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Foreign buyers shun French property market

While Brits remain the biggest foreign buyers in France, foreign home ownership figures are down across the board.

Foreign buyers shun French property market
Brits still dominate the foreign property market in France. Photo: AFP
Non-resident foreign buyers only snapped up 1 percent of French properties that were sold last year, figures that have dropped almost threefold over the last ten years.
 
A fresh French property market report from Les Notaires has found that the proportion of non-resident foreign buyers has fallen sharply in France. 
 
After a peak of 2.8 percent in 2006-2007, the figure dropped to 1.4 percent in 2014 and then down to 1 percent last year. 
 
The report noted that foreign buyers were most represented by those from the UK – by far. In fact, British buyers made up 32.6 percent of the total non-resident buyers in France last year.
 
They were especially house-hungry in central and western France, as shown in the map below. In these areas British buyers made up between 70 and 80 percent of foreign buyers.
 
The next most common nationality was Italian, at 15.3 percent, followed by Belgium at 11.1 percent. 
 
Les Notaires noted the percentage of British buyers has dropped massively over the last ten years.
 
In the graph below, the percentage of buyers from the UK dropped 17 points from 44 percent in 2005 to 27 percent in 2015. The graph only measures the four biggest buyers – those from the UK, Italy, Belgium, and Switzerland.  
 
 
 
Despite this, the Brits have still outnumbered other nationalities the whole time. 
 
Elsewhere in France, the only region where the national averages differ notably is in the Greater Paris region of Ile-de-France, where the main nationalities represented are both different and more diversified than in other regions.
 
When it came to foreigners, homes in Paris last year were most popular with Italians (at 20 percent), followed by Americans and Brits (at 8 and 7 percent respectively). Next it was Algerians (6 percent) and Moroccans (4 percent).
 
Despite the survey's figures the financial climate for foreigners, or at least Brits, to buy a house in France remains positive.
 
 
A combination of a strong pound and a drop in house prices in parts of France means that there are some real bargains out there for property hunters.
 
“All the stars and planets are aligned to give customers a good base to buy from,” Heather Byrne, Regional Manager at estate agents Leggett Immobilier for the Rhône-Alps told The Local recently.
 
She says that home prices are at their lowest since the 2008 crisis and that it's the best exchange rate in recent memory. 
 
According to Leggett, the average UK buyer of French Alpine property spends around £290,000 – this time last year that would have bought you €342,000, but today it would fetch €390,000.
 
But it's not just about the favourable exchange rate.
 
“On top of that, French mortgage rates are also at an all-time low. It's the same as in the UK, the government wants the markets to be opened up and for people to keep selling to generate movement across the economy,” Byrne told The Local.

 
 
 
 
 

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PROPERTY

Property taxes: How much will it cost to extend your French home?

Installing a swimming pool, building a garden shed, or adding a conservatory to your French home has become more expensive in 2023.

Property taxes: How much will it cost to extend your French home?

If you are planning a renovation project in 2023 you’re likely looking at rising cost for materials and labour due to inflation – but there is one other cost to consider; taxes. 

In France there is a one-off tax that has to be paid on certain building works, and the government has raised the rate for this.

The taxe d’aménagement, sometimes referred to as the garden shed tax, applies to all property development – construction, reconstruction and extension – of buildings that require planning permission or a building permit.

Garden sheds, swimming pools or extensions with a surface area of more than 5 square metres are subject to the development tax – although a 50 percent reduction is applied to the flat-rate values of certain buildings, particularly the first 100 square metres of main residences.

READ ALSO Everything you need to know about installing a swimming pool at your French property

The tax is collected by local councils, who set their own percentage rates for the tax, working off the base rate set by the government.

A decree published in the Journal Officiel set the base figures for 2023 at the following rates: 

  • €1,004 per square metre in Île-de-France (up from €929 per square metre in 2022);
  • €886 per square metre outside Île-de-France (€820 per square metre in 2022).

The flat-rate values per square metre of building space, which constitute the basis for the development tax, are revised on January 1st of each year according to the latest construction cost index published by national statistics body Insee. 

Additionally, specific rates are set for:

  • €250 per square metre  for a swimming pool (up from €200 in 2022);
  • €12 per square metre of ground-fixed solar panels (up from €10 in 2022);
  • €3,000 per wind turbine more than 12 metres high;
  • €3,000 per pitch for tents, caravans and mobile leisure homes;
  • €10,000 per pitch for a holiday chalet or bungalow.

The amount of the tax is calculated according to the following formula: 

(Taxable area multiplied by the government-set base figure) multiplied by the percentage tax rate set by the local authorities. This gives the total to be paid in cents. Bills are rounded down.

So, the tax for a 30 square metre extension in an area where the combined local and departmental tax rates total 6.25 percent would be calculated like this:

30 (the size of the development) x 886 (the base tax rate outside Ile-de-France) = 26,580

6.25 (local and departmental tax) x 26,580 = 166,125 cents, more usually expressed as €1,661. 

If the total payable is less than €1,500, you will receive a bill in the six months after planning permission was granted, with details of how to pay.

Otherwise, it is paid in two instalments, 12 months and 24 months after authorisation, with a 10 percent surcharge applied in cases of late payments.

READ ALSO The hidden costs of owning property in France

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