As the negative media headlines and political bickering about Brexit continue, many people are understandably waiting to see the lay of the land post-Brexit before pursuing their dream of a place in France.
An article in French Entrée featured how savvy investors are making the move to France now, before Britain departs the EU. There are four main reasons for their logic.
The Exchange Rate
There’s no doubt Sterling took a big hit after the Brexit vote and the exchange rate remains volatile. However, we’re now seeing a spike in people looking to spread their assets and earnings by buying a french property with an income potential that will, obviously, be in Euros. France has long been a safe, secure place to invest in bricks and mortar, and in the future could prove a real safe-haven to hedge against currency fluctuations and economic uncertainty here in the UK.
People’s search criteria have developed and are now more in favour of seeking properties with income potential, whether that be a buy-to-let, holiday rental, or a layout conducive to a gîte/B&B business. A number of buyers are also looking for property with a studio or workshop where they can run other businesses. There are likely to be many fluctuations in the exchange rate in the coming years and their plan is then to save money in Euros, and then work with foreign exchange advisors to transfer the money as and when the Stirling rates are favourable. Of course, it also provides a holiday fund for anywhere in the Eurozone without having to worry about the exchange rate.
Applying for a Mortgage in France
The current arrangement in France is that non-EU members pay higher mortgage rates and need larger deposits than EU members. The minimum deposit required for a mortgage in France for EU-citizens is around 20%. For non-EU citizens it can be up to 50%, often at higher interest rates. So, if you are thinking of using a mortgage to buy in France one day, nothing is going to change immediately but, longer term it may get more expensive.
Managing A Reduced Budget after the Fall in Exchange Rate
If you had started investigating property pre-Brexit and now find that you effectively have less money to spend on your dream property, try exploring other areas. France is a huge country with big variations in property prices. So, for example, prices are relatively high in the Dordogne and Charente, but just over the border in neighbouring Limousin, there are some real deals to be had. Similarly, in Brittany and Normandy, if you move away from the coast, you can still make the most of easy access to the ferry ports and beaches, but you can find some great properties for under €100K.
Tax Benefits of Brexit
For the majority of people, whether resident in France or the UK, Brexit will have no impact on how they are taxed. All residents in France, regardless of nationality, are taxed at the same rate. The same is true if you are a UK resident with a French source of income. The UK/France double taxation treaty is an agreement between the two countries. Therefore, it is an arrangement that is independent of the EU and will be unaffected by Brexit.
If you are thinking of moving to France to work, you may be able to take advantage of Article 155B of the French tax code, which provides special tax incentives for people coming from overseas to work in France. Macron’s new government has made no secret of the fact it wants to do everything possible to encourage expatriates and foreign executives to move to France. In January this year they extended special tax benefits for certain foreign workers for a further 8 years and the government is pro-actively promoting their open outlook to foreign workers and companies on an almost daily basis.
Regardless of Brexit, France will always be a safe place to invest in property and the unrest surrounding Brexit has created a buyers market for UK investors. This period of time before Britain exits the EU, is a window of opportunity to spread your assets whilst still making the most of current EU property purchasing arrangements.
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