Is it worth it?

[dexter]

As I sit here with the compromis de vente in front of me awaiting my signature(s) for a property that I would hope to move into around about March 08, I find myself in a situation that I expect many of the readers of this forum will have experienced before.

Is it worth it?

The purchase of the property rests on the sale of my house over here and the market,(in my opinion fueled by yet another media frenzy) is showing signs of cooling down. I dont realy want to get into the area of bridging loans but that at present seems a real possibility.

Then theres health care, whilst I will be able to utilise the E106 system for the best part of 2 years the prospect of private health insurance is quite daunting. I suffer from asthma, and whilst it is only very mild and has been under control for many years I will have to include this on any application I make which will in turn, up the premium no doubt. 

Then theres the tax! Having recently retired from the police service my pension is regarded as a government pension and will be taxed in the UK but if I`m resident in France I wont be eligable for UK health care, so just what is my tax paying for?

What other taxes and the like would I be expected to pay in France?

I know that it seems that I`m seeing everything in a negative way and perhaps it`s just the nerves of making such a life changing decision but I bet I`m not the only one in this situation!

HELP!!  

[woolybanana]

Just to deal with the dosh situation, if you UK house is worth a hell of a lot more than your French one then you should be able salt away enough to cover your health contributions plus a good bit to spare.

[Anton Redman]

I would not take out a bridging loan to buy a French property or put my self in the position on worrying about selling a UK home in order to buy a French house. Unlike the Uk there are vast numbers of new houses being built in France. The costs of the transaction Notaires, Immobeliers etc etc are such that you have dropped a significant amount of money as soon as you buy a house in France. You can always find somewhere to rent / store furniture at a reasonable price while you look for a house.  

[DerekJ]

You also need to be keeping a close eye on what is happening to the Euro/Pound exchange rate. As you know, the rate has been dropping recently and there are predictions it will drop further especially on the back of what the European Central Bank and the Bank of England do about interest rates.  Every 0.01 change can make quite a difference to to the Pound cost of the purchase price depending on how much you are looking to spend.  That is unless you already have the money forward booked.

[Frederick]

The bottom line is ......"does this feel right ?  "    I have just had a friend who is a retired police sergeant  come out of  hospital  after  two weeks in due to an accident .....While there  he had time to reflect on his impending  move having sold his house ...He was just going from Surrey to South Wales.........  He said he realised he was doing it for the wrong reason ....money.  for him it didnt feel right.....  doing it just to go from a semi into a detached property with some cash to spare ....

[AnOther]

For what it's worth without a solid buyer for my UK property I'd be very wary of bridging.

As you rightly observe at the moment the UK property market is in a state of confusion at best with little evidence that things will improve either in the short or medium term and could well deteriorate significantly.

However you have set your heart on a particular French property there will always be another and at the risk of being contentious and accused of "doom saying", with the recent health changes you may, in the coming months, well find a number of properties coming up for sale at attractive prices. Who knows, you might even find someone to do a trade with with obvious financial advantage to both parties.

We were fortunate in that we were able to finance our French purchase without borrowing but neverthless the 9 long months it took to sell our UK house were demoralising in the extreme and would have been hugely draining on our resources if we had borrowed.

Good luck anyway whatever you decide, it's better to be asking yourself these questions now rather than when there's no going back !

 

[virginia.c]

Oh Dexter!  It's a big decision even if your house had already been sold.  A previous poster has mentioned the volatility of the pound/euro exchange rate and even if this were all you had to worry about, as the poster said, a poor exchange rate could end up costing you thousands. It is also true that the English housing market has cooled significantly and if you were to go ahead with your French purchase not having sold your English house you could be paying for bridging finance for a very long time.  I can only speak for myself when I say that I would not countenance signing a compromis unless I had the funds available or in place to purchase the French property, but, if you do go ahead, you risk losing a lot of money.  Previous posters to a similar thread have suggested requesting a suspensive clause stating that the purchase is conditional upon the sale of a UK property, however, this may well not be acceptable to your vendors.  You will only find out by asking.

Good luck![:)] 

[Steve c.]

