Buy or rent and other questions

Property & Home
1

Hello to you all.

I am researching a permanent move France and had a couple of questions I was hoping some of you could help me with:

We have a couple of buy to lets we would rely upon for income. For the price of another BTL in the UK we could buy a home in France. However, rent from a BTL in the UK (after tax) would allow us to rent a house similar or perhaps better than one we could afford to buy for the same amount in France. What would you do, buy in France or rent?

I understand that tax is paid in the UK on rental incomes and under the double taxation treaty with France we would not be taxed twice. However, I did read that, despite social charges being classified as a tax under the treaty, some people are still getting stung for social charges in France. I understood from the article I read that the outcome was pending. Does anyone know the situation?

One thing that is really difficult to get a handle on is how much is enough to live on in France. And of course it's a bit of an open-ended question, but it is hard to relate each situation one reads about to ones own circumstances. As a generalisation (i.e. not living in Paris, nor living in the woods on berries and nuts) would a net income of 2500 Euro be enough to live on (two of us and a 5-year old)? Of this we would have to also pay rent. I have done some sums and it comes out with a couple of hundred a month spare (see below), but is this realistic? Will we be on the border-line?

Health Insurance 1,740.00
Tax Habitation 900.00
Water 400.00
Wood 500.00
POwer 1,200.00
Fuel 1,200.00
Car and Home Insurance 840.00
Comms 600.00
Entertainment 3,000.00
Service and car maintain. 600.00
Rent 9,600.00
Food 6,000.00
Clothes 1,920.00
Total PA: 26,760.00

Total per month 2,230.00 Euro



Thanks, Martin

2

Thanks V-much for the offer of help, Kate.

3

Thanks Corinne and Andrew, this is really useful info. I don't need to pay to be in the city. However the airport is crucial, from this Pessac house I can be in a Barcelona or Amsterdam office two hours after waking up.

I will check out the websites you two mentioned, thanks.

4

@Imre, a quick look on leboncoin and you're paying the going rent for Bordeaux - obviously it's more expensive than others as it's a grande ville. @Imre and Corinne - We've rented three bed detached in the Cantal and the Aveyron, both with big gardens for 500€ a month. We're selling our place and renting again near our new business in Carmaux - rentals around albi for the same thing are 700€ for bog standard to 800€ a month for something nicer (we've just sent in a dossier for a detached, 3 bed in 1700m² garden, complete sous-sol, electric gates, garage doors, blinds etc and underfloor heating + air con. BUT there's a list of people who want it, they're collecting all the dossiers and will decide at the end of the week) we've already missed 3 or 4 houses as there are too many locataires for the supply at the moment. Again we could go the other way back up the hills into the aveyron and find the same thing for 500€ a month. In short, it depends where you are, supply and demand and of course on the local job situation (20%+ unemployment in Clérmont l'Hérault and Lodève), you wouldn't find a thing in Montpellier for 800€ a month Corinne, infact Montpellier makes Bordeaux look cheap ={:-O

Always worth trying leboncoin/paruvendu etc. to try and get something privately too, saves on the agent's fees ;-)

5

Hi Imre,

You might have seen my comment on this thread earlier but just thought you might like the details of our lettings agent, (especially as you said you like the south, we live in Herault, in the hills, a 15 minute drive to the new A75 - toll free :-) and only 45 mins to Montpellier and Beziers airports). Our lettings agency is in Clermont l'Herault http://www.laforet-languedoc.com and our agent is Sophie Chanlot, you can contact her with your search requirements on this email address nego.laforet.clermont34@gmail.com. They don't seem to advertise all properties online, so it's worth enquiring. Your rent seems really high to me, or maybe we just got a good deal, 800 per month for a villa with a garden, terrace, garage and 3 bedrooms, not to mention amazing views of the valley :-)

I hope some of this info is of use to you.

Good luck and best wishes, Corinne :-)

6

Thanks everyone for the interesting discussion. I just got around to reading it in detail after a lot of traveling recently. I was surprised about the 600-800 Euro rentals - we in Pessac (Bordeaux) pay 1100 for a small 3 bdrm house with essentially no garden (though it has a nice garage for my canoe, bike etc. (and btw the car is in there as well).

However I have a specific question to this group: I need to look for a new place, and, not knowing whether I'll return to Canada or not, it will be still renting for a few years. I am quite flexible - need an airport within half an hour, need high speed internet, and need some garden space (meaning a house) to balance the many many hours of intercontinental flying and computer screen time (I am running a small French environmental IT company with an international market). I love Southern France and would like to go as rural as the other conditions allow. Sea, mountains and pretty villages nearby are not required but welcome ;-)

If you have any ideas or contacts towards this objective, please let me know. I went into a few local immobilier offices already but their main thing is selling properties, so lets just say they showed less than a passing interest in my quest ;-)

7

seconded, what with the trêve hivernale and all that...!

