Brexit Vs Your French Property Dream
Many people in Britain dream of buying a second home in France or look forward to retiring to France. A lucky 5000 UK citizens every year take the plunge and set off to France to enjoy its relaxed way of life. Since the UK voted to leave the EU many people have however now been left wondering whether they should take steps to realise this dream or not.
Has Brexit put off many UK property buyers in France?
It is fair to say that the UK EU referendum result was a shock to most. Following the initial shock of the Brexit vote, it was clear that many buyers put their purchase plans on hold whilst they waited for the dust to settle. Over the last month we have however seen a steady return of people making enquiries relating to buying a property in France as many believe that not much will change and refuse to let the Brexit vote spoil their dreams.
There are many different opinions from experts on both sides of the channel on how the split will play out. Although no one really knows, generally, the experts agree on a few points on how Brexit will affect brits buying and living in France.
Can I still buy a house in France following Brexit?
Nothing with change in any event until 2 years after the UK give the formal notice to the EU of their intention to leave (i.e. invoke article 50). Until then it is therefore business as usual and there is nothing to prevent someone from the UK buying a property or living in France.
Even after this 2 year period, experts believe very little change. People from all over the world buy property in France without being part of an EU country and they are able to have second homes or retirement there without difficulty.
Will the effect of France’s property tax’s and inheritance laws on Brits change?
Brexit does not directly affect the inheritance tax and capital gains taxes charged in relation to Brits who own properties in France. This is because there are tax treaties between the UK and France which were negotiated entirely independently of the EU so will still be in force regardless of whether the UK is in the EU or not.
Working in France
Experts find this the most difficult to answer. Due to a similar amount of French nationals living and working in the UK, particularly London, (Boris Johnson called London France’s sixth largest city!) as that of English nationals living in France, it anticipated that there will be a reciprocal agreement between the two countries to allow workers from the UK in France and vice versa.
With similar numbers of French and English nationals living and holidaying in each others country it is most likely that a reciprocal agreement will be put in the place. For people who have concerns it might be worth looking into private healthcare.
Will it cost me more to buy a house in France with the decrease in the exchange rate
It depends when you are comparing exchange rates. Back in December 2008 you only got 1.03 euros to the pound at which time you would have been ecstatic to get a today’s rate of 1.18.
But if you look back to the great exchange rate back in July 2015 of 1.44 you maybe be disappointed as it will get around 20% less for your money.
A foreign property however is a long term investment and the exchange rate will inevitably go up and down numerous times during your ownership (it changes every second in fact!).
What is important is to make sure that you can afford the property and when you need to exchange currency you use a currency specialist to get the best exchange rate possible at the time and use the right strategies to reduce the affect of adverse currency fluctuation during the purchase process.
Should I still buy in France after Brexit?
It’s a personal decision but many buyers we have spoken to are returning to their French property plans. For the time being it is business as usual and for the next 2 years at least Brits can freely buy property in France without any additional formalities or hoops to jump through. Many predict that not much will change in any event and feel that waiting to see what may or may not happen will take 2, 5 or 10 years to iron out.
What is known for certain is that France still has great value properties compared with the UK, fantastic culture, spectacular scenery and fabulous food (and wine!) making it one of the best countries to own a second home or retire to.
Article published: September 14, 2016