Why Invest in France
Buying property in France has always been a good investment due in part to a stable economy and sound social environment and it’s not too far to travel for UK and Irish citizens.
The south of France is a haven that continues to make property here popular with buyers.
International mortgage providers activity lend on properties in France, making it easy to raise finance for a French purchase
Strong tourist market as France is one of the World’s most visited country
Long term residential property price growth of circa 10% p.a.
Strong stable property market
The French government’s tight control of urban development means that property developments in Languedoc will not one day lose their value due to over-building or the erosion of local culture
Within a short distance of the main countries of Europe
Favourable investment environment with attractive tax breaks
Excellent modern transportation infrastructure and links with mainland Europe
The Languedoc region is booming, with more people moving there than any other region in France
Capital gains tax on property now halved to 16% to encourage foreign investment
Net yields in the region of 7%-10%
Ever increasing inward and overseas investment
Varied climate, ideal for your chosen activity
Property values, which are still low in comparison to Provence, are rising faster than any other French region
Excellent roads – the A9 coastal motorway is being doubled in width, and the new A75 motorway means that there are now three major routes to the Languedoc region.
Accessibility – budget flights to the region continue to soar, with flights to Montpellier, Nimes, Carcassone, Perpignan, and soon, Beziers
Excellent train links – the new TGV line from Barcelona will bring even more wealthy visitors and property investors from northern Spain
Larger beaches coupled with access to the Pyrenees and Cevennes mountains, make Languedoc the perfect place to invest in a second home as it can be used in winter and summer. Many appreciate the ski + sea + sun combination and the fact that they can get all of this in Languedoc for less money than property on the Cote d’Azur
Wine production – Languedoc is officially the world’s single largest wine producing region, and its wine makers constantly strive to improve the already excellent quality of their vintages
Direct flying time to UK from UK and Ireland is 1 ½ to 2 hours
A visa is not required to enter France and you can stay for an unlimited period if you are from an EU country and hold a passport (valid for at least 3 months beyond your length of stay) or ID card. However, if you are from Australia, Canada or the USA and intend to stay for a period longer than 90 days, you will need to apply to your nearest Embassy for the necessary documentation.
New build property located in developments in Languedoc can easily be rented out as tourist numbers to the region continue to increase
Culture and Language
Every square metre of ground bears the imprints of this hallowed region. Today, however, the ancient and the modern co-exist side by side. Fortunately, the modern seldom impinges upon the architectural history of the millennia. Memorable places like the Gorges de l’Aude, Gorges de l’Herault, Gorges de la Ceze and the creeks and caves of the Cote Vermeille preserve their ancient villages intact. Whilst the official language is French, it is spoken with a heavy Catalan accent being so close to Spain
Working in France
As France is a member of the EU, if you’re a British citizen, you don’t need a permit to work for most jobs.
Schools
Whether you’re planning to integrate children into the French state system or looking for an international or bilingual school, there are a number of options open to you. Although private schools exist in France, the French state school system is widely seen as one of the best in Europe.
Climate
With around 300 days of sunshine per year, the Languedoc climate is similar to the Mediterranean. Summers are hot and dry and winters tend to be rainy giving the region a lush green landscape. Autumns and springs are moderate and calm. After Corsica, the Languedoc region is the hottest in France and is home to Eus, the sunniest town in the whole country.
The coastal plains of the Languedoc rarely freeze in winter due to the influence of the Mediterranean Sea. Summer temperatures are frequently in the eighties (30 º) and the days are long and dry. Generally, the coastline, sheltered by mountains, is a few degrees cooler in winter and a few degrees warmer in summer, compared to inland.
Getting to Languedoc
Languedoc is the most accessible region in France to fly into. There are four airports within the Languedoc and another three just outside. Flights are available from most areas of the UK and Ireland. These seven airports include Carcassone, Montpellier, Nimes, Perpignan, Toulouse, Avignon, and Marseille to the east. Flight time is around one and a half hours. If you drive from Calais, it will take approximately 10 hours if using the auto-routes.
Healthcare in France
French public healthcare is amongst the best in Europe, if not the world. If you are below retirement age, you are covered for emergency treatment under the European Health Insurance Card (which replaces the old E111) and also for non-emergency for a period of two years.
