Retiring to a home near the Canal du Midi opens up an exciting, and affordable, lifestyle

With high living costs and decreasing pension pots, only one in seven people believe that they will have enough money to live comfortably in the UK once they stop working according to a survey from the National Association of Pension Funds (NAPF).

Data from the NAPF highlighted that the UK could witness a large numbers of retirees moving overseas in an attempt to find better value for money with the Office for National Statistics (ONS) citing destinations such as France, Spain, Australia, the USA and Canada as top picks for UK pensioners.

Danny Silver, expert in French real estate and MD of The Villages Group, comments: “The numbers speak for themselves – 34% of those who took part in the NAPF survey said they would rather retire somewhere cheaper overseas than start paying more into their British pension while 24% of those aged 55 to 64 shared the same view, indicating that their inability to save more for retirement left them feeling more pressurized into moving abroad.

“Of course, as more and more people in their ‘third age’ see their costs of living rise and their standard of living drop, it is hardly surprising that they are looking for better deals overseas.”

Climate, coast and countryside

France, for instance, is undoubtedly one of the ultimate retirement destinations for a wide variety of reasons. It’s close to the UK, celebrated for its cuisine and culture and affords a varying climate depending on what part of the country you reside in, be that Bordeaux for its stunning countryside or the long sandy Mediterranean coastline of Languedoc.

With this in mind, the Languedoc-Roussillon region makes for a wonderful place to relocate in your golden years. Chosen for its three C’s – climate, coast and countryside as well as being one of the best places in the world to go canal boating, Languedoc is one of the most visited parts of south-west France.

France, for instance, is undoubtedly one of the ultimate retirement destinations for a wide variety of reasons

As a result of Languedoc’s popularity, The Villages Group has decided to develop an active living resort ‘village’ for those over 50 at the UNESCO World Heritage Site of Canal du Midi, one of Europe’s longest and widest canal systems.

Explains Silver: “The Canal du Midi is one of the most remarkable feats of civil engineering in modern times. Laden with plane trees, planted in neat rows in the 1830s to strengthen the banks, this magnificent environment became an integral part of the canal’s beauty and a tourist attraction when it finally ceased to be used for commercial transport in the 1980s. It is a wonderful place for engineering enthusiasts or for those simply wanting to bask in the beauty of the canal.”

The Villages Group will provide a village community of around 116 villas on the banks of the Canal du Midi. This village site will afford full on-site amenities including tennis courts, indoor pool, gymnasium and quality entertainment programmes, perfect for living an active and fulfilling life within a community of like-minded individuals.

For more information visit www.thevillagesgroup.com

Quercy is the region between The Lot and Tarn rivers and is one of the oldest wine producing regions in France. This is a landscape of buzzards, red squirrels, nightingales, butterflies, wild flowers and orchids

Zoe Scott and her family treasured their visit to France every year, discovering yet another part of the country. In the summer of 1988 they rented a holiday home and it was then that the idea of moving to France permanently really took hold. Nothing in the Dordogne matched up to their ideas, so one day they drove south to Cahors in the Lot Valley to see the magnificent Pont Valentre (medieval bridge over the river Lot).

The Lot is known as the gateway to the south and they were captivated by the champagne-coloured houses, hilltop mediaeval villages and their first taste of superb Cahors wine.

One minute they were sipping coffee in a square opposite an estate agency and the next they were in a car being driven by a chic Frenchwoman to view three properties – and then down the lane, through the farmyard to Mondounet….

Zoe takes up the story: “Mondounet was located in an idyllic setting for the 17th century farmhouse and outbuildings, set on the hill and overlooking two valleys. There was nearly a hectare of land (about two acres) – a large stone barn, bread oven and stable. It was really peaceful and somehow we knew that we had found our dream. The very next day we signed on the dotted line and moved in later that year – October 1988. Restoration and conversions were carried out and the following year we were able to open our doors to our first holiday guests.”

