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Can you own a holiday home in France and not go bankrupt?


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Hi all, it's my first post here.

I live in the UK and have a young family. I'm considering buying a place in France to use as a holiday home for my family and friends as it's been a long-term ambition to have a place for the kids and their friends to spend their holidays.

I have bored lots of friends/relatives on this topic and have not had many positive responses. A few relatives have had holiday homes in the UK and abroad and are quick to recount stories of ducks nesting in roofs, flooding mills, continuous DIY, grass cutting etc. My folks had a holiday home in Lyme Regis when we were kids and most of what I remember is Dad puttying window frames and Mum mowing the lawn but we had a great time there. Most of the feedback I have had so far is along the lines of: "I hope you have deep pockets".

I appreciate that the sensible thing to do is to book a place on AirBnB for 4-6 weeks in the summer and pay for the convenience and chop and change the locations to my heart's content.

However, there's a box I want to tick and that's owning my own place abroad. I am fortunate enough to earn a good salary - but I'm not daft enough to plough on with ticking this box if it will bankrupt me. I've read some pretty good / scary articles on French tax for UK residents and it looks fairly er.. taxing.

I have a few questions for the old hands here:

1. Is it possible to buy a place in France and outsource the holiday rental and management to minimise my hands-on time?

2. Does anyone have any stories of owning a holiday home that makes them a decent profit? (Surely someone does!)

3. Are the standing costs for owning a house in France the same regardless of location? 

4. Does AirBnB make it easier or harder to rent your place out?

5. Are there any questions I've not asked that I should be asking?

Thank you, Ben

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Don't do it.

Forget about it my friend.

You won't go bankrupt (well you might if it all goes tîts up) but you will regardless lose an awful awful lot of money.

That is a fact.

Anyone that tells you differently, are lying through their teath. Or working on the black.

 

 

 

 

 

 

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3 hours ago, BenC said:

1. Is it possible to buy a place in France and outsource the holiday rental and management to minimise my hands-on time?

2. Does anyone have any stories of owning a holiday home that makes them a decent profit? (Surely someone does!)

3. Are the standing costs for owning a house in France the same regardless of location? 

4. Does AirBnB make it easier or harder to rent your place out?

5. Are there any questions I've not asked that I should be asking?

Salut.

1. Sure you can.

2. I know there are but whether they'd recommend now as a time to invest in French property is something I don't know. While the FR property market values are generally (with exceptions) very slow-growing, the turnover of rural properties is quite high atm due to French city dwellers suddenly deciding a rural bolthole isn't a bad thing in Time of Covid. So you would be buying at the top of the market.

3. No. For eg, the equivalent of Council Tax varies according to location. Other taxes may vary too depending on what you buy or do to it. Turning outbuildings into gîtes is also far more complicated and regulated than it used to be.

4. Airbnb gets your place in front of would-be guests but there are +ves and -ves to using Airbnb exclusively. You still need a trustworthy caretaker. And Airbnb will be superseded by something else eventually because that's what happens.

5. Oh loads! ?

Imo - if you are determined to purchase as a holiday let which your family will use from time to time, don't start from scratch. Buy an existing business because then you'll get an idea of actual returns over the years rather than best guess. You would probably inherit the renting infrastructure too - property managers, cleaners, emergency call out people for when guests do something stupid...

Finally, there's an independent holiday rental owners forum you could take a look at -

https://www.laymyhat.com/forum/

It's quieter than it used to be a few years ago, but you may still find some useful information there.

Edited by Catalpa
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18 hours ago, anotherbanana said:

That is the opinion of our resident expat basher, pessimist and general grump who is, by the way, a Brit. The answerr to your questions are that it all depends. Others will give their opinions, doubtless.

I am not grumpy.

I have done the maths on this many times.

It can't be done. 

You may break even, but do you really want to sleep in the bed in your own house that has been slept in (and many other things done in YOUR bed) by so many other people ?