8

I think renting out here...not holiday lets...but longer term is fraught with problems.. very like the UK years ago where the tenant holds all the cards..and basically...you cant get them out...I wouldnt recommend it..

9

Thanks for all that info Carol.

I understand the frustrations of renting. We were on assignment some years ago and rented our main home to a very nice couple who unfortunately forgot to turn off the mains water when they went off to oz for a six week Christmas break. The day after they left there was a freeze and the pipes burst. We only found out three weeks later when a neighbour called around and saw water running out of our front door. I had to fly back from South Africa, where we were based at the time, to try and sort the mess out. I took two years to get the house back in to some reasonable shape and the hassle was unbelievable. We'd never rent our home out again. But even for a buy to let I suppose if one's not really making any money out of the rental (and with quite a bit of hassle) and with not too much capital appreciation in the current market it's not worth bothering.

10

ha..No...metres John! sorry...not concentrating...the flat is two double bedrooms/two bathrooms, large open plan sitting/kitche/dining... patio balcony off bedroom one and large balcony off sitting room, air conditioning/reverse heating...upstairs to a landing with space for a camp bed...and door to a large roof terrace (30ft x 12 ft)...views of the sea and mountains...gated...named parking space...and swimming pool with sunbathing area and sunbeds......rented out from 300 to 800 euros a week depending on season.

Only been doing this for two years...last year probably around 25 - 35 weeks booked...our first year...this year...less weeks booked but that seems normal this year...everyone down on bookings... Electricity a big problem..some people...no matter what you say, will turn air con on...and leave it all day and all night. We have refused winter lets...when people want all inclusive...as I am terrified they will have the heating on all the time and it will end up costing us. We pay French tax on our apartment lets...and the running costs are huge...the normal costs we pay yearly for maintenance and cleaning of common areas/pools/garden upkeep... the normal tax habit/fonc....and of course handover costs weekly for cleaning/bed changes etc....the lets cover the cost of keeping the apartment...I wouldnt say there is much profit in it. Plus we have had our share of charmers...3 young men who played their music so loud we had phone complaints from the commune...they broke various bits in the flat...smoked and left fag ends everywhere...someone who said there were crumbs on the stairs and a spiders web in the lounge and wanted their 1600 euros back in full for that inconvenience... and a lovely family with butter fingers...who managed to drop my lovely hand blown glass water jug, several glasses...a couple of plates..so the dinner service doesnt match now...grrrh......

Wouldnt recommend it unless you are very close and can pop in...ie...less than 10 miles from where you live...and you can cope with people who dont care about your property...we are going to stop letting it as soon as we sell the main house here...and can then use the flat again just for us.

11

Carol,

We may be interested in a buy to let to generate a bit of income. What sort of return on investment does the apartment give you per annum after all expenses ? Did you really mean 165sqft? Why did yoiu choose St. Cyprien?

12

2500€ a month would be the answer to my dreams, i toured France for 30 years wanting to move to the Aude but as prices went up the houses became out of reach we finally moved to the Tarn no regregts no more bites from insects than i got living in rural Staffordshire, i asked the same question many times how much would i need, the answers that came back ranged from 900€ a month to over 3000€, your life style is the key what do you want from life eating out every night or once a month the opera ,shows, expensive designer labels, your choice though i suppose no rent or mortgage does play a big part in our finances we eat well perhaps to well with wine, we grow what we can, two of us with 4 old english sheepdogs and our goats, all animal feed we buy from the uk even with transport i still save nearly 1000€ a year there are poeple i know of living on a shoe string of less than 900€ a month but 15000€ a year in a rural area is ok

13

Hi Martin,

Think your budget is fine as long as your rental income is assured or you have a lump sum set aside for "rainy" days. You cannot borrow against property owned here (equity release) like you can in UK, but can borrow to make repayments up to 33% of your income per month.

Regarding health insurance you will be covered by UK for first year or 2 and then you have to buy 100% private insurance until you can have to join CMU (after 5 years of residency I believe). Not sure if your figures are based on this. Because as your income is exclusively from rentals you are classed as "inactif". You pay 8% of your rental income to join CMU (after deductions) that is over about 10k euros. That's normal state cover and then you need to look at cost of top up cover.

This accountant we found to be very helpful and well-informed. May be worth contacting them regarding your social charges query because another 15% off your income will be painful although some is then offset the following year against income tax paid.

http://www.charleshamer.co.uk/French_property_rental_tax_returns.aspx

We are owners of rental property here in France and it's always a challenge because we don't fit in any of the french "boxes" because it's our sole income. We're too young to be retired but not seeking work either. If we can help on any aspect of surviving in France on rental income, get in touch.

Cheers

14

Hi Martin - not Andrew, sorry about that....just another thought, it'll also be interesting to see what is going to happen when (well, that is what 'they' forecast) Francois Hollande will be in the winnig seat, lots of things will change over the years to come - they forecast that the cost of property in France could drop as much as up to 40% over the next 5-10 years....(recent Thelegraph article)....

