French Estate Agents (Agent Immobilier) and Mandats

This is a highly regulated profession in France and the Agent Immobilier (or French Estate Agent) must be formally registered and bonded as such with French authorities. The paperwork that they are required to keep is quite detailed and very specific.

As a consequence, when viewing property in France, you will be asked to sign a “Bon de Visite”, which is actually a legal requirement in France, (loi Hoguet), although not all agents ask you to sign these documents. It does beg the question that if other agents do not ask you to sign, how competent will they be with any paperwork resulting form a potential purchase.

It does not commit you to anything, but provides a record of the properties that you view and shows that your agent introduced you to that property and the owners. It also requires that you will deal with the agent with whom you have visited a property, and not via a 3rd party or directly with the owners. This of course also ensures that the agent that introduces you to the property will get paid should you proceed to purchase.

Before you can view a property, a agent will need to have a suitable “Mandat de Vente”, (also loi Hoguet), (empowering them to sell a property on behalf of the vendor) completed by the vendor and suitably registered.

Any agents showing houses without a registered mandat de vente are breaking the law and the consequences are very serious. The mandates may be on an exclusive, non-exclusive, or semi-exclusive basis. Since most French properties offered for sale are on the books of several agents, the most common option is the non-exclusive basis. Vendors need to examine the terms of exclusive and semi-exclusive contract before signing as they may be committed for long periods of time and forced to pay a 2nd commission.

Another type of mandat is a “mandate de recherche” (empowering them to seek out property to buy on behalf of a purchaser) and the mandat will specify the price band, type of property and the amount of remuneration.

Finally a word of warning to anyone, of whatever nationality, who is not registered as an Estate Agent or Agent Commercial in France, and who attempts to take a commission on brokering properties, could be held to be committing a criminal offence.

For a selection of properties in the Poitou Charentes region of France use the following link http://www.allez-francais.com/search.php

Peter Elias (Agent Commercial), La Moinerie, 79500 Paizay le Tort, Deux-Sèvres, FRANCE

Tel: 00 33 (0)5 49 27 01 22 or Tel: 00 33 (0)8 77 07 58 99 Mob: 00 33 (0)6 62 28 02 25

Tel: 0871 717 4176 (UK) Fax: 0870 458 1804 (UK)

E-mail: allez-francais@wanadoo.fr

Sterling falling against the Euro

Sterling is the big loser overnight in the markets and it is on the ropes this morning again. Recently we have witnessed a consistent pattern of steady gains followed by a sharp sell off. The pound has retraced to 1.15 against the euro; the 1.15 level is a crucial support on GBP/EUR and a break below 1.15 will be worrying for the pound. So what is causing this renewed weakness for the pound?

Initially the rot was started with the confirmation that June’ public sector net borrowing came in at £13 billion, the figures were actually better than expected but still underlined the dire state of public finances and understandably focused attention as to how we can climb out of this debt? Cue feedback from the National Institute of Economic and Social Research (NIESR) which said that government finances will remain deeply in the red for at least 4 years and this is based on the Treasury tightening the crews on public spending to a higher degree than planned…so a tighter reign on spending and inevitable tax rises is on the menu beyond the next election- very appetizing. Sterling has suffered on this negativity, as it does on any scent of bad news; a couple of articles also added to pressure on the pound- the first reported in the Financial Times highlighting a survey that more than half of businesses did not see any improvement in their prospects for at least another 12 months. The second through the Telegraph noted that Barclays and RBS will need billions more in capital if they are to continue growing their investment banks.

The Bank of England minutes just released offered no surprises with a vote of 9-0 to keep rates on hold and to maintain QE levels at £125 billion. Slightly sterling supportive as the minutes noted a reduction in the downside risks on GDP.

French Capital Gains Tax on property sales

As in the UK, your “principal residence” is exempt from capital gains tax, so only people not meeting this requirement are impacted by CGT. However, one of the most frequent problems is that you can only qualify your “home” as your principal residence if you are formally tax resident in France. It will not qualify if you have been living in the property for some time, but have never entered the French tax system, nor completed a tax return.

The basic rules are fairly simple in that the purchase price can be revalued, by purchase / sale costs (agency fees, Notaires fees & specialist reports), and any major renovation bills, but there is no longer an inflation allowance. The resulting figure is subtracted from the sale price to calculate the taxable gain.

