The allure of France has perennially drawn individuals from across the globe, with its rich cultural tapestry, exquisite cuisine, and landscapes that range from the ruggedly charming to the serenely picturesque. For UK expats eyeing their golden years, retiring in the lush wine country of France presents a dream imbued with the aroma of fine vintages and the gentle hum of serene living.This article explores the appeal of retiring in France, delving into the facets of property, lifestyle, and navigating the mortgage landscape, particularly in the context of post-Brexit implications.
The Appeal of the French Countryside
France, with its sprawling vineyards, historic towns, and a lifestyle that gracefully intertwines leisure with a vibrant local culture, offers a retirement that is as enriching as it is tranquil. The wine regions, such as Bordeaux, Burgundy, and Provence, offer not just the promise of splendid vintages but also a lifestyle that is deeply rooted in the local terroir, offering a blend of leisurely pursuits, culinary adventures, and a community that shares a profound appreciation for the finer things in life.
Properties range from rustic farmhouses to elegant chateaux, each offering a unique charm and a connection to the lush, verdant landscapes that have become synonymous with the French countryside.
Lifestyle and Community
The lifestyle in France’s wine country is one that is deeply connected to the land and the community. Markets brimming with local produce, festivals that celebrate the harvest, and a daily life that is as relaxed as it is engaging, offer a retirement that is active without being hurried.
Communities in these regions often share a close-knit bond, with local events, tastings, and gatherings offering ample opportunities to forge connections and immerse oneself in the local culture and traditions.
Navigating Property and Mortgages Post-Brexit
The implications of Brexit have introduced new considerations for UK expats looking to retire in France. While the allure of the French countryside remains steadfast, it is imperative to navigate the property and mortgage landscape with an understanding of the new regulations and requirements.
UK expats are now subject to non-EU regulations when it comes to property purchases and mortgages in France. While French banks have traditionally been open to offering mortgages to non-residents, the process may involve stringent checks, a requirement for larger deposits, and potentially higher interest rates.
Understanding the nuances of the mortgage application process, including the documentation, eligibility criteria, and potential tax implications, becomes pivotal in ensuring a smooth transition to your retirement home in the French wine country.
Healthcare and Residency
Healthcare is another pivotal consideration for retirees. France offers an exemplary healthcare system, and while UK expats can access healthcare services, it is crucial to understand the changes post-Brexit and ensure all legal and administrative requirements are met to access healthcare services.
Residency is another aspect that has been impacted by Brexit. UK nationals now need to navigate through visa applications and ensure compliance with the residency regulations applicable to non-EU citizens. Understanding and adhering to these regulations is crucial to ensure a seamless and compliant transition into retirement in France.
Retiring in the wine country of France offers a picturesque and enriching experience, where the tranquility of the landscapes, the richness of the culture, and the warmth of the community offer a golden chapter that is as leisurely as it is vibrant.
Navigating through the property, mortgage, and administrative landscape, particularly in the context of post-Brexit implications, requires meticulous planning and adherence to the new set of regulations and requirements. With the right preparation and understanding, the dream of spending the golden years amidst the vineyards and historic charm of France’s wine country can be a reality that is as splendid as the finest vintages the region has to offer.
Note: This article is intended for informational purposes and does not constitute legal, financial, or professional advice. Always consult with a professional when making decisions related to property, legal, and financial matters
The French Riviera, or Côte d’Azur, has long been a beacon of opulence, attracting the affluent and the aspirational to its azure coasts and luxurious locales. With its enchanting blend of natural beauty, cultural richness, and a palpable sense of exclusivity, the Riviera presents a compelling proposition for property buyers looking to immerse themselves in a world where the charm of the Mediterranean meets upscale living. This article delves into the allure of the French Riviera, exploring property options, pricing, and the mortgage application process for expats.
The Allure of the Riviera
Nestled in the southeastern corner of France, the Riviera unfurls itself along the Mediterranean, offering a picturesque tapestry of turquoise waters, golden beaches, and lush landscapes. From the glamour of Cannes and Monaco to the artistic allure of Nice, the region boasts a myriad of experiences, each locale offering its unique flavor and appeal.
Properties here range from lavish seafront villas and historic estates to contemporary apartments that offer a slice of modern luxury amidst the timeless appeal of the coast. The Riviera is not merely a destination; it is a lifestyle, offering a blend of leisure, luxury, and a vibrant cultural scene that captivates residents and visitors alike.
Property Options and Pricing
The property landscape in the Riviera is as diverse as it is exquisite. Cannes, known for its famed film festival, offers a mix of luxury apartments and villas, with prices soaring particularly high along the coveted Boulevard de la Croisette. Nice, with its rich history and vibrant cultural scene, offers a range of options from chic apartments in the city to serene villas on the outskirts.
Monaco, synonymous with affluence, offers some of the most premium properties, with prices reflecting the exclusivity and prestige of the microstate. The property market here is competitive, with demand often outstripping supply, leading to a premium on property prices.