"Now, after all those years, we still believe that moving to this beautiful part of south-west France was the best decision we ever made'"

In the Quercy region, it’s well worth visiting the markets (our local village of Montcuq has one of the best Sunday markets around); drinks and lunches in the pavement cafés; village fêtes; visiting the chateaux and caves; music – blues, jazz and classical concerts. “We have some of the most beautiful countryside, vineyards around the corner for wine-tasting, superb country cooking and Michelin-star restaurants. In addition, there’s always a warm welcome from the locals.”

Quercy Blanc

“This is a landscape of buzzards, red squirrels, nightingales, butterflies, wild flowers and orchids. There are rural properties that have become vacant and in this beautiful countryside, with unused roads winding up through woods and vineyards it’s not unusual to come across the distinctive profile of an old Quercynoise limestone farmhouse with its Roman tiles and pigeonnier (dovecote).”

Getting here:

The region is easily accessible by road, rail and plane:

Airports:

Toulouse and Bergerac airports are just 60-75 minutes drive. Bordeaux & Rodez are two hours drive and Carcasonne 2½ hours drive.

Ferry:

From the U.K. – The ferry ports: St. Malo and Le Havre are 8-9 hours driving time and there is a local airport at Cahors for light aircraft.

Trains:

The Pyrenees and Spain are about three hours drive away, as are the Atlantic and Mediterranean coasts. Paris and Barcelona are five hours drive. Montcuq is just 25 kilometres from Cahors and the new A20 motorway

Paris is five hours by train to Cahors and faster by TGV to Agen, and under an hour by plane. With the enormous investment in road and rail in France it’s now possible to still be in touch with the world while enjoying the peace of the beautiful countryside.

About Mondounet Holidays and Homes:

Bed and breakfast is from €60 per night for two people, inclusive of breakfast – or self-catering in the 17th century farmhouse with lovely views over the peaceful Lot countryside, from 200 euros per week.

Established in 1963, Quercy Gascogne Immobilier is a family-run estate agency. The office is situated in the heart of the bastide town of Montcuq, the base of choice when property hunting in this beautiful part of the Lot.

For more information go online at www.mondounetholidaysandhomes.com

(Associated with Agence Quercy Gascogne)

Stewart Andersen, Editor

Market day in Montcuq

As the days get shorter and colder, emerging from my home in Montcuq can be a daunting prospect and one Sunday recently I found myself believing I’d have to stay indoors until the spring, cooking, reading and knitting to entertain myself in our small village in the southwest region of France. Outside, the horse chestnut trees that not so long ago dropped their conkers on cars, boule players and pedestrians alike hang their heads and wait for the warmer weather.

But actually, in spite of it being a freezing wet Sunday, we were spoiled for choice. The morning’s main activity involved preparing lunch after going to the local market. Half the stalls didn’t turn up for once because of the rain but the old farmers and diehards were there with the best of the local produce. This is very much a country area and the food from the Lot is delicious and above all, seasonal.

The Christmas spirit

Wild, spicy rocket from the toothless cowboy, organic spinach from the mousy little lady wrapped up in a coat and shawl, and baby sprouts from the man with bandy legs who served us while managing to let the rainwater run down the gutter between his feet.

A busy Sunday in the Lot

At the same time, local firemen were showing off their skills to raise money for a Telethon and the local school and all the teachers were selling homemade cakes and cards in the same way that the WI does in the UK.

We enjoyed a lovely lunch with old friends and someone popped over to ask if he could use the Internet. After an enormous and delicious pot au feu, a variety of cheeses and two cakes (one made by the school), we strolled up to the church of St Privat where the choir was due to sing a Christmas Concert in French and English. This just goes to show how many foreigners, and especially the British, tend to have settled here.

The whole church was full of elderly residents and the only other young person was the 11-year old butcher’s son but I loved being there all the same and really getting into the Christmas spirit. The Mayor turned up and clapped enthusiastically after every song, and the choir was wonderful, particularly given that they are all amateurs.