Do you really want that OP ?

No of course you don't.

Yuk.

Just imagine what they are getting up to in your bed.

That ain't worth trying to break even. 

 

 

 

Edited by alittlebitfrench
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13 minutes ago, alittlebitfrench said:

 

You may break even, but do you really want to sleep in the bed in your own house that has been slept in (and many other things done in YOUR bed) by so many other people ?

 

 

 

 

But, but, but, do you never stay in hotels ALBF?  

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4 hours ago, betise said:

But, but, but, do you never stay in hotels ALBF?  

Yes, yes, yes...but, but, but....I don't OWN the hotel do I ?

 

And that is the point.

Am I losing money ? 

NO !

Do I lay in bed wondering what peeps have done in MY nice bed ?

No !

A hotel is a hotel. A home is a home. 

 

 

Edited by alittlebitfrench
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Yes is the answer to your question providing you are prepared to let  it out,

when not using it yourselves.

We have twice bought apartments in the Nice area and used property managers

to rent them out and turn them over for us. Both properties have generated enough income for us to

pay all our taxes, incidentals etc and holiday expenditures. Our latest property is in Cagnes-sur -Mer.

We only use it in April/May/June and Sept/Oct/November and let the renters have it

in the high season and over the Christmas period (It's right next to the Hippodrome so  used by horse

owners during the winter racing season.)

This time we bought an easy-to-maintain, minimalist. modern, two-bed property with a communal pool and

landscaped gardens. It's been brilliant so far (three years) and as long as you don't mind the odd

breakage here or there it works very well.

I would imagine an owning an older , rural property would be a different kettle of fish.

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12 hours ago, Bessie said:

Yes is the answer to your question providing you are prepared to let  it out,

when not using it yourselves.

We have twice bought apartments in the Nice area and used property managers

to rent them out and turn them over for us. Both properties have generated enough income for us to

pay all our taxes, incidentals etc and holiday expenditures. Our latest property is in Cagnes-sur -Mer.

We only use it in April/May/June and Sept/Oct/November and let the renters have it

in the high season and over the Christmas period (It's right next to the Hippodrome so  used by horse

owners during the winter racing season.)

This time we bought an easy-to-maintain, minimalist. modern, two-bed property with a communal pool and

landscaped gardens. It's been brilliant so far (three years) and as long as you don't mind the odd

breakage here or there it works very well.

I would imagine an owning an older , rural property would be a different kettle of fish.

Apartments work well to a point.

But, when the facade of the building needs to be redone, the lift needs to be replaced or any other major work (swimming pool...building defaults) that you will have to contribute to through the copropriete, all the money that you have made (or broken even with) previously has been wiped out. You may even (not you) face bills that you can't pay.

Also, this only works if you have bought the place without a mortgage. A flat in Nice or Cagnes-sur -Mer of the type that your are talking about must cost in the region of 250-300 k. Probably more... I would love to know.

Add in the cost of the mortgage (and Notaire costs) and the flat has now cost you 400 k-500 k. The thing is, the flat will not appreciate in value over the life time of the mortgage to cover the intial Notaire fees and the mortgage repayment costs. So you have effectively lost that money. 

So yeah. For me the maths don't add up.

 

 

 

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If the OP has the money then why not, for a house suitable for rentals you'd be looking at 300-400K depending on location which would include all the fees. 

The musts for me would be - 3/4 bed in good condition, pool (preferably heated), near facilities, within an hour of the coast, within an hour of an airport and close to autoroute, smallish garden.

Perhaps the most important thing is how often will you use it yourself and are you tied to school holidays which are the peak rental periods. 

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6 minutes ago, DraytonBoy said:

If the OP has the money then why not, for a house suitable for rentals you'd be looking at 300-400K depending on location which would include all the fees. 

The musts for me would be - 3/4 bed in good condition, pool (preferably heated), near facilities, within an hour of the coast, within an hour of an airport and close to autoroute, smallish garden.