Dexter

Whats the hurry, unless this house it the "only one for you" I would wait and let things pan out a little, there will always be another house come along, in the mean time have a few holidays in different departments and enjoy you retirement for a while and let the dust settle before jumping out of the frying pan !

Bon Chance what ever you do.

 

 

[Pads]

Hello Dexter

Putting all the practical money issues to one side, As only you know weather you can afford to wait to sell your  house. Like you signing the papers pulled me up for a moment and made me reflect on what we were doing was a positive move for our future , or just a dream we were living in to the full, it was a lot of money for us to spend if it was a dream that once we had fulfilled we might become bored with.....................! But Im very glad we went ahead as its given us a good reason to get up in the morning and work hard to put us in that position where we can spend more and more time there until we can afford to retire there for good, I have started lessons in french which I have thrown myself into now. That has been really good for me as I suffered memory problems after head injuries in an accident, and having to work this hard with my memory has helped loads. 

You need to look past this moment in time and look to where you want to be in five years, It will always boil down to money at the end of the day, and there are many swings and roundabouts on that subject, we have found that by just the saving we are making in local poll tax( i know its not called that now but I cant keep up with all the names its had [blink]) we can purchase our health insurance. What do you want to do in your retirement ? will this be better serviced by longer warmer days and evenings ? or by the more organised social events in England ? I hope you make the right decision for you, dont settle for what is safe and easy. Do whats good for you and yours. Good luck and what ever you do enjoy your retirement.[:)]  

       

[Apero]

 

Having to ask the question with worry on your mind over your UK house sale together with a possible bridging loan - a resounding NO.  Suggest you let this purchase go, you will make yourself ill as time progresses should you have not sold, however, you may sell quickly, however, you may not, is it worth it (sorry) the uncertainty.

[quote]Then theres the tax! Having recently retired from the police service my pension is regarded as a government pension and will be taxed in the UK but if I`m resident in France I wont be eligable for UK health care, so just what is my tax paying for?[/quote]

Tax on your pension is the norm for Government UK pensions you will be given a credit for this amount against your French income tax due, you will not pay NI on your pension income when you re-locate to France, perhaps NI is what you mean when you say 'tax'. Apologies if not.

[quote]What other taxes and the like would I be expected to pay in France?[/quote]

Taxe Foncieres- depandant amount on time off purchase , Taxe d'Habatition - proportionate for the year at time off purchase (peut-être), TV license, are you immediate concerns, other taxe in France are somewhat dependant on personal circumstances, whereby I suggest you consult a professional who has experience in both UK and French taxe systems. 

[quote]Then theres health care, whilst I will be able to utilise the E106 system for the best part of 2 years the prospect of private health insurance is quite daunting. I suffer from asthma, and whilst it is only very mild and has been under control for many years I will have to include this on any application I make which will in turn, up the premium no doubt.[/quote]

Whey up the quotes v's the years to natural retirement, if all seems reasonable and affordable......

[quote]Is it worth it? [/quote]

When you get to France stress free - totally YES.

Bonne change.

[Mozman]

My dear old dad...a builder for more than 70 years....used to say 'There is always another house!"

He was right you know.

Sell your house. Know how you stand financially and the extent of your budget (bearing in mind a  cushion in the bank against the unforeseen) THEN go shopping. Believe me ( and my dad)...there will be lots of interesting, exciting and suitable houses for your needs when you do!

[Panda]

[quote user="Pads"]

Hello Dexter

 It will always boil down to money at the end of the day, and there are many swings and roundabouts on that subject, we have found that by just the saving we are making in local poll tax( i know its not called that now but I cant keep up with all the names its had [blink]) we can purchase our health insurance.        

[/quote]

Pads, do you mean full private health cover for the difference between council tax and tax fonciere in France, surely not??  Most people are quoting upwards of 3k per year.  Perhaps you mean for the top up, that would be 'on average' 1k per year, is that what you are referring to???

On the main point of the post, I would hold off, with the UK market cooling and the Brits in France facing a big change things could be very difficult and there may well be a bargain or three around in 6 months time.

[Sunday Driver]

The biggest concern for anyone currently considering a move to France must now be healthcare.

Unless you have guaranteed employment/self employment in France, or you are are receiving a UK old age pension, then you really need to think hard about the move.

