If you are going to invest in a house in France, you have a number of reasons for doing so. You want more free time in your life. Or you want to divide your office time hours and make France your second home workplace. Or you want to buy a house for the whole family so you can spend more time together. Or you have waited so long to fulfil that dream that you have decided it is now time to make things happen before it’s too late. The fact that you read this article now, might even be a sign of Kairos time.
Time is money in 2022. Here’s to make more of both.
In all cases, you are welcome to use our services. We will be happy to make time for you by making a pre-selection, organising the viewings with various estate agents and ultimately guiding you through the purchase.
Paris on the Côte d’Azur
The situation in the South of France is comparable to the situation in Paris; you see an apartment in Paris for sale, you blink your eyes and it is already sold. Sometimes people don’t believe us when we say that the house has been sold within a week. Especially searching for a property for sale on the Côte d’Azur, the supply of nearly perfect houses is scarce and the demand remains high. It is clearly a seller’s market and that means that planned budgets sometimes have to be adjusted by up to 20%. The year 2021 is registered by many estate agents as a record year with many transactions.
The negative interest rates at banks encourage more people to use their savings for a nice investment in the Côte d’Azur. Many buyers also flee the strict controls in their own country. France is strict on paper but the reality is a lot milder. Mayors determine the ultimate executive power. And southern French mayors do not like police checks in restaurants at all. So that is not what happens. A restaurant in France is sacred ground! Plus, we all know that every crisis always comes to an end.
Extra budget needed
If you want to spend a maximum of 1 million but you can’t find what you like, try to look one budget level higher. You may be able to borrow the financial difference at low interest. Or you can choose to rent out your second home in France during the summer months in the first year to recoup the extra expense. Sometimes, you need to be creative to get what you want. If it was easy, everybody would be living here.
The rental season runs from April to October with a few more weeks in December during the Holidays. A luxury villa in Mougins in the region of 2.5 million brings in a whopping 125,000 euros a year in rental income. And meanwhile, the value of your property continues to rise. If the market is too expensive (and it looks like it will remain so), there is another way to make a financial profit: buying a new property.
20% VAT advantage
New build construction is even more interesting for renting: you have no maintenance and people like to stay in a new flat. Every year new projects come onto the market where you can reclaim the 20% VAT thanks to the LMNP law. On a 600,000 euro flat, the French tax authorities will reimburse you 120,000 euro immediately without any problems.
There are of course a number of conditions attached to this gesture: you sign an agreement with a para-hotelier service, you place your property on the short-season rental market for 20 years and you invoice each tenant for an additional 10% VAT. In this way, the French state kills two birds with one stone; the shortfall on the rental market is made up and extra VAT income flows back into the French coffers. A local French accountant will help you with the application procedure and the annual declaration for around €1000 per year.
Making an offer
If you found your dream home under the sun, you want to make an offer. But make sure that before you schedule the visits and make an offer, you are financially ready to buy. Talk to your bank in advance so that you can decide quickly. Because a buyer without reservation of financing is always preferred. Time is money, now more than ever.
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