French Property Finance Specialist
Discussion
Whilst I enjoy living in France, driving on great roads, quaffing inexpensive good quality wine, and having plenty of space, I cannot imagine many places that could be worse for a large scale property development project.
Very high labour costs and material costs, different regs to get your head around, prices at best stable but probably falling, high selling costs and high buying costs............
Very high labour costs and material costs, different regs to get your head around, prices at best stable but probably falling, high selling costs and high buying costs............
Thanks guys. The project is not large scale...in fact only two houses. Understand the advise ref' current government, costs et al. The properties are special homes in a particular area...hence wanting to discuss with a specialist who knows the french system. I'm aware of the tax breaks available with new property particularly with environmental design and build. Its the project funding options info' I'm looking for. One property to be sold on completion, the other to keep.
You will not be looked on kindly in France for trying to make some money, especially from property development and you will be regarded as profiteering scum by the government and taxed accordingly. As others have said there it's unlikely that there would be any money in it at the end unless the properties are extremely high value and near a major conurbation (Paris/Nice/Cannes/Monaco).
As above , I built my own house over the last 6 years in the dordogne , and I mean built it myself , only outside contractor was an electrician who charged 3 times as much as he should ! I even drew the plans and spec , though I'm lead to believe its stricter now , if I sold and paid the tax I would probably do well to break even .
Better off buy a renovation or even more sense , one already done .
Last time I checked you get no tax relief for 5 years and then it's a sliding scale over 10 , though I am led to believe it's changed again , and the notiare does the tax calculation and takes it before you see it , at least that's what happened on my first french project .
Don't take this the wrong way , but I wouldn't have even considered building over there if I had to borrow funds and pay for labour .
Good luck on whatever you decide though , it's a great place but I guess you already know that .
Better off buy a renovation or even more sense , one already done .
Last time I checked you get no tax relief for 5 years and then it's a sliding scale over 10 , though I am led to believe it's changed again , and the notiare does the tax calculation and takes it before you see it , at least that's what happened on my first french project .
Don't take this the wrong way , but I wouldn't have even considered building over there if I had to borrow funds and pay for labour .
Good luck on whatever you decide though , it's a great place but I guess you already know that .
I built 4 houses in 2005, finance does not really require a specialist, I just took out a 10 year mortgage with CA and paid it off when I eventually moved out, overdrafts seem to be way beyond the norm for individuals, but you do not want to be a company here.
I think that selling within 5 years is the biggest problem as you pay VAT on any gains, you are regarded as an enterprise. I doubt that you could make the numbers stack up to turn a half decent profit. It is simply a dirty word so no one anticipates that you might want to make one. Renting out the second property for a few years may more appropriate, but even then you become subject to tax on any capital gains as determined by the notaries so you have to be meticulous with your paperwork. Doing work yourself just boosts the capital gain as you have no paperwork.
I think that the sort of schemes you refer to are done through registered companies who are actually developers. A sort of reverse time share scheme.
I think that selling within 5 years is the biggest problem as you pay VAT on any gains, you are regarded as an enterprise. I doubt that you could make the numbers stack up to turn a half decent profit. It is simply a dirty word so no one anticipates that you might want to make one. Renting out the second property for a few years may more appropriate, but even then you become subject to tax on any capital gains as determined by the notaries so you have to be meticulous with your paperwork. Doing work yourself just boosts the capital gain as you have no paperwork.
I think that the sort of schemes you refer to are done through registered companies who are actually developers. A sort of reverse time share scheme.
Bear in mind that there is a new law that has already been voted that will cap the rent allowed per square metre. It is intended to address the probelm of "les vendeurs de sommeil", essentially profiteering landlords. It is due to come into force in September and will potentially screw with the buy to let market and thus returns on investment and property values. Ask me how I know....
Also, for none French residents, the basic tax on rental income has been put up to 36%. Again, ask me how I know.....
Also, for none French residents, the basic tax on rental income has been put up to 36%. Again, ask me how I know.....
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