A
founder member of the EU, France is the
UK’s
nearest European neighbour and a popular
holiday destination and place for investment.
Its coastline borders the English Channel,
Bay of Biscay and Mediterranean while it
has land borders with Belgium, Luxemburg,
Germany, Switzerland, Italy and Spain.
The country is divided into 22 regions and
96 departments. Alsace, Aquitaine, Auvergne,
Basse-Normandie, Bourgogne, Bretagne, Centre,
Champagne-Ardenne, Corse, Franche-Comte,
Haute-Normandie, Ile-de-France, Languedoc-Roussillon,
Limousin, Lorraine, Midi-Pyrenees, Nord-Pas-de-Calais,
Pays de la Loire, Picardie, Poitou-Charentes,
Provence-Alpes-Cote d'Azur, Rhone-Alpes.
The landscape and climate varies considerably
across the country, from the rugged crispness
of the Alps to the gentle atmosphere of Provence.
Famously agricultural, France also has many
modern and hi-tech industries. The Government
has stakes in a number of major companies
and a significant proportion of the workforce
comprises public sector employees who enjoy
relatively generous benefits and pension
arrangements. There is a current national
debate about the sustainability of current
pension arrangements.
Northern
France – especially Normandy
and Brittany, and the Dordogne – have
been especially popular with a growing
number of Britons buying property in France.
That
number has increased significantly over
the last five years and it is estimated
that
there are now as many as 500,000 British
owners of French properties. The increase
has coincided with rises in French house
prices and has been reported as causing
friction in some areas.
According
to the Royal Institute of Chartered Surveyor’s 2005 European Housing Review,
France was one of the three European countries
in which house prices maintained double digit
rates of inflation throughout last year – the
others were Spain and Ireland. Prices of
existing housing rose by about 16 per cent
over the year and new housing by about
10 per cent.
‘Prices have now been rising continuously
for eight years, since the end of the mid-1990s
slump in 1997, and have been accelerating
on a trend basis. Over that period, nominal
prices have doubled nationally with almost
half of the increase occurring in the past
three years’, said RICS.
There is no restriction on UK citizens buying
property in France although care has to be
taken over tax, legal and inheritance issues.
In general realised short term capital gains
are likely to be taxed more heavily than
in the UK, while inheritance rules require
a proportion of the value of property to
be passed on to children (although there
are legal devices available to delay this
in favour of a spouse or partner).
In
transferring a property both the buyer
and seller must use a notaire (a state appointed
lawyer who usually acts for both sides)
although
they can if they wish also seek additional
legal advice. The notaire’s fees plus
stamp duty are likely to come to between
6 per cent and 8 per cent of the price. In
some instances estate agents’ fees,
which can be as high as 10 per cent, are
also payable by the buyer.
Buyers
should be warned not to commit themselves
to a purchase before they intend.
A compromise
de vente, often presented by an estate
agent, is a legally binding agreement
to purchase – although
there is a brief cooling off period allowed
after signing during which the agreement
can be nullified. A deposit of about
10 per cent of the purchase price will be
required
at this stage.
Completion
of the purchase transaction will usually
involve attending
the notaire’s
office to hear the contract read through
(at rapid rate).
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