Cost of owning house in the Dordogne

[ScruttonStreet]

First, I have already learnt a lot of information here, so thank you for everyone who contributs to this forum. Second, apologies if this has been asked before - I had a quick look but can't find anything.

My wife and I have been going to the Dordogne (expensive area I know) for the last ten years, and sometime in the next couple of years we'd like to buy. Ideally we'd be looking at around E450k.

In an ideal world we'd like to use it as a second home but rent it out sufficiently to pay the bills. But I have no idea of the sort of costs owning a house as an oveseas user would be. Particularly in terms of:

Utilities

Tax

Phone/internet

Insurance

Maintenance

Property management/pool maintenance

General running costs

Anything I haven't thought of

I appreciate this is very general, but could anyone hazard a guess?

[andyh4]

How long is your piece of string?

 

As a very rough guide, think about the total package of costs being about the same as for an equivalent property in the UK.   Some things will be more expensive and others cheaper.  Also consider that my response is based on the current exchange rate.  If (or rather when) this changes, then the costs will change proportionately.

 

Things you may not have thought about:

water is metered and depends on your usage and sewage treatment likewise will be based on your water usage (if you have mains drains of course).

Cost of running a car are likely to be higher, not because the unit costs are higher, but because you are likely to find that you have to travel much further to do the things that you currently find on the doorstep.

[ScruttonStreet]

Thank you for the reply Andy. In our case that would mean

E220 a month for gas, electricty and water

E60 a month for phone/tv internet

E200 a month in council tax

E100 a month for insurance

E150 a month for general maintenance/sink fund

E150 a month for house management (we let our house out a couple of months per year in London and this is what we pay the firm)

Does that sound about right?

[EuroTrash]

Sounds to add up to a reasonable length for a piece of string, on average. The "gas/electricity/water" sounds possibly a little low for powering and heating a large house if it's going to be used through winter. Piped gas is unusual in most areas so you'd be looking at oil, all-electric or solid fuel heating, and none of them is cheap. But the 100€ for inurance sounds generous (though is it higher if you rent it out?) and the phone/tv/internet should be nearer 40€. Property taxes are the wild card, you need to check this before you settle on your property.

Don't forget there would be income tax to pay on the rental income, so you'd need to build that into the calculation as well.

[YCCMB]

Some will say your council tax (or taxe d'habitation/taxe foncier) is too much. I'd say it's about right. Some people pay amazingly little for that, we pay more than in the UK. Plus refuse collection, billed separately.

Swimming pool maintenance can be expensive even if you DIY: spares and repairs are pricy.

I don't think the Dordogne is any more expensive than anywhere else, especially, as much of the pricing for taxes, water etc., is set locally so within any Dept. costs will vary enormously.

[Hoddy]

I'm not sure if this is helpful because my house is worth nothing like as much as £450K but .....

E40 a month for electricity & water - a little on bottled gas

E55 a month - this varies a lot from commune to commune

E34 a month for insurance - much better deal from a local broker than from our bank.

This is based on the house never being let and us being in residence from April/May to the beginning of September.

Phone and internet are the subject of debate and dispute so I'll not give a figure.

Hoddy

[Patf]

I would agree with the above estimates for basic running costs. But if you plan to rent it out the returns might not be as high as you hope.

From what I've heard short term rentals can lead to many unexpected expenses.

For one thing, you should declare the income from rentals to the french tax people. That would involve a full declaration of your other UK incomes etc. Not to mention repairs, cleaning, arranging lettings etc.

[YCCMB]

Pat is right. We rented our house out a little for the first couple of years. In relative terms we were quite lucky, but nevertheless there wasn't a single rental where something didn't get broken/go missing/need replacing. And when you are in the UK and someone phones you at 5 pm on a Friday evening to tell you the swimming pool's gone green, and no-one is going to be able to get to it and do anything till at least Monday.....good luck!