To round off our Sunday we made our way to the Salle de Fêtes to see a movie, When Pigs Have Wings (Le Cochon de Gaza). This is a French, Belgian and German production directed by Sylvain Estibal and is the story of a poor Palestinian fisherman who reels in a pot-bellied pig along with his usual catch.

I can’t say I felt especially guilty when finally I took to my cosy bed with a good book (The Hare with Amber Eyes) and no supper after such a busy and fun-filled day in cold December. Life in Montcuq really has a very great deal to offer.

London

£125,000

Royal Albert Dock Hotel, London

Obviously this sort of money will not buy you a penthouse flat in London, (Lonely Planet’s Top Destination for 2012), but if you are looking for a double digit return from a UK property investment then take a look at the Royal Albert Dock Hotel operated under the Holiday Inn Express brand.

Available at pre-launch prices, 22% below independent RICS valuations, the Royal Albert Dock Hotel capitalizes on the thriving London hotel market which PricewaterhouseCoopers identified as the best in Europe in 2010.

Located at Royal Albert Dock, just minutes from the financial centre of Canary Wharf and the entertainment hubs – the O2 arena and ExCel exhibition centre – the hotel should attract both business travellers and tourists alike and for a limited time is priced at £125,000 for a suite (with VAT paid by the developer). Investors can expect 7.5% NET yield rising to 10.5% by year five and up to 50% non status finance is available.

For more information contact Property Frontiers at www.propertyfrontiers.com.

Spain

Under £192,500

Mallorca

On the Balearic Island of Mallorca in Spain, leading house builder Taylor Wimpey España is marketing Phase III of Cala Magrana. This development has direct access to the sea, close to superb golf courses and is five minutes from the unspoiled fishing village at Porto Cristo.

Just 20 apartments have been released on Cala Magrana and they are likely to sell fast. All apartments are being built as two-bedrooms with air conditioning, designer brand fixtures and fittings and a sea view. All this for a price of just under £192,500 + VAT.

Contact Taylor Wimpey España at www.taylorwimpeyspain.com for more information.

France

Just over £144,000

The Village, a new active-living development in France

In the Dordogne, a brand new active-living village is being created. This ‘village’ is for those over 50 who want to live in an environment where every day was made for living.

A log cabin or resort style home will be built to the highest standard. With stunning views over the Dordogne and Vezere valley, owners will be able to enjoy the finest horse riding in France plus walking, cycling, canoeing and golf. And for the more adventurous, activities such as potholing, hot air ballooning and even hang gliding will be available. Or for a quiet day there is excellent fishing in the private lake.

The Village will also offer other entertainment, culture and sporting activities as well as superb on-site amenities such as tennis courts and indoor pools. Prices start from just over £144,000.

For more information contact The Villages Group at www.thevillagesgroup.com

Turkey

As little as £57,750

Istanbul

Turkey continues to be a good investment and the wise money is being spent in Istanbul where there is an acute shortage of rental property. Completed in January 2011 Kensington Residence comprises 1-, and 2-bedroom apartments in seven blocks of seven floors each. The properties have a very modern design and the very best in luxury on-site facilities.

Kensington Residence is located in the western suburb of Beylikduzu which has one of the strongest growth scenarios within Istanbul due to its proximity to the city centre. This is combined with the benefits of living in a well serviced environment away from the over-crowded city centre.

Price indicators show 30% growth on current projects from off-plan to completion in 18 months. A one-bedroom apartment will cost as little as £57,750 and 2-beds for just £95,950.

For more information contact Property Frontiers at www.propertyfrontiers.com.

 Albania

Under £205,000

Lalzit Bay, Albania

For an alternative European investment then you might like to consider Albania. There is a strong likelihood that property bought now will enjoy big returns as this country establishes itself as a global tourist hub.

The Adriatic resort occupies a fantastic position in the centre of the unspoiled natural beauty of Lalzit Bay. The resort is just 30km from the international airport with direct flights across Europe and 30km from the cosmopolitan capital of Albania – Tirana.

