Monday, 26 October 2015

Buying French Property: Costs and Taxes



It is important to be prepared for the various costs that will be incurred throughout the French property buying process.

Deposit: When you sign the Compromis de Vente (the preliminary sales agreement contract) you will pay either 5 or 10% of the purchase price. The deposit is normally held by the notaire until completion.

Notaire fees: The cost of legal fees, stamp duty and taxes on an existing property are generally around 6.5 - 8 % of the purchase price, (plus 0.5% of the amount borrowed for registering the mortgage). Notaire fees are calculated on a scale set by the Government, so they will all be on the same basis, so you cannot “shop around”, for a better deal. You do have the freedom to choose your own notaire, and having 2 notaires involved incurs no extra costs.

Agency fees: Estate agency fees are usually around 5-7% and built into the sales price. Scales do vary quite considerably, and Allez-Français always has competitive fees. There is always a debate about who actually fees (buyer or vendor), but effectively they are paid by the vendor from the proceeds of the sale or global figure paid by the buyer, which includes the Notaire fees.

There are two taxes principal on all residential property in France: the Taxe Foncière (a land tax) and the Taxe Habitation (a local tax). The precise amounts often vary greatly, so check with your agent, and are influenced / depend upon location. I always tell potential buyers that they will not be put off a property by the size of the local taxes. (In other words, if you have to ask how much they are, you can’t afford the house).
image © pgaborphotos

Friday, 23 October 2015

You get more euros for your pounds today

The euro weakened significantly across the board yesterday, and this trend continued this morning after the European Central Bank (ECB) hinted that it may be taking action to try and boost the lagging Eurozone economy before the year end.

The bottom line is that you get more euros for your pounds today.

Take a look at the table below showing how much the cost of your property could have changed in just the last 10 days!

The £ was at 1.34 € on 13/10/15. Today £ = 1.39 €



* Average exchange rates, accurate at 1pm on 23/10/2015

You can take advantage of these great rates by contacting our currency experts at Foremost Currency – ask for Adam Bobroff, Tel 01442 892060, and advise that you are a client of Peter Elias to obtain a preferential rate……….

Have a great weekend!

Monday, 5 October 2015

Non-Farm Payrolls kicks the Euro into Touch

It was all looking so good on Friday for euro buyers; a steady rise throughout the first half of the London trading session was decimated after the key US release- Non Farm Payrolls.

Job creation figures in the States are seen as a key barometer as to the health of the US economy and, therefore, when the US Federal Reserve are likely to begin raising interest rates. The Fed were widely expected to begin raising interest rates in September this year; however, Janet Yellen has been resolute in her stance that interest rates should only rise when economic data supports the change. The expected figure from the States 203,000; however, the US only managed a paltry 142,000 which led to a dramatic weakening in USD crosses.
So why has this helped the Euro?

EUR/USD is one of the most widely traded currency pairs and, as such, tends to have a reciprocal relationship. This relationship means that if the dollar weakens then the euro tends to gain, and vice versa, as the charts below will attest.

GBP/EUR exchange rate


GBP/USD exchange rate

So what does this mean if I’m holding Pounds?


For those looking to sell sterling for another currency it is worth exercising caution. Much of the pound’s huge gains this year were due to market participants expecting the Bank of England to also look at normalising monetary policy. Mark Carney has taken a similar stance to his American counterpart in using Forward Guidance to offer his assessment of the UK’s economic landscape and keep the public abreast of the Central Bank’s views and plans. Carney has been labelled an ‘unreliable boyfriend’ for his propensity to move the posts; however, as he pointed out when destroying a journalist who dared to call him out on this fact, he is a central banker and not a politician and is led by data and not pledges.

The shaky global macroeconomic outlook recently has meant it is more uncertain than ever as to when conditions will be suitable for rates to rise. This has been one of the most significant factors behind the pound’s recent drop. And could spell further trouble for GBP pairs going forward. If you have an upcoming currency requirement then it is worth taking the time to speak with your account manager about the different options available to you. The decline in GBP/EUR means that a €200,000 purchase is over £9,000 more expensive than just a few weeks ago.

Our clients who made use of a forward contract while close to the highs can now call on their euros at any point from now, up to two years in the future, at price above the current mid-market. If you don’t have an account manager at Foremost Currency contact us today for an explanation of how they can help.

By Joe Mayhew Senior Currency Broker, at Foremost Currency
 

Friday, 2 October 2015

"enjoying the beauty that is France"

Driving along country roads lined and shaded by plane trees is a classic picture of life in many parts of south west France. It is, to some extent, one of the many reasons France is the world’s number one tourism destination.

Tragically, these iconic trees are now under threat - from motorists and the road safety lobby.
photo © Steve Allen

Efforts to remove the trees goes back to the 1970s, when destruction of the trees met a frosty reception by President George Pompidou.