After 5 years as a resident you are entitled to all healthcare. After two years in the country, you would not be covered for non-emergency treatment unless you went privately or have private health insurance in place. Over retirement age, all healthcare is covered by a reciprocal arrangement with the British government.
French food and drink
In a place with so much diversity, there are many different foods and traditions. The palette of flavours grows a little wider every step of the way, from local home-grown products to traditional recipes and dishes by renowned creative chefs.
The products of Languedoc-Roussillon come from an area stretching from the coast to the mountains. At the seaside, shellfish platters heaped with oysters, mussels and clams delight the taste buds. So do the countless Mediterranean fish sought-after for their flavour, including tuna, bream and sea bass.
Vines are everywhere
Vines are everywhere in the region where growing wine grapes is a passion and a tradition. Languedoc wines are the largest contributor to France which still leads the world in wine production. A huge variety of reds, whites and roses are found everywhere you travel in the Languedoc. It seems impossible to drive for more than a few yards without seeing a vineyard, a cave co-operative, or just a small producer selling his own wine from a garage next door to his house.
Wine is often drunk with lunch and dinner throughout the region, with good local wines costing less than lemonade or Coca Cola. Go into any supermarket and you’ll find a good selection of well regarded local wines for around 3 or 4 euros a bottle. But part of the joy of discovering the Languedoc wines is to see where they come from and how they are made.
To give you an idea of the scale of wine production, there are over 50,000 wine growers producing on over 400,000 acres. Some of the more famous brands include Merlot, Cabernet Sauvignon, and Chardonnay.
It is normal to taste a wine before buying in Languedoc. Wine tasting in Languedoc is a relaxed affair. Unlike other areas, there is normally no charge and no-one is upset if you don’t buy
Buying property in France
The purchase process in France depends on whether you are buying a resale property or a new build property.
Buying a new build property in France
Option: Once you have decided to purchase your chosen property, we will take an option for you on that property. Depending on the development, an option is usually valid for up to 48 or 72 hours.
Reservation contract: During that time we will complete and send you the reservation contract, together with clear instructions. The property price, layout, delivery date and staged payments as well as your mortgage requirements are included in the reservation contract. This is a legally binding document which means that the property is taken off the market and the price will not be changed.
Reservation deposit: At this stage, you also pay the deposit on the property, usually 5% of the purchase price, to an account set up by the Notaire (the French notary overseeing the purchase process). It is held in the account until the sale is completed. Please note that the legal currency in France is the Euro and properties are therefore bought in Euro. We can help you to ensure you benefit from excellent exchange rates, no commission, no bank receipt charges and protection against fluctuating exchange rates.
Cooling off period: Once the reservation contract is counter-signed by the developer, there is a 7 day cooling off period. If you decide not to proceed with the purchase during this period, you should inform the developer by registered post.
Legal advice: During the purchase process, it is important that you obtain advice from a bilingual adviser qualified in French law. The adviser should liaise with the notaire on your behalf especially with regard to inheritance law and the content of the final contract. We can provide you with a list of independent, qualified, experienced and bilingual legal advisers.
Completion: Completion of the purchase usually takes 3 to 4 months. During that time the Notaire draws up the Acte de Vente (final contract). On the day of completion, you can attend the Notaire’s office with the developer to sign the final contract. Alternatively you can arrange a Power of Attorney through your legal adviser. Notaire’s fees (about 3 to 4%) are paid at this stage. The property is officially yours when the Acte de Vente has been signed.
Staged payments: most new build properties are bought off plan and the purchase is often completed up to a year before the property is delivered. The balance on the property price is paid in stages until the keys of the property are delivered to you.
Buying a resale property in France
The compromis de vente: when you have decided which property to purchase, you and the vendor sign a Compromis de Vente (reservation contract). This is a legally binding document which means that the property is taken off the market and the price cannot be changed. Items such as price of the property, fees, lead/asbestos/termites report (where applicable), planning permission and mortgage requirements are included in the document. A copy of your passport, birth and marriage certificates will be required to draw up the “Compromis de Vente”.
Deposit: At this stage, you also pay the deposit on the property, usually 10% of the purchase price, to an account set up by the Notaire (the French notary overseeing the purchase process). It is held in the account until the sale is completed. Please note that the legal currency in France is the Euro and properties are therefore bought in Euro. We can help you to ensure you benefit from excellent exchange rates, no commission and no bank receipt charges.