The resort will benefit from a beach club, sports and tennis club, indoor hydrotherapy pool as well as more traditional indoor and outdoor infinity pools situated around the resort. Shops and boutiques catering for all tastes and an excellent selection of restaurants are on-site offering a range of different cuisines.

For more information contact Lalzit Bay at www.lalzitbay.com.

If you own a property overseas, always keep up-to-date with changes in legislation

Trevor Leggett, Chief Executive of Leggett Immobilier, one of the leading international estate agencies in France says: “The amendment is primarily aimed at providing relief to French ex-pats but could benefit hundreds, if not thousands, of UK owners of French houses who had been reluctant to put their properties on the market. “You must have owned the house for at least five years and you can’t have owned a ‘principal residence’ for at least two years. In cases of divorce the absent partner can still consider the marital home the principal residence. Parliament has said that the new rule will come into force on 1 February 2012, to coincide with other property tax reforms. However, I’m not yet sure that they have nailed this down and expect further twists and turns ahead”.

Currently, residents of France are subject to fixed rates of capital gains tax of 19 per cent as well as paying social charges. Non-residents, from outside the EU, pay 33.33 per cent with no social charges.

Those non-residents who come from within the EU pay tax on French property gains at 19 percent and do not pay social charges.

The capital gain is calculated as the proceeds from the sale less cost of purchase. A deduction of 7.5 percent of the acquisition price can also be made in lieu of actual costs, or the costs themselves (if you have proof) can be deducted, as well as any costs of sale such as estate agency and legal fees, transfer tax and Notaire’s fees.

Parliament has previously said that from 1 February 2012, a new CGT relief will apply:

Years 1 to 5 – no relief

Years 6 to 17 – 2 percent relief per annum

Years 18 to 24 – 4 percent relief per annum

Years 25 to 30 – 8 percent relief per annum

To keep up to date with any property related tax changes you should regularly visit the website www.frenchestateagents.com. Do always remember to seek specialist professional advice.

A view from the French Alpine resort, Méribel

It seems European ski resorts are no longer snowed under by the global economic downturn and are starting to show signs of recovery according to the first-ever Ski Resort Property Index for Q2 2011 from Knight Frank, with prices in many resorts having now stabilised or in some cases having seen small increases, particularly across the French Alps.

Over the past five years, French ski resorts have experienced a substantial amount of investment, helping improve accessibility and infrastructure as well as the quality of the skiing, However, it is thought that other factors are at play in the stabilisation of prices and recovery of the market.

It has been suggested that a large number of high altitude French ski resorts often prove more reliable in terms of snowfall, while an additional factor at work, apart from the culinary delights, comes from the wide selection of seasonal sports and activities available beyond skiing.

Liam Bailey from Knight Frank

Liam Bailey, Head of Residential Research at Knight Frank, comments: “Demand for property is proving less seasonal in many of the world’s luxury ski resorts. Summer tourism, often involving hiking and climbing, particularly in the Alps, has helped to increase rental incomes for many second homeowners. The Alps are now host to a number of summer festivals, concerts and sporting events attracting visitors year round.”

Certainly, the year-round appeal has been a big attraction for Eurozone buyers in 2010/11. While UK buyers account for 35-40% of prime property purchasers in the French Alps, Italian buyers have been fiercely competing for a slice of the property market having been unaffected by currency variations at the time of the global economic recession.

Further research from the Ski Resort Property Index highlights that sales activity in French alpine resorts in 2010/11 has proved strong with areas such as Courchevel, Méribel, Megève and Val d’Isère performing well and seeing the best properties draw interest from more than one buyer. This has allowed sales to be made at or near the asking price.

High demand

Ranked one of the best ski resorts by the Daily Telegraph and now even easier to reach with Eurostar direct ski trains from St Pancras, London to Moutiers, only 25 minutes away from the resort commencing 17th December, Meribel, situated in the middle of Les Trois Vallées, is in high demand as investors rush to snap up luxury units in the only new build development this season, Les Balcons de la Chapelle.