The gain is then taxable at a set rate of 16%, for European residents, with an a extra “social tax” (11% this year) for French residents. Anyone who is not a resident of a European state will pay a set tax rate of 33%.

You need to be aware that the conditions for the acceptance of “renovation work” are very stringent. The works must have be carried out by a registered French artisan (with an appropriate invoice) and invoices for materials that you have purchased yourselves are no longer allowed. One further expense for sales in excess of 150,000 Euros is the need to appoint an official “fiscal representative”, who is responsible for calculating and paying the tax on your behalf. They typicfally charge 1% of the sale value.

There is a significant allowance given for the length of time you have owned a property, after the first 5 years of ownership, as from then on, you are allowed 10% off your capital gain, for each complete year of ownership, with the result that a property owned for more than 15 years is free of Capital Gains Tax.

See also an article on our library pages http://www.allez-francais.com/lib/sa1204_05.htm

Peter Elias (Agent Commercial), La Moinerie, 79500 Paizay le Tort, Deux-Sèvres, FRANCE

Tel: 00 33 (0)5 49 27 01 22 Mob: 00 33 (0)6 62 28 02 25

Tel: 0871 717 4176 (UK) Fax: 0870 458 1804 (UK)

E-mail: allez-francais@wanadoo.fr

French property fees

Most French properties are advertised on the internet with agency fees included. Typically these fees are 6-7 %, and are paid for by the buyer, not the vendor. (This actually works in the buyer's favour, since otherwise the fees would be added to the purchase price and Notary fees payable on the increased sum. Be careful though, some agents charge much higher fees!

Some agencies quote a fully inclusive price, (i.e. inclusive of all fees). Whilst at first glance this may sound like a good idea, the actual figure is often inaccurate, since the price may include furnishings or white goods etc. making the Notary fees quoted inaccurate.

On our website http://www.allez-francais.com all prices are inclusive of agency fees, but exclude Notary fees. So just how much are Notary fees and how are they calculated?

At the bargain basement end of the market, say 60,000 Euros the fees are around 8% (4,692 €).

At 150,000 Euros, the scale drops to 6.74% (10,110 €), and at 255,000 has reduced to 6.43% (16,397 €). For properties above a million Euros you are paying around 6.3%.

So if you agree a purchase that is worth 210,000 net to the vendor you would expect to pay an additional 12,600 € in agency fees, and 14,350 € in Notary fees, making a fully inclusive price of 236,900 (12.8% in fees).

NB. Additional fees are payable when there will be a mortgage registered against the French property.

Peter Elias (Agent Commercial), La Moinerie, 79500 Paizay le Tort, Deux-Sèvres, FRANCE
Tel: 00 33 (0)5 49 27 01 22 or Tel: 00 33 (0)871 7 17 4176 Mob: 00 33 (0)6 62 28 02 25

Visit our website http://www.allez-francais.com/search.php to see around 300 properties in the Poitou Charentes for sale.

French Property dreams

One of the main advantages about buying a home in France is that your money buys you a whole lot more property than it would in the UK. This enables people to "live the dream" and a great example of this ideal, is a new property this week :-

A large 6 bed Logis style house, set in secluded walled gardens of just over an acre with a tennis court, swimming pool and some useful outbuildings. The property is entered via an impressive Charentaise portal. Full details can be found at

http://www.allez-francais.com/details.php?pty_id=955

Competitively priced at 394,500 Euros, the house is in good condition and has 3 en-suite bathrooms. It would make a great large family home, or indeed perhaps a B & B business.

Another great value for money buy is a detached 4 bed country house, available for just 180,200 Euros. Fully renovated, this little gem sits in around 1/2 acre of gardens, in the heart of a friendly hamlet in the French countryside. For further details visit http://www.allez-francais.com/details.php?pty_id=929

The past week has shown signs of increasing activity, perhaps brought on by the £ holding on to the recent gains against the Euro. In fact 2 of our clients have been pipped at the post during this week by other buyers who were more decisive after viewings had taken place. Not quite the busy days of a couple of years ago, but certainly noticeably more activity in the market now. I suspect that prices have now bottomed and this is the best time for buyers to be enetering the market.

