If, over the years, you have been interested in an investment property abroad, chances are that France was one of the top destinations for you to consider. For many years, France has been attracting thousands of UK investors and holidaymakers due to its close proximity to the UK, warmer climate and fashionable lifestyle.
According to Matthieu Cany, director of French estate agency network Sextant Properties, the Brits’ love affair with France is unlikely to end because of Brexit or the pandemic. In fact, the network, which has over 250 agents under its wings and covers almost 85% of France’s regions, says that British buyers now make up 19% of its international client base; a 9% increase since 2019.
“British buyers, whether they are buying for investment or lifestyle purposes, have always represented a large percentage of our international clientele. Despite popular belief, Brexit hasn’t stopped British nationals from buying a home in France.
“It actually led to a wave of enquiries from buyers who were eager to purchase a property before the Brexit date of December 31 2020,” Cany comments.
According to figures from INSEE, France’s official statistical service, there are known to be at least 150,000 Britons living in France. Although it was expected that the number of UK nationals moving to EU countries would decline due to Brexit, a study by OECD and Eurostat revealed a significant increase in British nationals emigrating to the EU since the UK officially left the bloc on January 31 2020.
The same report notes that between 2016 and 2018, a total of 10,280 British nationals registered for permanent residency in France.
The pandemic, on the other hand, initially resulted in a temporary decline in sales enquiries in 2020, triggered by global travel restrictions and uncertainty over the wider economic consequences of the virus. With the global rollout of vaccines and people’s general desire to return to some form of normality, however, Sextant Properties says the market is beginning to pick up again and it’s only a matter of time for it to reach pre-pandemic levels.
In fact, comparing December 2020 to January 2021, Sextant Properties saw an astonishing 70% increase in sales enquiries from French and international buyers. The latest data, further indicating a market revival, comes from property portal SeLoger and shows that despite coronavirus, the average resale prices of properties stands at €265,500 as of 2020. That’s a 6.5% increase compared to the previous year.
What has changed since Brexit?
If you are looking to buy a property in France, there are a number of new legislations to be aware of:
90/180 day rule
Since January 1 2021, a new 90/180 rule applies throughout the Schengen area of which France is a member. This means UK residents will only be able to spend 90 out of every 180-day period in the European Union. For UK residents with second homes in France, this means they can spend 180 days a year at their second home but not all in one go.
No additional taxes for buyers
If you are going to buy a property in France, rest assured that the purchase costs for non-residents has not changed. UK buyers would still be subject to 7% tax for existing properties and 2% for new-build properties.
Capital Gains Tax
Once you have had your French property for a while and decided to sell up, you are required to pay capital gains tax (CGT) and a social levy. CGT is set at 19% and only payable if your French property is registered as a second home and not your primary residence. The social levy for British owners of second homes in France, however, has increased from 7.5% to 17.2% as of January 1 2021.
Another requirement for Brits looking to sell their second home in France is to appoint a fiscal representative for any sale above €150,000. The charges range from 0.5% to 1% of the property’s sales value.
If you are interested in purchasing a home in France and would like to receive more advice, please contact Sextant Properties on +44 (0) 207 428 4910 or visit www.sextantproperties.com.
*Sextant Properties, founded in 2005, is a leading estate agency network for the French property market, with more than 230 estate agents under its brand. It's also a member of the National Association of Estate Agents (NAEA).