An interior at Les Balcons de la Chapelle

Business Development Manager, Charlie Williams of Terresens, France’s leading eco-friendly property developer responsible for Les Balcons de la Chapelle in Meribel, comments: “New ski property developments such as Les Balcons de la Chapelle have brought a fresh level of quality and luxury to French resorts. Meribel remains one of the most popular destinations with British ski enthusiasts, ranked one of the 50 most expensive locations for residential property in the world by the Knight Frank Prime Residential Index (2010) with property prices reflecting the desirability of the area.

“While the market is still very price sensitive, viewings for property in prime French alpine resorts have increased and we at Terresens have seen considerable interest in our luxury new build development in the heart of Meribel, perfect for those who desire all year round indulgence.”

The limited number of 2-, 3- and 4-bedroom apartments and chalets of Les Balcons de la Chapelle occupy a prime location, just a short walk from the ski lifts, shops and restaurants and command incredible unobstructed views out over the mountains. Available fully furnished to the buyer’s specification, these luxurious residences afford stunning views over the valley and La Chapelle Notre Dame costing from €560,000.

To find out more about Les Balcons de la Chapelle in Meribel, contact the developer Terresens at www.terresensproperties.com.

French property and lifestyle is continuing to be popular among Britons

The latest report from the FNAIM shows house prices rising for the 5th consecutive quarter. The report covers the second quarter of 2011 (April – June) and is available on www.fnaim.fr.

Prices of properties sold by FNAIM members saw an average rise of 3.3% over the previous quarter with a strong rise (4.3%) in properties outside of Paris.

Trevor Leggett, Chief Executive of Leggett Immobilier, comments: “Further headlines of house price rises need to be treated with caution. We know that the average price of property sold in France by FNAIM members has increased by 6.8% overall this year but it’s important that vendors expectation levels remain realistic.”

Sensible pricing will mean that transaction levels remain consistent and both buyers and sellers will benefit. As previously reported, Leggett Immobilier are certainly seeing an increase in enquiry levels from both local and international buyers – particularly at the top end of the market.

The new wealth tax rules coming into place are making France one of the most attractive destinations in Europe, as the threshold for this tax (ISF) is increasing from €800,000 to €1.3 million. Households with assets of between €1.3 million and €3 million will be subject to a tax of 0.25 percent and for assets over €3 million the tax will be 0.5 percent.

There has also been one recent change to the law on Capital Gains Tax: Previously, a reduction of 10% per year, beyond the fifth year of ownership, has been applied to the gain calculated. Therefore, sales made beyond the 15th year of holding the property had been fully exempt from CGT and social security contributions.

Now though, the tax due on the sale of these ‘non primary’ residences will be calculated in accordance with the Indice du Coût de la Construction (rate of building inflation) at the time of the sale – taking into account the year you bought the property. In essence this ensures that the natural evolution of price rises is not taxable which appears a sensible move.

This new regime will apply to sales after the 24th August 2011.

Non-residents may well have to pay for an independent fiscal representative to ensure the CGT calculation is correct.

The Government are overseeing some radical tax changes to French property ownership and Leggett Immobilier aim to keep you abreast of the implications of these changes through regular updates on our website www.frenchestateagents.com.

The opening up of new Jet2 routes from Scotland will give skiers greater access to the slopes

From December 2011, low-cost airline Jet2 are commencing new routes from Edinburgh and Glasgow to the heart of the Alps – Chambery, Geneva and Salzburg. With the winter holiday season only months away many keen skiers will already be planning a vacation and having greater access to the slopes is excellent news with direct flights from Glasgow to Geneva and Edinburgh to Salzburg and Chambery.

Commenting on the announcement of the new routes, Ian Doubtfire, Jet2′s Managing Director, said: “Friendly flight times are carefully scheduled to get passengers to the resorts and out on the snow the day they arrive. Customers don’t need to rush for a seat as they are pre-allocated – we want to make sure any racing is done on the piste and not to get on the aircraft!”

For owners of chalets on the Alpine ski slopes who will be looking to maximise their rental potential, new flight opportunities such as these are always fabulous news.