Visit our website http://www.allez-francais.com/ to see our selection of around 300 properties.Peter Elias (Agent Commercial), La Moinerie, 79500 Paizay le Tort, Deux-Sèvres
Tel: 00 33 (0)5 49 27 01 22 or Tel: 00 33 (0)8 77 07 58 99 Mob: 00 33 (0)6 62 28 02 25

Encouragement for UK buyers in France

The recent recovery seen in the £ is gradually teasing UK buyers back into the French property market. Sales of property in the UK are slowly getting back on track, enabling many people to revisit their plans for an overseas property. Mortgage lenders are also slowly easing finance back into the system, so that the cogs of finance are progressively being oiled. This is good news for potential UK buyers in France, where property prices are probably back to where they were in 2004. In other words, there are some great bargains to be had. Many vendors have reduced their asking price quite significantly and are still open to negotiation. You can use football as a good example of how one needs to be aware of the impact of currency exchange movements.

Cristiano Ronaldo’s much publicised proposed transfer to Real Madrid was announced on the day the £ hit its highest level against the €uro for six months - and until the paperwork is signed and sealed every rise will costing the Spanish club more money. The pound hit 1.18 euros on Thursday, up from virtual parity at the end of December, and currency experts have calculated that each cent the Euro falls will cost the Spaniards an extra one million Euros. The £80million price the two clubs have agreed would have cost Real Madrid €83 million in January when the pound was much weaker, but at today’s exchange rate the same sterling amount will cost Real Madrid €93 million. The same scenario is happening to ex-pats selling property in France, and this gives buyers with cash in their pockets a great bargaining tool.

As an added incentive to get buyers into the French market, we at Allez-Francais are offering a FREE six month offer of property insurance, for buyers signing a compromis de vente between now and 31/12/2009. (This insurance would have to be arranged via our recommended insurance provider). We believe that we already offer the best option as an agency due to our

v Very competitive agency fees
v Very competitive currency exchange rates
v 1st class service levels
v Highly regarded website http://www.allez-francais.com/
v Accompanied viewings & after sales service

Visit our website http://www.allez-francais.com/ to see our selection of around 300 properties.Peter Elias (Agent Commercial), La Moinerie, 79500 Paizay le Tort, Deux-Sèvres

Tel: 00 33 (0)5 49 27 01 22 or Tel: 00 33 (0)8 77 07 58 99 Mob: 00 33 (0)6 62 28 02 25

£ hits new high for the year against the €uro

The CBI (Confederation of British Industry) commented that the recession will be shorter and less severe than previously expected.

The CBI believes that the pace of contraction will moderate by the end of this year and moderate growth will materialise early next year. They also scaled back their forecast for unemployment from 3.2m to 3.03m by the second quarter of 2010.

However it warned that the recovery would be "slow and gradual" and it would take time to judge whether recent good news will turn into sustainable growth in the economy. This echoes the caution noted by Alistair Darling and comments from Bank Of England officials. Sterling continues to hold respectable levels across the markets, and has this morning hit a new 2009 high of 1.18 against the €uro.

The Euro is under pressure this morning against the USD and sterling following an article in the Daily Telegraph reporting of warnings to be released on the credit conditions in Germany. The DIHK survey to be released this week is expected to confirm that credit conditions for large German companies are not easing despite the interest rates being cut to 1%. This will be a definitive blow for the Eurozone as it essentially affirms that the ECB have not done enough in easing credit conditions…this could lead to the ECB embracing further Quantitative Easing measures. The problem for the Eurozone and the euro is that these measures will not commence until July and could see the Eurozone sticking out like a sore thumb as other major economies drive towards receovery- this will naturally be euro negative.

Good news for UK buyers in France, and 1.20 Euros to the £ is perhaps within sight.

Our currency dealers offer a simple straightforward solution for all commercial Foreign Exchange requirements. Visit our website http://www.allez-francais.com
Peter Elias (Agent Commercial), La Moinerie, 79500 Paizay le Tort, Deux-Sèvres, FRANCE
Tel: 00 33 (0)5 49 27 01 22 or Tel: 00 33 (0)8 77 07 58 99 Mob: 00 33 (0)6 62 28 02 25