French Property

Tax planning, succession laws and wills

The usual approach of joint ownership in France is that of indivision. This means that every spouse owns half the property, rather comparable to the tenants-in-popular scenario in England. If a married couple require to obtain a property together, they often need the survivor to have ownership of the property after the very first death. This will not automatically take place as the legal nature of the indivision technique means that when the 1st spouse dies, at least half their French estate should go to that person’s kids. The remaining spouse as a result does not have freedom to do with the property as he or she wishes.

There are alternative choices for tackling the inheritance and succession rules. The crucial factor to bear in mind is that you must do any planning prior to you obtain and not after. A French Notaire will be able to assist you with a French Will, effecting a ‘Clause tontine’ if applicable, or a change of matrimonial regime if applicable. Whatever you determine to do, there is likely to be an impact upon the eventual effect of the Inheritance tax scenario, so that ought to be taken into account as well.

Inheritance Tax is a lot more demanding than its equivalent in the UK. There is potentially tax paid upon initial death in France, unlike Good Britain where IHT does not impact upon married couples until the second death. Nil rate bands are a lot much less generous than in the UK, even though they have been improved in 2005. Tax can be payable at up to 60%, so unmarried couples specially ought to plan financially for a sizeable quantity of their property/estate to go to the taxman, unless proper precautions are put in location.

Those who choose to go and live in France permanently will uncover that their worldwide assets are then subject to French succession law as opposed to just the French real property. In these circumstances, it would virtually surely be worth adopting an correct marriage regime.
Yet another helpful remedy to some family situations is to set up an SCI. An SCI is a corporation set up for the management and letting of property. If the property is bought by the SCI, the members of the SCI own shares rather than property. As shares are considered to be personal property, not real property, then English succession law applies and the shares can be left in accordance with the deceased’s wishes.

Mark Russell Limousin Homes Internet: http://www.limousinhomes.com Email: info@limousinhomes.com Tel: 0033 5 55 60 44 56

People today searching for French property who are accustomed to UK estate agents’ commission of 2% or much less commonly express shock at the amounts charged by French agents. Our own flat rate of 5% might appear high: think it or not, we’re less expensive than several of our competitors. Commissions as high as 8% are common.

To realize the distinct environment of French property, you want to recognize the economic forces behind an estate agency. In essence, there are two: the drive to profit, pushing rates up; and the pressure of competition, pushing them down.

The Upward Force

Whilst the fundamental job of UK and French estate agents is the exact same, in practice they are vastly diverse.

1st, the French move home much less commonly than the British. So the volume of transactions is smaller. Secondly, the French population is dispersed over a significantly larger region than the British. We take properties on within about a 50km radius of Riberac – about an hour’s drive. As a result, accompanying buyers on viewings is vastly extra time-consuming than it would be in the UK.

So: fewer transactions per annum, and far more time spent on every, with both buyers and sellers. Against this, the overheads of a Dordogne estate agency may possibly well be a lot the exact same as in the UK. For those involved in international sales, indeed, they will be higher, because agents have to advertise both in France and abroad, growing the overhead.

Much more Work Drives Up Overheads

In addition, the Dordogne agent immobilizer has an advisory role that goes way beyond the function of a UK estate agent. In the UK, once the agent has obtained an acceptable supply, he will pass the matter to a solicitor. Apart from periodic checks on progress, his role is over. But France has no real equivalent of a solicitor. As in other Continental countries, the notary is the individual responsible for giving ultimate legal effect to the sale and buy. The notary is also needed to provide legal guidance – but he does so in an objective and informative way, rather than espousing the trigger of a buyer or a seller.

French law demands estate agents to adopt an advisory role. A lot of of our professional colleagues maintain this to a minimum. Having said that, we think that this is an opportunity for the Dordogne estate agent, rather than a gap. We prepare contracts in bilingual format, guiding buyers and sellers by way of the preliminary legal formalities. Obviously we are conscious that we have conflicts of interest, but we try to steer our way by means of them, making sure that both sides are conscious of what is involved and telling them that they are perfectly entitled to purchase impartial legal guidance from a third party if they wish.

All of this takes time and expertise. We do it for no extra remuneration – it comes from the commission we charge.

The Downward Force – Competition

Obviously there is a ceiling to the amount an agent can charge. If 1 agent had been to charge 50% where other people charge under ten it is unlikely he would obtain significantly company. But I have to say that the price competition among Dordogne estate agents does not seem so strong as to force rates down.

Where a seller gives his property to numerous estate agents – as is commonly the case with Dordogne property – French competition law demands the net sale price to be the exact same. In this way there can be price competition among the respective estate agents. Simply because properties are advertised at a commission-inclusive price, it follows that the agent with the lower commission will advertise the property at a lower sale price than his competitors. It pays for buyers to shop around.

Yet, this does not appear to happen as a lot as you would anticipate. At the lower end of the marketplace we are presently charging two thirds of the rates charged by our competitors. But there is no evidence that this price differential is bringing a lot more buyers or indeed sellers. People today seem to be far more influenced by the service they obtain than the price they pay. As a result, the downward force of price competition is much less strong than you would believe.

In a nutshell: French estate agents are extra High priced than UK ones simply because they have far more to do, with much less transactions in number, than their UK counterparts, Even though suffering comparable overheads. And it is likely to stay that way so lengthy as price competition remains weak.

Whatever the rates that estate agents in France charge, the desire to buy a property in the Dordogne area of south west France has not diminished. Why not browse via a selection of Dordogne Property and dream about that place you’ve constantly promised your self? The web page of MCM Dordogne Property: http://www.riberacproperty.com has an extensive selection of properties readily available just waiting for the chance to push you into fulfilling the dream.