellers

The best levels in over a year have provided a fantastic window of opportunity for Euro sellers. £ / € can turn quickly and reverse moves in a matter of days. This happened previously around New Year 2010 when the rate went from €1.15 to €1.19 and back to €1.15 in roughly 3 weeks. This was also evident lately in the move from €1.14 to €1.10 to €1.14 in 2 weeks. A stop loss order above €1.15 would guard against a move which could go another 4 cents higher. As ever, we recommend that you speak to our dedicated currency dealers for the best information. Please contact me initially by e-mail sales@allez-francais.com

House prices - observations

Figures have recently been released by the FNAIM, (French Estate Agency body), and it makes interesting reading as there are quite noticeable variations throughout France.

I have chosen to focus on the 2 areas that our business deals with, namely the Poitou Charentes and also the Dordogne Valley.

Over the year to 31/3/2011 prices fell in the Poitou Charentes by around 1.3%, but the fact that the market is falling there is highlighted by the Q1 figure for 2011 which comes in at minus 2.6%.

Further south, in the Dordogne valley the picture is much more positive - with the year to 31/3/2011 showing +2.2% in the Limousin, +3.9% in the Midi Pyrennees, with the Aquitaine returning a negative 0.8%. (However the Aquitaine is showing +3.1% for Q1 for 2011).

The recent fall in the £ against the Euro means that some ex-Pat vendors looking to return to the UK are flexible on price, so the indications are that the market has bottomed and this should be a great time to be buying French Property.

For all of our properties please visit http://www.allez-francais.com/

Win a stunning riverside property - competition

2 houses, 3 kitchens, 3 moorings, 3 acres, 4 reception rooms, 6 bedrooms, 6 bathrooms, planning in principle for 3 more properties... the list goes on. It could be your's for just £25 !

Some previous clients of Allez-Français have decided to launch a competition rather than sell their lovely property using a traditional agency.

The property is set on the banks of the Charente river near the town of Cognac, SW France. Built in the 1840s by Hennessey, makers of world famous Cognac, it was used for over 150 years to store its produce. Horse-drawn barges would transport barrels to and from the property with those of exceptional quality remaining over 50 years whilst their contents matured and developed further.

If you are wondering what some of your options might be; the property offers a multitude of exciting opportunities and subject to planning permission where necessary, here are some suggestions:

1. If your dream is to move to a warmer climate, be mortgage free and live in a lovely location, then this could be just the place for you, your immediate family and even your extended family.

2. It was recently registered for self-catering holiday accommodation and B&B and though it is not necessary for you to do this, if you did wish to generate income this way, registration is a simple procedure and the local Tourist Office is very helpful.

3. The property has achieved as much as £3,000 per week through tourism.

4. If you would like to advance the property further, outline planning permission in the form of a Certificate d'Urbanisme has been granted to develop part of the buildings into 3 more dwellings - some 300m². When constructed this additional habitable space could be offered as tourist accommodation, sold, or greatly increase what is already a substantial family residence.

5. The residue of unmodernized chais, some 960m², presents many further possibilities, for example: vehicle and boat storage; kennels; workshops (there is also three phase electric power); indoor swimming pool, tennis courts or other sporting activities - it is even big enough for an indoor 5 a side football pitch; gymnasium; gallery; conventions; or even more dwellings.

6. If it is not possible for you to live in France in the immediate future, there is a ready market for longer term rentals in the region

For further details drop me a line and I will send you the link to the competition. Contact sales@allez-francais.com