Activists are once more up in arms and have launched two petitions demanding a halt to “arbicide” — or tree murder — as they call it. Their campaign carries more weight than it did in 1999 as new research suggests roadside trees can in some cases be used beneficially in cutting down road deaths.

Speaking in March this year, Chantal Fauché, president of the Association for the Protection of Roadside Trees, accused “successive French governments of creating an anti-tree psychosis among road users. ‘Trees are actually helpful in warning about bends in the road and keeping speed down. People feel they are driving faster if the trees are rushing past,’ she said”.

France is fortunate enough to be the third most forested country in Western Europe with 29% of the country given over to trees. This figure has doubled since 1850. Each year 80 million trees are planted which equates roughly to one tree every 2.5 seconds.

At present a group called the European Environment and Social Committee (CESE) is running a petition to save roadside trees across France. Some 400 motorists a year are killed after colliding with tress and the government has ordered that trees within 1.5 metres of roadsides should be removed. So far some 7000 people have signed the petition.

But as President George Pompidou said: "France is not made solely to allow the French to drive their cars, and regardless of the importance of road safety, this should not result in the disfiguring of the country’s landscape. Safeguarding the trees planted on roadsides – and I think particularly of the beautiful roads lined with plane trees in the Midi (south) – is essential to the beauty of our country, and for the protection of nature and the human environment. Modern life, increasingly surrounded by concrete, asphalt and neon creates more and more desire and need for people to escape to nature and beauty. The rural roads, (as opposed to motorways designed for speed) must become for the motorist of the late 20th century what the country path is to the walker or horse rider: a route along which one meanders without haste, enjoying the beauty that is France. So let us guard against this systematic destruction of that which is (an important) ingredient of this beauty!"

A longer version of this article can be viewed here: "Save Our Picture Postcard – Halt the Mass Cull Of Shade Trees Lining France’s Rural Roads" 

Thursday, 1 October 2015

Keeping your insurance under one roof



One of our jobs as an agent is to make life as simple as possible for you to buy a house in France. There are many aspects where this can be achieved, and most notably, we have a great working relationship with our preferred currency partners Foremost Currency. We have worked with Foremost since their formation, and full details can be found at www.allez-francais.com/finance/currency-exchange and there is also a short video about their service at the foot of that page.

There is more service where we offer exceptional added value and that is via our insurance business partner Thierry Marcq. Thierry has been insuring Allez-Français clients since we started in 2002, principally houses of course, but also health top-up plans, cars, caravans, motor homes, motor bikes, children (school insurance) and pets are just a few examples.

All policy schedules are in English, premiums are competitive, and perhaps most importantly, the claims & after service is in in English. Thierry and his assistant Asha are truly bi-lingual, and you will have no problems discussing your requirements with them.

Special deal – for multiple policies*

A 7% discount applies for a 2nd policy
A 10% for a 3rd policy

(Discount applies for all policies)

* one policy must be a motor insurance policy


I think this makes for a great opportunity for buyers to arrange their insurances under one roof, and with somebody that they can feel safe discussing their insurances. In the event of an accident, will your French be up to scratch dealing with your local French agent? The situation is stressful enough without added complications. If you want to obtain a quote for any insurance policy, please contact me in the first instance at sales@allez-francais.com and I will arrange to obtain a quotation for you.

http://www.allez-francais.com/property/D8265

US and Eurozone announcements hindering Sterling

Sterling has taken a hit against a host of major currencies over the past week or so providing a great opportunity for anyone looking to purchase the pound. This movement looks as though it isn’t coming from anything that is happening in the UK but rather the talk coming out of the US and Eurozone.

GBP/EUR exchange rates


GBP/USD exchange rates



Last week saw Mario Draghi, president of the European Central Bank (ECB), state in his press conference that there was no need for the ECB to increase their €60 billion a month asset purchase program.

With inflation and growth in the Eurozone exceptionally low the markets had started pricing in an expansion to this quantitative easing program. Draghi’s comments came as a welcome surprise to the single currency helping it to surge against a basket of currencies, including the pound.

Sterling has also not been helped by all of the talk of an imminent interest rate hike over in the US. With Janet Yellen recently all but guaranteeing that there will be an interest rate hike in the US before the end of the year, the pound has nothing to fight back with.

It was looking very likely that we would see a rate rise in the UK at the beginning of next year but that has now been blown out of the water with the crisis over in China having a detrimental effect on the UK.

Andy Haldane, a member of the monetary policy committee (MPC), has even said that there is the possibility of a future cut to protect the UK economy against negative situations such as China.

Due to this it would seem that investors are taking their funds out of the struggling pound and placing them in to alternative currencies looking for a more likely short term gain. This has in turn had a major effect on the strength of Sterling and helped its major counterparts gain some ground.

Written by Alistair Ryan
Currency Broker at Foremost Currency
T: +44 (0) 1442 892061