So you’ve decided to make that long-awaited move to France, and all you need to do now is find the right property. Easier said than done is probably what many of you will be thinking, especially those who have spent many an hour trawling websites searching for ‘The One’. There is an almost overwhelming number of re-sale properties to choose from, whether you’re looking for a tumbledown ruin in need of some TLC or a no-work-required family home. And then of course in France there’s the leaseback option to add into the mix too. Or why not build your own if you can’t find exactly what you want? There’s certainly no shortage of options for finding your dream home across the Channel, and it’s worth keeping all of them in mind.
The leaseback scheme
The French leaseback scheme is a government initiative which was established in the 1980s to encourage and promote both investment and tourism in France. A national scheme overseen by the French ministry of tourism, it offers the assurance of government-regulated contracts and financially bonded developers. Under the leaseback scheme, a buyer purchases a property and agrees to lease it back to a holiday management company for year-round rental. The company offers them a guaranteed rental income for the term of the lease, which is typically nine years, and this can be renewed once the term of the lease comes to an end. The return is typically 3-5% of the initial asking price, and the rent is paid by the management company irrespective of whether the property is occupied or not.
Owners are allowed a certain amount of personal occupancy each year as part of the leaseback agreement. Upkeep will also be arranged and paid for by the management company, which further adds to the attraction of the scheme as there are no ongoing maintenance and running charges. As an additional incentive, the French government also refunds the 19.6% VAT included in the asking price to the purchaser. Not to be confused with timeshare, buyers purchase the property and thus own the freehold when buying under the leaseback scheme.
“Leaseback properties are much easier to manage than a ‘normal’ re-sale property, especially when living abroad,” says Fran�ois Marchand of Erna Low. “For buyers looking for an investment in a popular tourist destination who wish to occupy their property but also rent it out, a leaseback purchase is attractive as it is pretty much hassle-free and has very few costs associated with the upkeep and management.”
Leaseback developments have the added advantage of a wide range of on-site facilities too. “The r�sidences de tourisme come with superb facilities such as swimming pools, gyms and saunas,” comments Richard Deans, of MGM French Properties. “They are also very well located, which they have to be to ensure rental appeal.” At the beginning of the year, MGM reported a large increase in sales of leaseback properties to UK buyers, and this trend appears to be continuing. “We had a very good start to the year, and sales are up by about 50% on last year to date,” says Richard.
It has been possible for some years now to put a leaseback property into a self-invested personal pension (SIPP), an option which has been very popular with investors seeking to profit from France’s position as the most popular tourist destination by purchasing property here. Buying a leaseback property and placing it in a SIPP allows an investor to profit not only from the substantial tax advantages offered by this type of pension, but also the tax incentives offered by the French government to encourage the purchasing of property for tourism purposes under the leaseback scheme. (For further information on SIPPs see David Anderson’s article on page 32.)
If you’re not sure your DIY skills will pass muster and would prefer to buy a brand new home, then a new-build property might be the option for you. New-builds can come in all shapes and sizes, from a single house to a small number of luxury villas to a large-scale development of 100 apartments. In most cases, the development will not have been completed or perhaps not even started, so you will be buying off-plan, and often buyers can have a say when it comes to the layout and internal finishes. New-build property in France typically does not include a fitted kitchen, which is something to be aware of so that there are no unexpected surprises in store.
“New-build property is ideal for buyers who are buying from far away,” says Emmanuelle Constant of Sunny French Property. “The developer supervises the work so there are no expensive and time-consuming comings and goings to France. Your property is being built while you are doing something else, somewhere else.”
There are financial advantages to buying a new-build property too, such as stage payments, no estate agent’s fees and lower notaire fees than for a re-sale property. Maintenance costs should be lower too, and there are legal guarantees associated with buying off-plan which provide peace of mind.
“As you are buying something off-plan and thus something that doesn’t exist yet, you may be concerned that it won’t reach completion,” comments Emmanuelle. “However this is covered in the garantie financi�re d’ach�vement, which is a compulsory guarantee for every property development. This ensures that your money will be refunded to you should the building not be completed.” Buying off-plan is usually a two-stage contract process. A contrat de r�servation (preliminary contract) is signed before you enter into the final vente en l’�tat futur d’ach�vement (VEFA) contract.
For those who are conscious of their carbon footprint, the majority of leaseback and new-build developments now place great emphasis on the use of environmentally friendly building techniques and features. Many strive to meet B�timent Basse Consommation standards, which signify that they are low-energy-consumption buildings. MGM, for example, is building the first eco-village in the French Alps, where properties will be heated with an innovative new boiler fuelled by wood pellets and the whole resort will be pedestrianised.