Cooling off period: Once the compromise has been signed, there is 7 day cooling off period. If you decide not to proceed with the purchase during this period, you must inform the agent/vendor in writing by registered post.
Legal advice: During the purchase process, it is important that you obtain advice from a bilingual adviser qualified in French law. The adviser should liaise with the notaire on your behalf especially with regard to inheritance law and the content of the final contract. We can provide you with a list of independent, qualified, experienced and bilingual legal advisers.
Completion: completion of the purchase takes about 3 months, during which time the Notaire conduct s searches and draws up the Acte de Vente, which is the final contract. The balance on the property price and the notaire’s fees (about 7 to 8% including transfer tax) have to be transferred to the Notaire’s account in time for completion. On the day of completion, you can attend the Notaire’s office with the vendor to sign the Acte de Vente. Alternatively you can arrange a Power of Attorney through your legal adviser. The property is officially yours when the Acte de Vente has been signed!
What is the French leaseback scheme - Languedoc Rousillon, France
The term ‘leaseback’ is slightly misleading when describing the French leaseback scheme. What is known as the ‘French leaseback scheme’ refers mainly to two types of residence known is France as ‘quasi-hotelier’ and ‘residence tourisme’. But where does it come from and how does it work?
As shown by the official 2007 report from the World tourism Organisation (UNWTO), France is still the numner one tourism destination in the world. Official figures for the top five tourist spots for 2006 were
France 79 million
Spain 58.5 million
USA 51 million
China 49.5 million
Italy 41.1 million
Introduced over 20 years ago by the French government, the leaseback scheme is an incentive offered to investors in order for the French economy to meet the needs for tourist accommodation. As tourism figures keep increasing (4.2% per annum in 2006 alone) so does the need for accommodation.
French leaseback development has to be located in a holiday or urban area where there is a need for leisure or business tourism accommodation. There is a rental management company on site which finds holiday makers or business visitors and provides services such as reception, household linen, cleaning, etc.
Leasebacks work in a very simple way.
you buy an apartment, and then simply agree to, 'lease it back' to an on-site management company, for year round rentals (you buy it freehold, so you own the apartment from day one). The management company is already appointed for the development, and everything is administered for you from the outset.
it is leased back for a fixed period, normally between 9-11 years, after which you can either: exit the lease or renew it with the management company. At this point you should be able to negotiate your rents upwards. Terms of the leaseback scheme, rental income, personal use and facilities vary from development to development: the rental income may be guaranteed or flexible and the level of personal use may be up to 6 months per annum.
in return for allowing them to market it for year round rentals, the management company will pay you a guaranteed yield (guaranteed rental), normally around 5-6% of the price paid for the apartment. This will increase periodically in line with the INSEE Cost of Construction index, published by the French government.
as an extra bonus, if you buy a new build apartment (off plan), the government will waive the VAT for you. This is a huge saving as VAT in France is 19.6%.
For example, the price of your apartment is 100,000 euros, the VAT saving means that you only pay 83,612 euros. That means that you buy at 16,388 euros below market value, and in effect means 16,388 euros instant equity. Since 2007, the introduction of a new tax law ()CGI article 257) means that you do not have to pay back any of the VAT as long as the new owner takes over the remainder of your rentral agreement. This makes the process of reselling your property even easier and enables you to sell at an attractive price.
usually (subject to status) 80% funding is available, and all mortgages on a leaseback are repayment mortgages. This means that, over the years, both the capital, and the interest will be paid. The benefit is that at the end of the term, the loan will be fully repaid and the profits yours to keep.
in addition to this, you can benefit from zero capital gains, so 100% of the profits will be yours to keep
So, to summarize, the French leaseback scheme can be a safe long term investment which offers a turnkey and no maintenance property, a huge discount on its purchase price, hassle-free rental income as well as personal use of your property. Most rental companies now also offer an exchange programme whereby you can decide to spend your personal use in any of their other developments, regardless of where your own property is located. This means you can buy a property on the coast and spend a few weeks in your property, another few weeks in a ski resort and another few weeks in the countryside should you wish to do so. All this in a country which is quickly and easily accessible by train, ferry or plane and offers a unique variety of landscapes and activities, not to mention wonderful food and wines, warms seas and plenty of sun.
