Creme de Languedoc
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Good reasons for Irish investors to buy French property

 

The Sunday Times recently published a French property buying supplement for Ireland, and asked Crème de Languedoc for our input.

So we thought it might be of interest for Crème de Languedoc readers thinking of making a Languedoc property purchase to see what we’d said to the Sunday Times. Here it is, in a nutshell:

If growing numbers of Irish house hunters are looking to France, and the south in particular, they have good reason. The country is extremely accessible, thanks to low-cost airlines and a plethora of rail, road and ferry routes, but it is also one of the most popular holiday destinations in the world (some 70 million visitors came to France in 2006).

Given the current lack of accommodation in the tourist hot spots, investing in property is an ideal way to secure guaranteed rental yields – something that appeals to Irish hearts and minds.

Several years ago, the French government introduced leaseback schemes, offering lower guaranteed rental income in locations where they were keen to attract tourism (e.g. coastal and mountain resorts); buying via leaseback offers steady, reliable earnings over a set period (typically 9–11 years).

Then there’s capital growth potential; trading in French property can be profitable, particularly if you purchase off-plan and sell on when the market has risen (capital gains of 15% over a 12-24 month period are not unusual).

In addition to this, the price of French bricks and mortar is very reasonable compared with the RoI, so all things considered, France makes a good bet. Serious investors can reap capital gains, while holiday or retirement home buyers can relax in the knowledge that their assets are accumulating while they use them.

For maximum returns and minimal hassle, buyers should choose a small development with an assigned management company - ideal if you want a second home without the trouble of looking after the garden, irrigation or swimming pool.

The ‘lock-up and leave’ culture of new build homes on managed developments is a favourite among investors who don’t have the time, or the desire, to spend their holiday carrying out general DIY and garden maintenance, and who want the security of knowing holiday lets will be trouble-free.

There are of course tax implications associated with French home ownership. Capital gains tax (impôt sur les plus-values) is payable on the profit made on the sale of a second home in France, up to 15 years after purchase; as a non-resident EU citizen you will be taxed at 16%.

It pays to know that the main difference between property purchasing in France and Ireland is the role of the notaire. As a public official, (s)he is entitled to be both involved in the sale and oversee its probity, checking the deeds and both parties’ rights to sell and buy. However, the notaire is not a solicitor, and cannot represent your best interests as the buyer; for this reason, always take independent legal advice.

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