Good luck with the research.
And yes there is a lot to benefit from by moving (as long as it is financially viable)…but rural France can still be a little quiet for some, especially in winter.
Graham
Hello, I’m Jo, Phil Scanlan’s partner.
Approximately 2 weeks ago we decided to look into an early retirement to the south of France. We’re in the initial stages of research on tax, superannuation, stocks, shares, Assurance Vie, Visas, learning the French language, index funds. . . the list goes on. A month ago I’d never even looked at my superannuation balance!
This is a very exciting time for us but it’s also daunting.
I am English and moved to Australia when I was 24. I took French for a couple of years at school but chose the German language as my GCSE subject instead. I lived in Germany for a year when I was in Uni and the easier option would be to retire there, as I’m already familiar with the language. . . but the south of France draws me in due to the temperate climate and housing affordability. (Phil and I have built 2 houses in Sydney and have a lot of experience with DIY, so we’re looking at a renovator).
We’re very much looking forward to quitting work and spending our time doing things we love.
One thing I keep reading of people who retire early to Europe is that they “wish they’d done it earlier”. We’re hoping to live this dream.
Right now our biggest conundrum is whether to pump “after tax” cash into superannuation or just to leave it in the offset account for the mortgage (or even invest it. . . gulp!). Does anyone have any experience with the rates charged by the French government with drawing down their super or taking it out as a lump sum? I’ve read that if you draw it down you’re taxed the normal banded rate, and that if you take it as a lump sum you’re taxed 6.75% (7.5% minus 10% of the 7.5%). . . but what about the social charges?
Thanks in advance. . . looking forward to reading more and contributing more 
1 Like
Hello again, I wonder if anyone could help us please. . . ?
Phil and I are in the middle of discussions over whether to pay ‘after tax dollars’ into Super, or just pay down the mortgage instead. . . can anyone add their opinions/experiences?
It seems that, unless they change the laws by then, Australia will tax us on earnings before we put them into Super, then France will tax us when we withdraw it in our retirement.
I’m creating a spreadsheet so we can compare apples with apples. We’re working on the assumption that cash in Super or an Assurance Vie will give interest of 5% per annum.
Can anyone please tell me if my assumptions below are correct or not? Thanks again!
-
If we take Super as a lump sum at preservation age, France will tax us 6.75% flat rate (7.5% - 10%) and 6.9% social charges.
-
If we draw down on super at preservation age, France will tax us income tax as per bands, plus 6.9% social charges.
-
If we pay the money off the mortgage and transfer the proceeds from the sale of our house over to France, they won’t tax us anything on the lump sum?
-
If we then put this money into an Assurance Vie, after retirement age France will tax us income tax as per bands, plus 6.9% social charges. . . ONLY on the ‘gain’ portion of what we draw down.
1 Like
Hi Graham, Phil and I are working through things on our quest to retire to the South of France. . . we’ve seen some lovely properties online around the Dordogne region, and they’re all so reasonable compared to Sydney prices. We’re looking to come over for a visit in a couple of years and are wanting to check out some different areas before we make the plunge.
We’re far past the stage of “raging” back in Sydney, and find most enjoyment pottering around the house doing DIY, gardening and watching movies so I don’t think the quietness will be a deal breaker for us. . . If it’s too cold we might just pop across to Spain for a month or so! Do they still have hotel rooms for a pound a night?
We do hope to be able to travel quite a bit when we come over too. . . I’d love a small caravan, but we’ve read that they’re not very popular over there? That some of the streets are just too narrow?
I suppose what we would like is to live within 30 minutes of a few different towns with restaurants, cafes, markets, shops etc. . . and within an hour and a half or so of one or two cities if possible too.
You mentioned that social charges on Australian pension are currently 6.9% and that on Investments they are 17.2%. If you are past retirement age, do you know if an Assurance Vie be considered an “Investment” or a “Pension”?
Anyway, thanks in advance. hope you’re doing well.
Jo.
oh . . and we saw our normal tax agent last week. . . she informed us that we’d get hit bigtime for tax on our investment property if we leave Australia. . . awesome!!!
They’re sneaky, these governments. . . if we keep it and become “non-residents for tax purposes” we’ll get charged a flat rate of 37.5% tax + medicare levy on any income (which we can then use as an offset for any taxes paid in France). . . and if we sell it after we’ve gone, we won’t get any relief on CGT.
Great! Should’ve just bought a racehorse.
What are your plans in light of this Tax news…
Why, buy a racehorse of course! 
Haha, well, maybe not. Stuffs up our plans though, as it was meant to be a long term investment, one that would provide an income through retirement and a lump sum later on when we’re close to death 
We have no kids, so we don’t need to leave an inheritance. Well, maybe just a little something to the dog’s home 
I suppose now we’ll just have to sell it at some point before we leave and hope we don’t lose any money.
We were advised to sell up in UK to simplify our tax affairs.
At least you won’t be blindsided by Brexit, that is a real blow.
It means that, although we moved here with the intention of staying to the end, we feel that we would not now be happy going back to live in that type of UK.