Perhaps the most important thing is how often will you use it yourself and are you tied to school holidays which are the peak rental periods. 

Or.....

We have a flat in LGM (200 metres from the beach and it has a maintained huge wimming pool) it would cost to buy about 150 k. Simillar to the property of Bessie.

We don't rent it out. The running costs are the running costs. But the bed is ours ! No one is shagging in my bed. We can go anytime we want. 

The OP could buy similar and save 150 k - 250 k on a full rental property that Drayton boy describes. Put that money to work in the UK to pay for the yearly costs of the flat in France.

Also, the last thing you want to do when going on holiday is to mow a lawn. 

 

 

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The OP has a young family so a flat isn't going to work, my guess is that they want something with a bit of privacy where the kids can splash about in their own pool. Maintenance would be done by a local business and the running costs subsidised by renting the property.

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1 hour ago, DraytonBoy said:

The OP has a young family so a flat isn't going to work, my guess is that they want something with a bit of privacy where the kids can splash about in their own pool. Maintenance would be done by a local business and the running costs subsidised by renting the property.

I have a young family. We go there with three kids. No probs. 

Remember, kids don't stay young very long. They won't want to go to rural France above a certain age. So you end up with a large empty house that you have to maintain. 

In terms of our flat, I drive down to Montpellier, park the car, take the lift, open the door, turn on the elctricity, and open the shutter. That is it.

We have a panoramic view of the mediteranean sea, a private olympic swimming pool (maintained and hardly used) and beautiful maintained garden.  Endless things to do and visit. 

We can rent it out easily for 700-1000 euros per week.

Rent it out 4 times and you have covered your expenses. 

A typical flat of that nature will cost 150 K. 

* If I could attach a picture I would show you what I mean. But I can't. 

 

 

Edited by alittlebitfrench
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Hi everyone, thanks a lot for your replies. I came here to get advice from people who have 'been there, done that' and your replies have been great.

Having other people in my bed isn't an issue for me. I stay in hotels 20+ times a year for work and I don't spend too long thinking about what's been going on in that room - but I do understand the point that if you rent it out it's not entirely 'your' home.

I own Buy to Let properties here in the UK and get that these things have to be done with a spreadsheet and they don't run themselves. I also understand that the wear and tear on a rented property is a real consideration. Multiply that by a property that's hundreds of miles away, Brexit and a schoolboy grasp of French and it's a decision I have to think hard about.

I completely get the point about the kids growing up and not wanting to visit. They are both under 4, so I hopefully have a decade or so and then I can look forward to being able to bolt there myself.

I had considered an apartment and briefly looked into leaseback in a ski resort (partner loves skiing) but we like the ability to ski in different resorts, so the fixed location has more downsides than upsides.

Other posts have hit the nail on the head. The idea is a place where the kids can splash about in the pool, we can wander into town or drive to the beach and friends and family might occasionally come to visit and stay locally (or on site). We make it a house and an area we invest time in and get to know well.

Another stumbling block is trying to find locations that fit the: '1-hour to the beach, from the airport, walkable to a nice small town and within budget' criteria. To be honest, the more time I spend in Google Maps, the more I'm paralysed by choice.

Before we had kids (and lockdowns), my partner and I visited France a lot. We have done a fair few weeks and weekends across France on a motorbike and we have had great stays throughout, from Le Crotoy, to Questembert / Malestroit to Riberac and Tarascon.. all brilliant places, with next to nothing in common when you write down their positives and negatives. Still, that's one for me to try and crack.

Your shared experiences on property ownership really help me build a clearer picture.

 

 

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9 minutes ago, DraytonBoy said:

That works for you, the OP is looking for something different.

The OP has not really told us what he wants. Apart from making money. 

IMHO, the British model of buying a rural property in France as a holiday home/rental property is very 'British'.

It is also a bit 'has been' and makes no financial sense and will largely be one big costly headache. 

