France provides a strong investment environment. Legal title is robust, the law regarding property is transparent and while there are a few quirks (hey, this is France, after all) there’s nothing to be worried about. CGT is reasonable at 16%. Round trip transaction costs are the elephant in the room – high at up to 20% – but, as they say, don’t let the tail wag the dog. The piece de resistance is the government-backed Residence du Tourisme (RdT) - or leaseback as it’s popularly known - scheme. Owners buy a designated RdT property and lease it back to a management company to receive a guaranteed rental income. The VAT (TVA in France) that would otherwise have to be paid on a new property in France is refunded to the buyer. Many rules and regs apply. Ask any developer or agent to explain fully the scheme.
Like most of Europe, house prices in France appeared to have had their day in the sun – doubling and more in a decade. They fell back 10 to 15% in 2008, but have begun to rally: a 3.9% increase q-on-q in Q2 2009. Time will tell if this is a blip, but what France holds over other countries is high buyer demand and an under-supply of properties (several million according to one recent study), which makes a classic case for capital growth – all other things being equal.
GlobalPropertyGuide.com reports gross rental yields in Paris range from 3.61% on 200 sq metre apartments, to 5.26% for 20 sq metre properties. Average gross rental yields in Paris are relatively poor, at 4.30%. For a hassle free rental option, take a look at the leaseback option offered at many developments. Guaranteed net rental yields vary from around 3.5 to 4.5%. Conditions apply.
If you want to go it alone, Holiday Lettings website has more than 4,000 properties to rent in France on its books – so competition is extremely high. Prices start from around £200 per week for an apartment in La Plagne, in the French Alps, that sleeps six.
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Amanda Lamb is on her travels finding you the ideal location for your new house
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