You would be trading your UK rights under the NHS (where everything is covered and paid for regardless of condition) for potentially no French state funded rights and future reliance on private insurance with all the attendant risks of future exclusion in the event of serious illness.

Yes, you can get an E106 which gives you French state cover for up to two years, but after that, you'd be essentially on your own.......

 

[AnOther]

I guess I could consider myself more fortunate than some in the current scheme of things.

The only real downside for me is that I'll have to carry on working for a bit longer than I'd hoped.

Essentially, because I'm still working (2 weeks on/3 weeks off rota, or 60 % retired as I like to refer to it [;-)]), then as long as I continue to do so, and for 2 years afterwards, we're covered on an E106.

Assuming the 5 year rule works then if I work for a further 3 years followed by 2 years on E106 then we'll be in the pink [:D]

[Pads]

[quote user="Panda "][quote user="Pads"]

Hello Dexter

 It will always boil down to money at the end of the day, and there are many swings and roundabouts on that subject, we have found that by just the saving we are making in local poll tax( i know its not called that now but I cant keep up with all the names its had [blink]) we can purchase our health insurance.        

[/quote]

Pads, do you mean full private health cover for the difference between council tax and tax fonciere in France, surely not??  Most people are quoting upwards of 3k per year.  Perhaps you mean for the top up, that would be 'on average' 1k per year, is that what you are referring to???

On the main point of the post, I would hold off, with the UK market cooling and the Brits in France facing a big change things could be very difficult and there may well be a bargain or three around in 6 months time.

[/quote]

Yes panda I mean top up, if we move over in the next couple of years as is my plan (see seperate plan if your talking to hubby)[:$] then Hubby will still be working as he can live any where to do his job. so we will only need the top up. and the difference between the two countries poll taxes comes to just over 1000 pounds, over the years he will cut down on the amount of work hes dose until he retires.

[dexter]

Many thanks to all of you for you comments and observations.

After weighing up all the pros and cons of continuing with the purchase, it was with a heavy heart that I decided to walk away from it.

I enquired if the vendor would agree to a suspensive clause in the contract on the sale of my house being competed and  was informed that he was prepared to wait until the middle of March.

The projected completion date on the contract was 28th February!

The most disappointing thing to me is that if he were prepared to wait then we both would be in the situation that we want to be in. He has a new build property near to the house I was interested in and a mortgage on it that he can clear with the sale. I would clear my UK mortgage and be starting a new life in France.

Now he`s back to square one with a property that had been on the market for nearly 12 months and even if he were to get a buyer tomorrow wouldn't complete until I suppose next April!

His prerogative I know, and a lot would depend on the speed of my house sale.

So it`s back to square one for me, albeit with some valuable experience and who knows, perhaps if my house sells sooner than I think and a certain property in France is still on the market ...............

Once again thanks for all of your comments. 

[Deimos]

Whilst you have made your decision I will still add my 3d worth on one aspect.

I think that the health changes for inactifs in France needs to be kept in perspective.  After all, what the French system is moving to is actually what has been happening in Spain for many years and people have not been dying in the streets uncared for.  In fact the majority of the problems in Spain seem to have been from people moving there and just doing nothing as far as health cover was concerned, waiting until they became ill and that is when the problems arose (though I am now 4 years out of date regarding the Spanish situation).

I am against the healthcare changes for a number of reasons, in particular the aspect where people have already taken up residence in France and are having the rug pulled out from under them ("so to speak").  For people considering moving here it is just another aspect to consider and budget for.  From a cost perspective it seems probably that the private insurance will be needed after the E106 cover (often 2 years) until you have been resident for 5 years (EU law but still "to be decided" by the French authorities).  Then add in that for some/many/a few/lots (nobody really knows the numbers though probably not lots) the private health cover will actually be cheaper than CMU-B+top-up.  Maybe the cover will not be as good but it will be cheaper.

I think for people considering moving to France (or even within the UK) a balanced approach is necessary. There will always be positive and negative aspects and if you cannot see both then you are probably missing something.  They offset each other and where the balance lies depends on you own position and attitudes.