Navigating the Mortgage Application Process
For expats and international buyers, navigating the mortgage application process in France can be a meticulous endeavor. French banks are generally open to lending to non-residents, though the process may be stringent, requiring a thorough assessment of the applicant’s financial stability and creditworthiness.
Typically, French banks allow borrowers to allocate up to one-third of their gross monthly income towards loan repayments. The required documentation often includes proof of income, financial statements, and identification documents, among others. It is also crucial to account for additional costs such as notary fees, transfer taxes, and potential agent commissions.
Legal Considerations and Property Taxes
Understanding the legal framework is pivotal when purchasing property in the Riviera. Engaging a notaire (a French public official) is obligatory for property transactions, ensuring legal clarity and adherence to French property laws.
Property taxes, including taxe foncière (land tax) and taxe d’habitation (residence tax), are pivotal considerations in the overall cost assessment. Additionally, capital gains tax may apply to the sale of the property, contingent on various factors, including the duration of ownership and whether it is the primary residence.
Embarking on a property-buying journey in the French Riviera is an exploration of both the tangible and the experiential. Beyond the physical properties, it is an investment in a lifestyle that marries the tranquility of the Mediterranean with the vibrancy of cultural and social happenings.
While the allure of the Riviera is undeniable, it is imperative for prospective buyers to navigate the journey with meticulous attention to the financial, legal, and procedural aspects, ensuring that the venture is not only enchanting but also judiciously sound.
Note: This article is intended for informational purposes and does not constitute legal or financial advice. Always consult with a professional when making decisions related to property purchase and financing.
Embarking on the journey of property financing can be an exhilarating venture, especially when it spans across borders, intertwining with the tax laws of two nations. For dual citizens of the United States and France, this journey involves navigating through the intricate web of tax obligations, ensuring compliance with the legal frameworks of both countries. This article seeks to explore the complexities and provide a guide to managing tax obligations in the US and France when financing property as a dual citizen.
In France, lifetime mortgages are known as Prêts Viagers Hypothécaires. A French lifetime mortgage is a long-term loan secured on a French property. Unlike a regular mortgage loan, you don’t make any monthly repayments as the interest builds up on your loan each year. A Lifetime mortgage does not need to be repaid before you pass away or before you decide to sell your property. A lifetime mortgage is a way of taking out cash from the value of your home, without having to move.
Who qualifies for a lifetime mortgage?
To be eligible to release equity with a lifetime mortgage, you must:
- Be over the age of 65 and under the age of 85
- Own a residential property in France worth at least €200,000
- Want to release at least €70,000
- Be a full time resident in France
- Evidence a minimum level of income
Some typical reasons for releasing equity with a lifetime mortgage might be to:
- Adapt your home, so you can continue to live independently
- Renovate or refurnish parts of your home
- Pay one-off private medical bills, or receive ongoing care at home
- Help children and grandchildren with house deposits, weddings or other major events
- Pay off an outstanding mortgage, including the shortfall on an interest-only mortgage
- Fund leisure interests, a new car, a holiday, or visiting relatives abroad
How much can I borrow ?
The maximum loan amount depends on the property value and on the age of the borrowers. Typically, it is possible to borrow between 40% and 50% of the appraised value of your property.
When is the loan repaid ?
A Prêt Viager Hypothécaire would end:
- If ALL borrowers were to pass away
- If the mortgaged property was to be sold
- If the borrower decided to repay the loan early
What happens with my lifetime mortgage when I pass away?
A lifetime mortgage is designed to be paid in full when you (or you and your partner, if held jointly), pass away.
The people who deal with your estate will be given a reasonable length of time to repay the loan, which is currently 12 months.
If the value of both the loan and the interest is in excess of the value of the house, then the debt repayment is restricted to the value of the house and to no more.
Feel free to get in touch for further information.
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Specific rules and regulations defining the requirement to appoint a Fiscal Representative when selling a French property are governed by CGI, article 244 bis A
In summary, the sale by a non-resident individual of a real estate property located in France requires the appointment of a tax representative, except under the scenarios for dispensation set out below.
Three scenarios allow for automatic dispensation from appointing a tax representative:
• When the seller lives, is based or is incorporated in an EU Member State or in another country party to the Agreement on the European Economic Area (EEA) which has signed a mutual administrative assistance agreement with France (Iceland and Norway)
• For sales of €150,000 or less. This upper limit is assessed for each seller.
• For sales allowing for capital gains exemption both in terms of income tax and social levies owing to the duration of ownership of the property (22 years for income tax and 30 years for social levies)
With effect from 1st January 2021 and due to BREXIT, owners of French properties residing in the UK will no longer be exempt. As such, all UK residents are now required to appoint a Fiscal Representative when selling a French property. The requirement to appoint a Fiscal Representative applies regardless of whether Capital Gains have occurred.
Who can act as a Fiscal Representative ?