The 'French' model is the better one. One phone call to an estate agent and our flat is sold within 24 hrs. People will buy it to rent it out. Whether they make money is a different matter. 

You can't say that about rural properties. 

 

Anyway, how does the OP rent out the house legally anyway ? You have to declare the income you gain through renting it out and pay taxes in France. That means a business structure in France which can only be set up with a CDS.

The OP won't quallify for a CDS. 

This this is a pointless debate anyway. ?

 

 

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10 minutes ago, BenC said:

 

I had considered an apartment and briefly looked into leaseback in a ski resort (partner loves skiing) but we like the ability to ski in different resorts, so the fixed location has more downsides than upsides.

 

 

 

That is your best idea IMHO. The kids will love it. 

Alpe d Huez is a huge skiing domaine. You don't get bored there. 

Brilliant in the summer as well. 

And in November when the first snow falls. 

There are two pools. One outside. 

Give the keys to the skiing apartement to your friends in the UK and ask them to make a donation to your costs. Tell them to take their own bed linen.

Et voila.

 

BTW...get over the idea of having your own pool. Waste of money op. 

 

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26 minutes ago, alittlebitfrench said:

Anyway, how does the OP rent out the house legally anyway ? You have to declare the income you gain through renting it out and pay taxes in France. That means a business structure in France which can only be set up with a CDS.

 ?

 

 

With respect albf that is complete twaddle.

France has a separate tax department that deals with non residents and it is fairly painless for non residents to declare their rental income in France and pay their taxes. You don't have to set up a business to rent out one holiday home.

If he fancies doing this and he can afford it and it will give him pleasure then why not.

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1 hour ago, [email protected] said:

With respect albf that is complete twaddle.

France has a separate tax department that deals with non residents and it is fairly painless for non residents to declare their rental income in France and pay their taxes. You don't have to set up a business to rent out one holiday home.

If he fancies doing this and he can afford it and it will give him pleasure then why not.

Twaddle is my middle name.

Are you sure ET ?

Can you explain to me how this works ?

So I can own a house/flat in France and employ a French company to manage it on a rental basis ?

How exactly do I pay taxes that I am due to Mr Macron being a tax resident of the UK ?

Through a 'seperate tax department' in France you say.

But how do I find this 'seperate tax department' in France ?

I have pigeon French BTW. 

 

 

 

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It always used to be this lot

https://impots.dispofi.fr/centres-des-impots/service-impots-particuliers-non-residents-centre-finances-publiques-noisy-le-grand/a-457afd

it was a whole separate department, they issued different forms, had different deadlines etc, and non residents tax is calculated differently obviously.

But the tax office has reorganised itself this year hasn't it so I don't know if it is still the same address, I am afraid you will have to google for yourself if you really want to know (or ask your kids to do it for you).

You're burbling though - there are lots of non residents, Brits and other nationalities, who own and rent out property in France, and/or run other types of business in France, some of them no doubt visit France from time to time under the 90/180 Schengen visa waiver or on a tourist visa and I suppose some never set foot here. It's not a problem, France is quite happy for non residents to invest in France and pay tax here. The issue is if those people want to actually live in France, that's when it gets more complicated. Owning rental properties or having business interests in France does not automatically give you the right to live here.

Just like there are lots of Brits who live in France but get their income from renting out properties in the UK. They pay their tax on the rental income in the UK, as non residents. Being liable to tax in a country and being regarded as tax resident in that country, are two separate things.

What income gets taxed where is all set out in tax treaties, loads of people pay tax in two or more countries, it's not too unusual. I guess every country has a system for taxing non residents. I am sure you know all this if you stop and think about it - give your head a good shake and get the marbles back in their right places.

 

Edited by [email protected]
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We have a property management business here and several non French clients rent their properties in the summer months, they declare the rental income, are given a fixed allowance for costs and income tax is paid on the profit, it's that simple.   

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