The Villages Group, a developer bringing the concept of active living villages for the over-50s to France, is keen to maximise low emissions and minimise the effect their buildings have on the local environment. “Our houses are designed to have a small carbon footprint,” says managing director Danny Silver. “Every one of our homes is created from recycled steel. Six motor vehicles are scrapped and melted down for the steel to create just one house. Solar thermal collectors provide a virtually maintenance-free solution to low-cost water heating by capturing the warmth of the sun and transferring this heat into a domestic hot water system.”
Build your own
So the property fits the bill, but the location is entirely wrong. Or the location is perfect, but the house is just too small/large/needs too much work. (Delete as appropriate!) If your dream property has thus far proved to be somewhat elusive then you might want to think about having your own built. This will allow you to create a home that meets all of your specific requirements and give you much more choice.
Trying to visualise your new home while standing in front of an empty plot of land might feel somewhat daunting, but you don’t have to go it alone. Companies such as Poitou-Charentes-based New French Homes, run by Paul and Vanessa Lowrie, can guide you through the process, from finding the right plot to choosing the design of the property. They provide a large range of plans as a starting point, but many aspects of the construction and design can be modified to suit the location of a building plot and the buyer’s own requirements. The choice of materials, layout changes and environmental options are some of the ways in which you can personalise your new home. “This is not ‘off-plan’,” says Paul. “You are signing a contract to build the house you have decided on, and indeed helped to design, at a guaranteed price and within a guaranteed time, in a location of your choice.”
Brand new means modern and low maintenance, but what about the part of you that hankers after a bit of character? Well that part of you will be pleased to know that you don’t have to sacrifice period features in favour of mod-cons. With Sunny French Property, for example, you could build your own cottage with pigeonnier, or a classic maison de ma�tre, and in British favourite Dordogne to boot.
“You don’t have to compromise between the charms of traditional architecture and the requirements of modern comfort,” comments Emmanuelle Constant. “If what you like in French property is local traditional architecture, you are not obliged to buy a ruined barn for its antique looks and charms, and then make do with the antique comfort and problems that come along! You can have a brand new house with timeless charm right from the start, because there are now many building materials which offer the genuine look of old ones.”
As is the case with leaseback and new-build developments, the purchase of a custom-built property is also regulated by French law. “Last but not least comes a set of financial advantages,” continues Emmanuelle. “There is no VAT to pay on the building land but only on the building of the house, and stamp duty is payable on the building plot but not the property.”
With so many options available, the perfect French property is out there for you, no matter what type of home you’re looking for. The selection opposite should give you food for thought when considering which option is the right one for you.
Rachel and Ben Jones from Yorkshire have purchased a three-bedroom apartment in MGM’s Le Chalet Adele development in St-Martin-de-Belleville. Situated in the Belleville Valley below Les Menuires, it provides easy access to the 600 kilometres of pistes in Les Trois Vall�es ski area. After enjoying several family holidays with their three young children in the traditional Alpine village, the couple decided to buy an apartment there.
“We love the place, and when we saw an opportunity to own a home of our own in the village, we leapt at it,” says Ben. “Buying a freehold property gives us the flexibility to take holidays with family and friends at any time in the ski season or the summer, while also enabling us to cover costs by letting the property for four or five weeks each year.” Just 20 minutes from the slopes, Le Chalet Adele is due to be completed in December this year.
How to build your own
A step-by-step guide from Paul Lowrie of New French Homes
“For the French, the process of having their next home built is a very popular choice; indeed away from the major cities and towns it is the usual way to proceed. However, there are a number of things that would seem quite difficult to accomplish for any stranger to the system.
“Firstly, you need to find where you want to build. This needs to be done with the design and position of the house very much in mind. As the owner, you will be expected to liaise with the service providers and to make sure that they are able and willing to connect you. Normally this would be done at the same time as talking to a construction company about what you want built.
Ideally, you should be in a position to sign a contract when you have chosen your plot so that you can buy with full planning permission, the documentation for which will be done by the construction company. When you have bought the land you will need to finalise your choices for the build, which can then start. Usually you will pay in stages; for the foundations, roof, doors and windows and then the interior, with the final balance due on completion. It can seem a daunting task to undertake but, with the right guidance and some patience, it will certainly be worthwhile in the end!”
THE STAGES INVOLVED:
• Decide on house design
• Find plot
• Sign contract for house
• Sign ‘compromis de vente’ for land with planning permission
• Buy land
• Choose interior finishes, bathroom furniture, floors, tiles etc
• Choose kitchen
• Construction begins, nine to 12 months depending on size and complexity of design
• Foundations go down – first payment
• Walls and roof go on – second payment
• Doors and windows go in – third payment
• Interior finished – fourth payment
• Delivery of house – final payment
• Kitchen fitted
• Interior decoration
• Move in!