The following entities and individuals are authorised to act as tax representatives:
• A company or organisation already permanently accredited by the tax authorities
• Banks and credit institutions carrying on their business activity in France
• The buyer of the property if he is resident of France for tax purposes
• Or any other person who is resident of France for tax purposes, except notaries and lawyers. In the latter category, the representative must be accredited by the tax authorities.
Who and when to appoint a Fiscal Representative ?
Accredited private companies authorised to act as Fiscal representatives are frequently appointed by the French notary at the time the sale takes place. It is not uncommon for the seller not to be consulted as French notaries often request the assistance of a Fiscal Representative company they are used to working with, without any necessarily operating a tender process.
What is the role of a Fiscal Representative ?
In essence, the role of a fiscal representative is to calculate the gain or the loss in value related to the sale of the property. The Tax agent is in charge of all the fiscal procedures including establishing and signing the forms required by the French tax administration.
A fiscal representative effectively guarantees the accuracy of the Capital Gains calculation and acts as a guarantor should the calculation be incorrect and if penalties are applied.
Because of Fiscal representatives are liable for any incorrect tax assessment, private companies tend to have a conservative approach when calculating Capital Gains Tax. This typically comes in the form of expenses or renovation costs not being recognised as items deductible in the CGT calculation.
What is the cost of a Fiscal Representative ?
Private companies accredited by the tax authorities will charge a fee ranging between 0.3% and 1% of the selling price of the property.
Individuals authorised by the French tax administration to act as Tax Representatives for a specific transaction can proceed free of charge.
Our advice is quite simply that sellers should consider the appointment of a Fiscal Representative and the calculation of Capital Gains Tax very carefully. As much as 1% of the sale price as well as actual Capital Gain Tax liabilities are at stake.
It is our recommendation that the following steps should be followed :
- Determine whether any tax exemptions apply to you
- Assess deductible expenses, reliefs and default fees to calculate your Capital Gains tax liability
- Search the market and compare options before appointing a Fiscal Representative
Please get in touch if you require further information or require assistance with this process.
The majority of French lenders require that a Life and permanent disability insurance contract is arranged alongside a mortgage. This is a standard risk requirement and the policy must be underwritten by a French provider.
As an authorised mortgage and insurance broker, Bluesky Finance work with a large panel of insurance companies. We can source and arrange insurance policies which meet both the lenders’ requirements and your requirements.
We can arrange Term Life insurance policies :
– For individuals residing outside Europe, including the USA, South America, Africa or the Middle-East
– For borrowers aged 70 and above
– With a simple Health Questionnaire for amounts up to €1,250,000 for borrowers aged up to 45
– With a simple Health Questionnaire for amounts up to €800,000 for borrowers aged up to 55
– For policies requiring medical underwriting, all tests can be undertaken in your country of residence
It’s early 2021, we are all impacted by lockdowns and strict travel restrictions. Against all odds, Non-Resident buyers are still active in the French property market. Here is a brief overview of mortgage lending in a post BREXIT world :
- Overall, few changes as a result of BREXIT but some new pitfalls to be mindful of… The end of the EU financial passporting system has become a significant hurdle for UK intermediaries. EU lenders have taken steps to avoid being regulated by the UK FCA. More hoops to jump for British residents but nothing that can’t be overcome.
- Many individuals can’t get what they are looking for… Large disconnects between expectations and reality… Sadly, lending propositions do not meet demand
- Most lenders and insurance companies are able to accommodate a full remote origination process (No travel required). The most challenging aspect of processing a case remotely is often related with the mortgage Life Insurance application process. Undertaking medicals required by insurance companies can be challenging in periods of lockdowns and over-stretched health resources.
- Interest rates remain extremely low. No pricing for risk…. You are either in or out.
- Strict lending underwriting criteria… strong emphasis on affordability
- “Escape to the Château” may be fun to watch but won’t get lenders excited…. Gîtes, Fishing lakes, wedding venues etc even with the most robust business plans will have to be self funded
- Interest-only plans without collateral available up to 75% / 80% LTV
- Capital repayment plans available up to 85% LTV
- Duration up to 20 years. 25 years at a stretch
- Limited appetite for small amounts (<€150k), complex deals and non salaried applicants
- Lower rates available with Assets Under Management at ~60% LTV
- Lending to US persons still impacted by FATCA but some interesting propositions available
- Service is “hit and miss” and generally slow …. Depends on who you know. People trump processes…
- Private bank lending a good option for assets >€1m…. better service & expertise
Bluesky Finance is a France based independent specialist mortgage broker. We search and arrange high-quality mortgage solutions for international buyers. email@example.com + 33 (0) 9 82 56 61 57 More information
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If you have plans to relocate to France, you may be eligible for very advantageous tax arrangements, subject to certain conditions.
The expatriate tax regime applies to individuals who were not residents of France for tax purposes during the five calendar years prior to their taking up their duties in a company based in France.