You get many who go on about how terrible France is and others who see only the fantastic aspects.  Both are right - they are just focusing on different aspects and we all do that with everything in life.  For me France is great and I love it here.  But that is due to the sum of who I am, my circumstances, etc.

Ian

[Nicos]

Do you really want to move to France full time, or have you considered  two smaller houses, one in France and one in GB?? That way you are still covered by health insurance over here and could rent out the English house on short term rent for 1 day less than half a year.

Do you have family commitments you may regret breaking ?

It could be a best of both worlds situation...

[bigears]

hi

I have read through the replies offered to you here.  You have been given some good advice, please consider it carefully.  I don't know your personal circumstances, so don't know if this suggestion is possible for you.  Please ignore it if its not. 

Sell your uk home and buy something (dwelling)  much cheaper to live (in uk), preferably with 12 months occupancy and an address (some mobile homes do not have this).  Spend time choosing the correct propery for you in france.  Develop a lifestyle that suites you between france and the uk.  Stay resident in the uk, if you wish you can work in the uk.  Be aware that there is the 183 day rule that is part of the criteria that defines residency. 

If at some later date a total move to france is what you decide you want to do, do it, at least then you will be making a well informed decision. 

Please be aware when/if you become a tax resident in france all the implications of how french tax will affect your wealth, consider the present and the future, look particularly at down the line issues and consider how they will be treated by the imports people.  For example its my understanding that frozen pension lump sums, endowment payouts and  ISA/PEP income will all be taxed if they appear on a french tax form.  Always be aware and be informed.  France is a wonderful place to spend quality time but do your homework first. 

[Monika]

I agree 100 % with Nicos, with two properties (even if they are more modest) you keep your options open and you would indeed have the best of both worlds. You always have something to look forward to and will never get tired of your two chosen countries.

[AnOther]

Good enough advice bit I'm curious as to what you mean by "frozen pension lump sum" ?

When you take your pension you either take a tax free lump sum or you don't, you may have the option to postpone, (freeze), the actual annuity but the lump sum is paid out there and then.

This was one of my issues prior to moving over but in the event it turned out that the rules of my present company pension didn't allow me to take the lump sum without taking the annuity at the same time which was something I didn't want to do and was not to my advantage in the great scheme of things..

[bigears]

hi again

ErnieY, I only know about public sector type pensions.  I took mine at 55 with a big hit rather than freeze the whole pension until 60.  That was what I was referring to.  If you are tax resident in france when you finally take such a frozen pension, I believe the lump sum is taxed. 

[cooperlola]

Yes, Bigears, that is true.  My o/h took his pension before he left the UK and was not taxed on his lump sum.  My pension began to be paid six months into our residency, so I took it all as pension, with no lump sum, to avoid its being taxed immediately.  It's certainly something that needs to be considered.

[caroline]

I am just about to apply for a bridging loan - for the same reason, and now I've read these posts I'm thinking again. I had thought that I don't want to waste the time - having to look again, travelling to and fro between France and the UK, maybe not finding somewhere suitable for months, so I thought better to go for it and to do everything to improve the chances of selling my house here.   I was planning to speak to the Estate Agent about this. There must be ways to make ones house stand out above others - whether it's in the presentation or improvements or the selling price?   I think you can have some influence upon when you sell your house. However, having said this, it depends what it is worth to you, because every month there is a bridging loan, I think the house is France is effectively costing more.  I too want to move over in the Spring of 08 and it's a difficult choice. I am suprised reading the comments here, how weighted the advise is against taking out a bridging loan ! Personally I looked at the alternative and asked for a clause to be put into the contract that the house sale would go through when my house here sold, but they said NO !.    I think therefore, like you, I can either leave it to chance, and let the house in France go back on the market, and hope mine sells before it does - or I can pin this down.  Whatever choice I make, I don't think anything is likely to move now before January - so in a way there is no great need to make a decision quickly ?  I wish you luck and will be interested to know your decision.  

[AnOther]

I think you're right to hold off although for the sake of information there may be a 3rd option.

In France it is possible to get something called a "pret a relais" which is the equivalent of a bridging loan but with much lower interest rates than in the UK. The drawback is that these have a limited life of 2 years I think.

Someone else may be able to elaborate.