Still, good luch whatever you decide.... :)

15

Hi Andrew -

You do not mention where you are planning to live, which could make all the difference to the cost of living - it worries me a bit, as that sounds like you do not know France that well! It takes time to get to know a new country, and to find the right area....holidays here and there might help you, but not just a few, and you can be very coloured by holidays, but it's when it's grey and cold you will know if you are happy with your move! We have had holidays in various places in the south over a good 10 years, which is a long time I know, and I know you're thinking to do the move a lot sooner thatn that. We now have a place in Provence (we're in Bouches-du-Rhone, but very near the border to the Vaucluse region) which we love and we have not regretted buying for one minute, but we still have a foot in the UK, which we are not likely ever to give up as we have a daughter there! Provence has itsmixture of mild and cold winters, but we have long warm summers, which is a combination we like....

With regards to the BLTs, if you move across the channel I hope you have a good agent or family member(s) that will look after this/these for you, or even better live in this/these, as you will still have responsibilities in the UK - and we have one such, and will be selling up some time later this year for that very same reason - as we do not want the responsibioity any more, but it will not give us masses of money!

It's a major step to move to a new country - so why not rent in the beginning, it would also give you the freedom, ie if France did not turn out as you and your family had hoped/planned, you do not have to worry about selling, which in France can take an awful long time! We know people who cannot afford to move back on the UK, and have regretted not having had held on to just a little spot in the UK! We still see properties that after a few years on the market, still have not sold.

Do you/your partner speak the language - or can you get by? If you choose to live in the north of France the weather is likely to be like the weather in the UK, so the futher south you move the weather is going to be warmer for longer, however, we all want different things, and France is a big country, so lots of possibilities - and we love it!

Have a good seach region by region, there is soooo much information on various websites, and I'm sure there might be someone on this website that happens to be in or near the place you might eventually choose to move to, and that would hopefully help you and yours....

Whatever you decide - we wish you good luck....

16

As everyone is saying...area is everything...its so relevant where you decide to hang up your hat as to what you will pay. We for instance, thought about renting out our large 5 bed converted barn...3000 sqft with an acre and a half...2 baths etc....we were told we would get between 600 and 750 euros a month, its on the border of the southern Dordogne and Lot en Garonne.. whereas we rent out our holiday apartment in St Cyprien in the languedoc...ok..so its a gated property, parking space and available pool...but at 165 sqft...a trifle smaller (2bed/2bath) and we get between 300 and 800 euros a week depending on season. You will find it more expensive to rent out a property in holiday areas...owners aware they can get more for short term holiday rentals...but think you are absolutely right to rent first...you may find its your second or third area is the one that is for you...

17

You asked about tax.

COMPLEX and dependant on so many factors.

Buy a book.

Study the book and identify your taxable situation.

There may be some job vacancies in the city. I am in the countryside

and occassionaly there is a request for a chambermaid or help with the

harvesting of grapes.

If you are especially good at something and there is a small gap in the market then

there could be an opportunity to turn your attention to this to help create an income.

Many people here become adaptable. They grow some of their food and they exchange

cherries for leaks...

I can tell you now that if you come without funds and the rellevant skills ....prepare for

a very difficult time.

If a stranger enters UK they will find that they will have enough help in every direction...including a place to live, food to eat and medical attention.

France has a different arrangement.

As far as I can see/tell after more than four years here one pays their own

pay untill such time they have proved themselves worthy of help....IN other

words contributing to the up keep of the country and the medical system.

As hard as it is not getting any hand outs it is probably not a bad idea?

18

Hi, just an add on . i live in Brittany, on the coast? ie Paimpol, 8000 population, 30 mins from st brieuc, good sized town. i think renting is a good first choice, just to get the feel of a place and one's needs. 700, 800 euros around here even nearer larger towns offers a comfortable houseand garden, , taxe d'habitation is lesss than that but really depends on the commune.I agee with the previous comment, Barbara, come here with skills to offer, i have had my own buisness here for 10 years (lives here for 18)and found my nook, not always easy.

ps . no mossies

19

Hi Martin,

We have just moved into our rented property 2 weeks ago in Herault in the Languedoc. It's in a little commune in a beautiful valley. We are 15 mins from a large town (Lodeve), 30 miles to the med and half hour to Montpellier. We pay 800 per month for a T4 Villa (3 bedrooms),garage, nice terrace and 800m2 garden. We decided it was best for us to rent first to make sure we liked the area before deciding to buy somewhere, (hopefully next year).

Good Luck, Corinne :-)

20

Hi Martin, no not lots but at the moment there are 3 couples that I know of that are trying to sell their houses. Since I have been here (nearly 4 years) about 5 couples have gone back. Some feel that they cant sell their house even though they weren't going to..if that makes sense!!