Our area of southern Burgundy, the Clunysois, is popular with Aussies, although mainly as second homes.
Aha Jane, Brexit affects me too, as I’m English. I moved to Australia in 1999.
I’m interested to see what the outcome is next March. Oh, and after living the good life in Aus for close to 20 years, I don’t think I could go back to the UK to live.
I suppose there’s not much we can do about the investment property now, apart from sell before we leave, but maybe by documenting it here someone else can learn from our mistakes?
Oooh Burgundy. Now there’s somewhere we haven’t considered yet. How do you find living there?
Hi Joanne…sorry that it has been a few days for the response, but I have been away from home.
Seriously the Dordogne has its good points, but not unlike anywhere it also has negatives. It is supposedly one of the poorest departments in France and if it were not for the Ex pats, the department would struggle. A lot of english and some dutch in the department, but also a growing number from Aust. The northern part is quite agricultural and a lot of english enclaves (Riberac; Nontron & Brantome) Quite picturesque in parts, but we prefer the south (still lot’s of Poms) around Bergerac, Perigeuex, Duras (Lot & Garonne). The weather can be cool in winter (especially North) but we have just had an extended summer with about 8-10 weeks of 35+ degree temps.
We live in Port Sainte Foy (across the river from Sainte Foy la Grande and we are 25 mins from Bergerac (28,000 pop) and an hour from Bordeaux (500,000+). Good flights from Bergerac to UK and from Bordeaux to many places. TGV from Bordeaux to Paris now takes only 2 hours so you can go to Paris for a week-end easily.
Cost of property is very cheap by comparison to OZ, but just be aware that it can take up to 5 years to sell a property if you need to. There is not a great opportunity for capital gain unless you buy the right house in the right location. Food & wine is cheaper than OZ mostly, but if you want to sit back & watch movies, you will need more than french TV and perhaps a SKY box for UK TV (although it is pretty poor also). We us iptv thru the internet, but you need good internet speed and it is not always considered truly legal (no problems for us over 3 years)
Spain is about a 3.5 hour drive from our place (to the border) and the Mediterranean can be reached in about the same. Lots of picturesque villages and countryside and we are in the middle of Bordeaux wine area so lots of vines and good cheap wine.
The pace of life is very agreeable in rural France and few problems. Health system id fabulous once you can get in (eligible after 3 months residency) but it does cost that 6.9%.
An assurance Vie is regarded as an investment, but they are generally tax effective, because you generally do not draw funds from them in the first 8 years. If you do you will pay full tax on the funds drawn. We retain our private pension in Australia and repatriate funds to France once or twice a year (hoping for good exchange rates). When we first came over, the exchange rate was $1AUD= 80 eurocents, but today it is more around 61-62 eurocents, so a significant fall in value.
To settle here, you would need to apply for a Visa longue durée (12 months) and which is usually readily renewable each year. Effectively in the second year you apply for a Carte de Sejour for temporary residence for 12 months. This in effect is an extension of your initial visa.After 5 years you can apply for a 10 year Carte du Residence. French admin drives many people bonkers, but you just have to learn to relax and not be rushed. Drivers Licence needs to be exchange for a french one within the first 12 months and can sometimes takes 6 months to process.
Hope this info helps, but feel free to contact me anytime with questions.
Cheers
Graham
1 Like
Thanks Graham,
I’ve read somewhere about the time it can take to sell a house. So. . no use thinking we can make some fast cash flipping houses then eh! We will have to be very careful when deciding on where to live, as it looks like it may become our “forever home”. The lack of opportunity for capital gain might actually benefit us. . . especially if the Australian housing market continues its epic climb.
We don’t really want to be stuck in the middle of nowhere, so we’ll have to do some due diligence. If we could be half an hour away from various different towns with a few cafes, restaurants, markets, shops and within an hour and a half of Bordeaux or Toulouse then we’ll be content I think.
Actually, good point about the internet. We’ll really need to make sure we can get good internet wherever we end up, as I imagine we’ll stream most of the TV through something like your iptv. . . but maybe in 10 years everything will be totally different?
We’re really excited about being so close to so many different places. Before I moved to Sydney, I never truly appreciated how close everywhere in Europe really is. We really just love going for drives and exploring, so I’m sure we’ll be in our element. . . do you get to travel about much Graham?
The health system sounds great, and well worth it. We Aussies know how much healthcare can cost . . . I’ve heard that even the vet bills over there are a fraction of what we pay here. . . that will be an immense relief!
From what I’ve read, it’s only the interest in the assurance vie that attracts tax and social security charges, and only when you withdraw from the account. . . so withdrawing within the first few years doesn’t seem like it will attract much income tax anyway (if any at all), and only minimal social charges. We really need to have a good look into these as I think it will be where we transfer everything when we come over. . .
Here’s hoping for a better exchange rate in the coming years. It really does make a massive difference.