Charlie Williams, Business Development Manager of eco-friendly ski property developer Terresens and keen ski enthusiast explains: “Giving home owners and holidaymakers more choice and more availability to fly is always very positive news. We are particularly interested in the new flights being opened up to Chambery. This airport is a key portal to get into the Alps but also particularly good for people wanting to ski in the Tarentaise as the airport is only just over an hour from most resorts in this area. This ski region includes Val d’Isère and Tignes which is undoubtedly one of the largest ski areas in the world.

La Chapelle at Ste Foy is fully equipped with a wide range of facilities including an in/out pool and a spa

“We have a particularly interesting development in Ste Foy which nestles just below these two busy resorts. Ste Foy is a beautiful hidden gem, tucked 20 minutes away from the hustle and bustle of Tignes and Val. The beauty of this resort is that the prices are ridiculously cheap compared to their neighbouring giants and holidaymakers have the choice of spending the day on the quiet slopes on their doorstep or driving up the mountain to use one of the other resorts. Another great fact about Ste Foy is you are skiing below the tree line rather than the barren open pistes in Val d’Isère and Tignes.”

La Chapelle is a luxurious 4* block of 68 apartments that provides both a fantastic lifestyle opportunity and also a strong investment with guaranteed and index-linked returns for 18+ years with an excellent French management company. All apartments come with fully fitted kitchens and flat screen TV’s. Shared facilities include an in/out pool, sauna, Turkish baths and a spa.

Prices for apartments in La Chapelle, Ste Foy, start from €161,014 and include furniture and parking.

For more information, contact: Terresens on-line at www.terresensleaseback.com

La Maison Caignac, in the beautiful south west region of France

Built in 1707 and renovated throughout in 2003 this luxurious Maison de Maître offers a spacious 655 square metres in 0.92 hectares of grounds. The house, situated in the centre of a small village and located within 100 metres of the bar/café/small shop, is equipped with six bedrooms (one en-suite), four bathrooms, three salons, three kitchens, dining room, games room and laundry.

The swimming pool at La Maison Caignac is located in the formal landscaped gardens

Outside, in formal landscaped gardens, is a heated 12 x 8 metre swimming pool, a tennis court, boules court, garden chess and a small acacia wood. The terrace features a vine-clad pergola, a barbeque and pizza oven and a formal dining area for 14 persons. There is a wine cave with a natural well to irrigate the garden. There is also covered parking for four cars.

The current habitable accommodation is split currently over two floors. In addition, there is a third floor (already equipped with power and water) of 325 square metres which is available for conversion into a minimum of eight additional en-suite bedrooms with extensions to the two existing stairwells.

The house is capable of being split into three separate areas by the locking of two doors, affording divided accommodation to larger family groupings. The current owners let the property during the months of May to September for short-term holiday lets and achieved a 4 per cent gross return in calendar 2010.

La Maison Caignac features:

• The house – renovated to luxury level in 2003 with 655 square metres on two floors (plus an additional 325 square meters of space suitable for future development on the third floor)
• Six double bedrooms – the master en-suite and with a dressing room
• Four additional bathrooms
• Three kitchens, each equipped with oven, fridge and dishwasher
• Three salons, two with open fireplaces, one with a wood burning stove
• Dining room and mezzanine space for a rest area, office or library
• Utility room and laundry room
• Cellar for use as a wine store which also houses a well
• Imposing entrance hall and lavatory
• All electric with three separate circuits

La Maison Caignac's tennis court

The garden

• Formal landscaped gardens and a small wood in 0.92 hectares (two acres)
• Tennis court
• 12 metre x 8 metre heated saltwater swimming pool
• Boules court, outdoor chess
• Covered parking for four vehicles
• Additional hard standing with vehicle gate access to the main street
• Vine-clad pergola, barbeque/pizza oven and dining area for 14 persons
• Stone outside shed for all garden machinery

The Area

• Caignac, in the department of the Haute Garonne, is some 35 kilometres south west of Toulouse (airport 40 minutes) and 55 kilometres north west of Carcassonne (airport 50 minutes) and is six kilometres from the Canal du Midi and the local town of Villefranche de Lauragais.
• The Mediterranean is just over one hour away as are the ski slopes of Ax Trois Domaines
• The Lauragais is an area of outstanding natural beauty, farmed for cereals and sunflowers, and is at the north end of Cathare Country giving a history trail back to the 13th century. The nearby towns of Carcassonne, Albi and Mirepoix are regular fixtures on the tourist trail.

