buying for a holiday vs permanent home

[euroman]

Hi,

We want to buy a house in France and wish to know the fundemental differences between buying for a permanent residence as against a holiday home, can someone advise please?

Regards

Steve and Jill

[Pickles]

[quote user="euroman"]We want to buy a house in France and wish to know the fundemental differences between buying for a permanent residence as against a holiday home, can someone advise please?[/quote]

There aren't any fundamental differences in the purchase process. On an ongoing basis, you may wish to have bills sent to your UK address, and you will not be eligible for any reductions in the taxe fonciere or taxe d'habitation as it is a holiday home.

There are "leaseback" properties available in some resort areas ... where you buy the property but lease it out to a managment company which then lets it out on holiday lets, whilst you retain the right to use the property for a couple of weeks a year. If you are thinking of going down this route, then think LONG and hard before committing - some are OK but others have become nightmares for their owners.

Regards

Pickles

[La Guerriere]

If you are buying as a holiday home consider how far you want to go to get to it. It is not a good idea to assume that low-cost airlines will always run to where you want to go, and even ferries rise and fall according to demand. We have had a res. secondaire in Manche for 15 + years and we went there because we could rely on good transport links, and we go regularly ... nearly every month. But you also have to remember that Manche is not that far South and there are very good reasons why the countryside is lush and green ...

[Quillan]

Big gardens - If its a holiday home then don't buy a place with acres of garden because it needs to be tended and the grass cut. Now I am not saying that all people who look after gardens are dodgy but several houses round here have people come in and cut the grass. They seem to come a few days before they arrive but they are supposed to cut the grass every other week and they don't although the owners still seem to be paying for it and its not cheap. Another family cut their own grass when they arrive, they seem to spend the first 5 or 6 days cutting the grass and putting the garden in to order, sit in it for a further few days then go back home knackered which seems a bit pointless to me but there you go.

[La Guerriere]

Agree on the subject of gardens. We have the bruises and the shed of dead mowers to prove the point. And you would never believe how fast the grass can grow in Manche ...

[AnOther]

I suspect the question may have been more to do with any legal implications than the fairly obvious merits and demerits of being there full time or part and who's going to cut the grass [Www]

[La Guerriere]

AnOther you are probably right, but as far as I am aware, a house is a house and there are no legal, tax or other differences between a holiday home or a principal residence. If there are I have yet to find them.

[AnOther]

I wonder why it is then, when buying, that the Notaire asks whether it is to be a primary or secondary residence ?

Also, whilst it's true that it takes more than one word on piece of paper to make a home a primary or secondary, is there not at least potential for different treatment over CGT on a subsequent sale ?  

[bubbles]

don't remember our notaire asking us.

[Pickles]

[quote user="AnOther"]I wonder why it is then, when buying, that the Notaire asks whether it is to be a primary or secondary residence ?[/quote]

Interesting. Ours didn't ask that - although it was also quite evident to him that ours was to be a holiday home - and it is not recorded in the acte authentique for our place.

[quote user="AnOther"]Also, whilst it's true that it takes more than one word on piece of paper to make a home a primary or secondary, is there not at least potential for different treatment over CGT on a subsequent sale ?[/quote]

As long as the property is your primary residence at the time that you sell (best established by tax records) then there would be no CGT to pay even if the property was originally bought to be a holiday home. Of course, as you know, if the property is not your principal residence at the time of sale then CGT may be due.

Regards

Pickles

[Quillan]

So if I go to my local tax office, ask for a tax declaration form, complete it and give it back today I can sell my holiday home as my primary residence tomorrow and not pay CGT? I'm not try to catch anyone out here but it seems too good to be true, surely there must be some time period included before you sell like a year or something.

[P-D de Rouffignac]

The main difference between buying a French property as your principal residence or as a second/holiday home is its treatment on re-sale for French capital gains tax. Your 'main or principal home' is exempt from CGT and its status is normally established by the Notaire handling the sale (who also acts as tax gatherer for the French government) using evidence such as your integration into the French system (registered for tax, registered in the French healthcare system, evidence of utility bills etc).

As already noted other local and property taxes are the same, but in the case of a principal home, as you advance in age and/or are on a low income (such as the British pension!),  there are reductions and exemptions applicable

[Pickles]

[quote user="Quillan"]So if I go to my local tax office, ask for a tax declaration form, complete it and give it back today I can sell my holiday home as my primary residence tomorrow and not pay CGT? I'm not try to catch anyone out here but it seems too good to be true, surely there must be some time period included before you sell like a year or something.[/quote]

Well, if it IS your primary residence at the time of sale, then yes - though as P-DR notes, it is the notaire handling the sale who has to be convinced. I wasn't suggesting it as a ruse, but there are those for whom what was purchased initially as a holiday home becomes a home to which they subsequently retire.

Regards

Pickles