I’m ready for the bureaucracy. . . pitchfork in hand (hahaha). . . we’ll be retired so we’ll have lots of spare time on our hands! . . . gulp. We are both already learning the French language. . . Phil likes to recite bad French to me whenever he can (ARGHHH). We’ll keep it up as I know we’ll appreciate it when we get there.
I’m writing notes on EVERYTHING. . . I have a file. . . Definitely need to keep on top of the documentation side of things and make sure we get things done in time … . thanks for the info on the driving license. . . noted!
We live in the Clunysois in Saone-et-Loire which is rural.
It is absolutely beautiful and we have been made more welcome here than anywhere we lived in UK.
Macon is our largest town but Cluny is our nearest.
Very historic.
Lyon is one and a half hours away and is a centre of excellence for medical treatment, culture and, of course gastronomy.
You can get the train from Macon to Lyon easily.
We are about one and a half hours from Lyon airport and two from Geneva.
Thanks Jane, sounds lovely . . . I had a quick look in your area, the houses seem more expensive than the Dorgdogne and Limousin. . . so we may have to save a little longer and harder, but I do like the idea of being close to Lyon!. . . mmmm Gastronomie. . . my favourite!
Joanne, I realise that it is some considerable time before you make the move, but a little note to be aware of.
If you are eligible for or intend to apply for in any way the Australian Old Age pension, make sure that you do it in OZ before you leave. Currently there is no bi-lateral Social Security Agreement between France & Australia and this means that you cannot APPLY for the pension from France. You can however transfer existing payments or have them continued payment to your OZ Bank account. France is one of the very few European countries where you cannot access the OAP.
Maybe not a major issue, but any OAP payment simply means that your own capital will stretch further.
With regards to the Assurance Vie, yes it is only the income aspect taxed as I understand it, but you should refer to an investment specialist for professional advice
Graham
Thanks very much for that Graham.
At this point I don’t think we’ll even get a sniff of the government pension. Even if there is any left in the coffers, I think we will probably have too much superannuation and savings to benefit. . . that is, unless we squander it all in Vegas. . . woohoo!
Yes, this Assurance Vie thing is a mystery, and at the moment the interest rates for cash deposits won’t allow us to live out our dream 
I think we may have to look at a more risky strategy within the Assurance Vie . . . and that will require a lot of reading before we get any advice.
Can’t complain though, the miniscule interest rates have helped us pay the homeloan off a lot quicker than we otherwise would have. . . just a few more years and I’ll be happy if they go up 
It would be nice if the treaty between Australia and France changes in the next 10 years so that France doesn’t tax us on our Superannuation! Maybe that’s too much to ask?
How’s your week going anyway Graham? What’s the weather like over there?
Hi. Just joined this site. I live in Tasmania and did a house sit in Brittany in June. I could not believe how much real estate there is for sale and the prices. I’m currently thinking of stringing together a good few months worth of house sits next Australian winter, but I’m also toying with the idea of buying something. Problem is knowing where. Pros and cons to sitting vs buying.
Now I’m thinking of buying a camper to tootle around looking - maybe that would be good enough long term, though I do wonder how cumbersome that sized vehicle would be. Anyway some of the houses aren’t much bigger than a campervan. It really does show you how wasteful housing sizes are in Australia when you see what other countries live in and they’re quite often fine. I’m 54 and pretty much retired. Live off investments. Only need the internet to make a living (a great position to be in).
Most discussion in this thread is about a permanent move, but I wonder about the legalities of spending 4-5 months a year in France (summers in Tassie are very nice).
I found a site that reckon they have a technique to enable foreigners to register a vehicle:
https://www.eurocampingcars.com/en/
I gather it’s ok for a non French citizen or permanent resident to own a house, but I’m not sure how you’d manage health care (expat insurance?) and just the practicalities of leaving a house and vehicle for 6+ months.
Re TV - the English couple that owned my house sit property had UK TV via the internet using a router bought from libertyshield.com. I think that’s just a VPN that enables them to use their UK residence TV sub services. I did a google and there’s quite a few options. Here’s just one I found - no idea what it’s like:
https://www.my-expat-network.com/
You can also use Netflix etc.
I know an aussie couple who have a second home here and they have three month visas.
They did overstay but got caught, big fine.
I think if you have a second home it would surely be worth getting the long stay visa. It can’t be that hard or expensive. Or could you do the pop over the border for one night trick on the 90th day? Problem with that nowadays is there might not be proof you’ve been over the border.
Hi William, and welcome! I’ve only just started on the forum too.
We too are tempted into the good life in France.
We’ve been looking into the tax related side of moving over the France and it’s complicated. You’ve probably got the right idea of just staying in Australia “for tax purposes” (i.e. for more than 6 months of the year"). As a non-resident of Australia, I believe you would be taxed a flat rate of 37.5% (plus medicare) on all of those Australian investments. Ouch.
Actually, Phil put it forward to me as an option. . . I must admit I was not keen on the idea of having 2 homes, and especially of making that long haul flight every year. . . but now you’ve got me thinking!
Phil
Would you mind sharing a name for that accountant specialising in Australian and French tax law in Sydney? Were they good?
Thanks
Ian