Initial contact: e-mail Bob Lewis at bob@caignac.com or go on-line at: www.lamaisoncaignac.com

The bottom line is that this new tax will not set property owners back that much

In this article, we shed some light on the proposed new French tax on holiday homes and put the issues into perspective and show how to calculate the amount you may have to pay. Although it may hit the rich hard, others may not feel the effect quite so much.

A new holiday tax has been approved by President Sarkozy’s Cabinet and will be put before parliament to take effect from 2012 onwards. The tax will be imposed on all those who own a French holiday home and who don’t rent it out on a long-term basis. It could even hit French expats living abroad who are no longer residents for tax purposes, although not if they’ve paid tax for three of the previous ten years, which will probably account for the majority.

The tax won’t have any effect on investment properties such as French leasebacks and properties that are rented out (buy to lets). Second home owners in France already pay two local taxes – taxe d’habitation and taxe foncière – and this one will also be calculated based on the rental value of the property.

“Owning one or more second homes implies that one benefits directly or indirectly from local and national public services, like the police, legal system and national infrastructure,” the Finance Ministry said.

Many are worried that with the already weak pound, this new tax will have a serious effect on the housing market in France, in particular in more rural areas. The number of expats selling up has already increased considerably (doubled in fact in the past year) and this may be one step too far for them.

Rental value

As the tax is calculated based on the rental value (so dependent on the size and location of the house) you will pay more if your property is located along the French Riviera, in Paris or in one of the ski resorts. However, many would argue that for those who already own such premium housing or are looking to purchase in these areas, the extra levy will be no more than loose change.

Markets in France become very much a part of the lives of property owners

The flip side is that for most second home owners who’ve bought a character property in a rural area of France (be it Normandy, the Dordogne, Charente or Limousin) the rental value won’t actually be that much, and thus the amount owners will be levied won’t be very much.

To calculate the charges you might face, look at a copy of your last taxe foncière bill. On the last page, under ‘Taxe foncières – Détail du Calcul des Cotisations’, next to the word ‘base’ should be the rental value of your property. You should see that the various taxes levied by your Council produce amounts that relate to that rental value. The new tax will be 20 percent of that ‘base’ or notional rental value. So 20 percent of that figure is what you’d be liable to pay each year.

We can illustrate this point with a villa located near Allemagne en Provence (in the Alpes de Haute Provence), currently on the market for €577,500, with two acres of land, a pool and five bedrooms. The ‘base’ is €1,914 which is the estimated rental value for the French tax office. The owner currently pays a taxe foncière of €1,046/a year. This new tax equates to an extra €382.80 a year, or €32 a month, which is not a large sum of money, and this is a fairly desirable area of France, under an hour from Aix en Provence.

The bottom line is that this new tax will not set property owners back that much. Hope remains that it may not even come to this – the tax will no doubt be challenged as discriminatory under European law, even though the wording tried to avoid this issue by saying that all who own a second home are liable, even French citizens resident abroad.

An interesting aside: The French will be reforming their own wealth tax, and items such as art work (paintings) and statues will now be taxable and part of the wealth tax calculation. They had previously been excluded from the list when the new wealth tax was created in 1981. The threshold is likely to be €900,000, so relatively high. The tax shield put in place by Sarkozy in 2007 puts the ceiling on the tax at 50% of income but MPs are keen to scrap the shield altogether. Both still remain to be debated, however.

For more information on French property in general and the new tax in particular, go on-line at: www.sextantproperties.com