By Claire Garber
On 24th June 2016 the world woke up to the shocking news that the UK had indeed voted to leave the EU. No one had anticipated (including those truth-bending Brexit leaders) that we would actually have to deal with a UK-less EU. Surely Brexit was just a charade, a fade, a gigantic political peacocking session where floppy-haired politicians enjoyed a fleeting moment in the international spotlight as we all suddenly gave a **** about politics.
The Start of the Post-Breixt Era
Since June, the UK has been busy. It’s currency crashed to its lowest level in over 30 years; the British government collapsed as the PM stood down; no one triggered Article 50 leaving us all wondering if we were leaving or not; then all the Brexit leaders resigned after admitting that immigration wouldn’t change, the NHS wouldn’t get £350 million a week in funding and that they didn’t want us to rush into pulling out. Not that they’d been lying to us all, obviously. It’s just that we’d all misunderstood. I for one am constantly confused when I see a double decker bus saying ‘NHS to receive the £350 million we send to the EU each week’ because it’s unclear isn’t it? Poor politicians.
This was all nicely rounded up by the world’s leading international banks stating they would be forced to move operations out of London if its role as a world financial hub was undermined*. Then Boris Johnson was made Foreign Secretary. And it wasn’t in any way a joke. Yes, Post-Brexit UK has been a blast.
Brex and Mortar
But what about matters closer to home, or more specifically, here in France? What about those of us who enjoy living across the channel? Who love saying we are European before scoffing down loads of cheese and wine and playing petanque on our French front lawn. What about those of us who want to buy in France?
The effect of Brexit on my French property dream was unclear so I decided to do a bit of research and find out about my post-Brexit future and how France treats it’s property-owning non-EU nationals.
It’s all NEU (Non-EU)
First things first, Non-EU nationals already own a lot property in France so my French dream was still a possibility. But most of us need to borrow money to own a home. Was a mortgage still a possibility in this NEU era?
NEU Mortgages
Non-EU nationals can still take out a French mortgage but they can’t, I discovered, borrow quite as much. French residents can borrow up to 100% of a property’s value, EU residents up to 80%, but non-EU residents can generally only borrow up to 60-65%. Of course, there’s no certainty we’ll be downgraded and treated like Russians, but we might need to save up a larger deposit.
Will I need permission to buy?
The system before the UK joined Europe, the last time we were allowed to vote, required us Brits to obtain permission from the Banque de France in order to buy in France. It is possible, but apparently unlikely, that in years to come future NEU buyers might need to do this again. But this is very speculative and very far in the unknown Brexit future.
Changing our £’s to €’s
There’s no hiding from the fact that post-Brexit the pound has slumped to some horrifying levels. Some analysts have speculated it could fall to parity against the euro, others remain more optimistic. Both the Bank of England and the European Central Bank have said they will step in to stabilise the market if the situation worsens, but what about us poor Francophiles, who just want a lovely home in the French Alps? If you do need to move sterling to euros, Mar Bonnin-Palmer from foreign exchange specialists Moneycorp, suggested (not surprisingly) to go to a foreign exchange broker. In general they do offer better conversion rates and you can ask for a forward contract. A forward contract allows you to fix an exchange rate in advance for up to two years before your payment is due, offering you a little bit of protection from fluctuating pound-euro exchange rates. Although it’s not a magic wand for a weak pound-euro rate. Even Harry Potter can’t help us with that.
French Property Taxes
The French love a good tax and property is no exception. Thankfully local taxes (taxe foncière and taxe d’habitation) are the same for EU and non-EU nationals and the previous disparity in Capital Gains Tax for EU and non-EU homeowners was abolished last year. France and the UK already have double tax agreements in place covering income tax and capital gains tax, and these tax agreements do not depend on EU membership so they are unlikely to change.
There could however be changes for people buying second homes in France that they intend to rent out. You see back in 2012, the then President, President Hollande, said he wanted to collect a 15.5% social charge from all the British landlords in France. At the time this was ruled illegal by the European Court of Justice and we all collectively sighed with relief. But we are no longer part of the protective EU so France could try a NEU to reintroduce these charges, which were set to bring in some €250 million a year. Again this is just speculation but who wouldn’t want €250 million quid a year?
Getting yourself out of the NEU back into the EU
For those of us who have lived in France for five years or more we actually have the right to a permanent residence permit. The titre de séjour permanent, (aka UE séjour permanent, toutes activités professionnelles or carte de resident ) allows you to live and work in France with the same rights as French citizens, except the right to vote and hold public office. But to be honest we are not to be trusted when allowed the right to vote so a carte de resident seems like a good option for a Brit.
Alternatively after five years you can apply for French Citizenship, although this is seen as a gift from the French authorities (not the kind of gift President Hollande was after back in 2012). You’ll need to show you are well integrated into French life, including speaking good French (you know who you are UK Expats) but if you do manage to become a French resident you once again become part of the EU which would remove all the above NEU problems, so you can stop reading the rest of this article.
“But are people still buying” I hear you ask?
The word on the local street…
France Property Angels have been my go-to property resource for many an alpine year as they specialise in finding properties for expat buyers and helping them through the whole complicated process. While I felt better with my NEU found knowledge I needed to know what was going on on the ground, and if their lives had been irrevocably changed since Brexit.
Kate Stebbing who is based in Les Gets and looks after the property sales in Les Gets, Morzine and the surrounding areas seemed relatively unphased by it all.
“I did have a few clients who came to view at the end of last winter and were going decide to buy after Brexit, but most of them just went ahead and bought anyway. I think our clients have already decided they want to buy in France and in reality it could be years until any implications, if any, are known. People just don’t want to wait that long. Everyone just seems happy to just take the risk because they don’t see buying property in France as a risk. There are some niggles about exchange rate but it’s better than about 5 years ago when I bought my first property here.”
Her colleague, Isobel Laing who works in and around Chamonix, was just as relaxed and nonplussed by the whole Brex-tastrophy,
“Our buyers with summer viewing trips booked all kept to their plans to visit, and they still went ahead and made offers. Potential buyers are understandably questioning what Brexit could mean for property ownership in the French Alps, but we won’t have all the answers until Britain negotiates its exit, and no one knows when that might be. Some buyers are actually viewing Brexit as an opportunity to buy from a British owner who is keen to capitalise on conversion of a stronger Euro. And many have brought forward plans to buy to ensure they have a base within the EU. There has been a little caution from some French banks regarding financing UK applicants until they have a clearer picture of the future, but in general it’s business as usual here and business is always busy!”
Le futur
So it seems my post-brexit dreams of buying a French property are still alive and my property anxieties were unfounded. Yes, the pound is currently weaker. It is possible that I will need a larger deposit like the Russians and all those Americans. But it seems unlikely that France will want to make it difficult for us Brits to live and own property in France, which means I can sleep easy in my French rental property, and put another centime in my property jar.
Let’s finish with a quote from French law professor, Patrick Weil, who works with the French government on immigration issues, and said in parliament shortly after the Leave vote:
‘In France, British citizens have contributed to the revival of a great number of villages abandoned by their native population. They have voted in local elections, have been elected to municipal councils, and actively participate in the life of local communities. To all Britons who have formed such attachments to France, our message can only be one of welcome.’
Which leaves the only outstanding problem that of Boris Johnson…
Viva le France!
And thank you to France Property Angels for fielding my many calls, questions, panic and anxiety about wanting to buy in the wonderful French Alps.
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