[HoneySuckleDreams]

We pay around €2000 a year tax habitation/fonciere - but the house is around 250msq and we have a pool - this will depend on the commune and a few other things. As someone has already said above - check your facts. Oh, and be careful if the figure is very low as more likely than not the house may have been renovated and the officials never notified. So the first time you try and change something and declare the correct size/space/usage of your house the cost will go through the roof.

other costs

- boiler maintenance €100 a year

- chimney sweep €200 a year

- we have oil heating and use it sparingly (November to End of Feb ) - costs us around €700 a year

- wood for heating - we source ours through the commune and costs 13€ a cube (but we do all the work chopping/logging/storing), if you need to buy wood for heating and don't have a source of your own, you could be looking at 50€ a stair - we have a big wood burner and it chews through 10 stair a year.

- we find insurance is more than we paid in the UK (both car and house)

[EuroTrash]

Re the income tax, AFAIK if you are a non resident it is only your income from France that is taken into account, the fisc are not interested in any income in the UK, and you can simply pay rax at a flat rate which I believe 20 per cent on profit.

[Pickles]

ET: you forgot the social charges: hence at present 20% tax PLUS 15.5 % (and rising?) social charges. And remember that although you get a tax credit in the UK for the French tax paid, you don't get a credit for the social charges.

Grrrrrrrrr.

[Cendrillon]

As has been mentioned recently in another thread don't forget to factor in the ease and the costs of going back and forth to your second home.

[Patf]

[quote user="EuroTrash"]Re the income tax, AFAIK if you are a non resident it is only your income from France that is taken into account, the fisc are not interested in any income in the UK, and you can simply pay rax at a flat rate which I believe 20 per cent on profit.[/quote]

OK thanks I didn't know that, so not so bad.

[EuroTrash]

Not so good if you add the social charges on though, Do you really have to pay social charges if you aren't even in the French sécu system? I never realised that.

[Cendrillon]

"Do you really have to pay social charges if you aren't even in the French sécu system? I never realised that.

"

Unfortunately you do, this is a fairly recent thing.

[Pickles]

ET wrote [quote]Do you really have to pay social charges if you aren't even in the French sécu system? I never realised that.[/quote]

Oh, yes, indeed you do, since last year. That wouldn't be so bad if you got a tax credit for it in the UK as you do with income tax, but you don't. Hence my "Grrrrrrrrrrr"

[Sprogster]

If you need to rent out your second home to cover the costs, then you are taking a significant risk, if you struggle to find renters. Also the French have started to charge 15.5% social charges on non residents renting or on gains when selling French property, which other countries including the UK will not accept as a tax and allow as a tax credit.

From my experience, you budget an overall number and then double it, as there is always the unexpected maintenance item.

[Pommier]

You've got quite a big budget, so if I were you I'd spend quite a lot less and not rent it out - just use it for yourself or friends and family. You save then on the tax, the stress, the cost of changeovers/cleaning, plus if you decide to sell up you haven't put so much of your capital at risk - and the Dordogne being an area with significant numbers of UK owners, if anything goes wrong (closure of Bergerac airport, fluctuations in exchange rates etc) you could be in a position where values are falling.

[suein56]

[quote user="Pommier"]You've got quite a big budget, so if I were you I'd spend quite a lot less and not rent it out - just use it for yourself or friends and family. You save then on the tax, the stress, the cost of changeovers/cleaning ... [/quote]

I think Pommier has hit the nail on the head.

France is very different to the UK in many ways and the housing market is one area where the differences can be huge.

Sue

[EuroTrash]

I agree with the 2 previous posts.

Another factor to consider is that property prices don't tend to go up in France. Investing that amount in a UK property might make sense because you would hope to see a return on your money, and you could argue that your money will work harder for you if you invest in property than if you leave it in the bank. But that's not necessarily the case with property in France. You might get your money back if you or your heirs sell some way down the line, or you might not. You're unlikely to make a significant profit just from buying and selling and not even guaranteed to make a profit if you carry out improvements.

[YCCMB]

[quote user="EuroTrash"]I agree with the 2 previous posts.

Another factor to consider is that property prices don't tend to go up in France. Investing that amount in a UK property might make sense because you would hope to see a return on your money, and you could argue that your money will work harder for you if you invest in property than if you leave it in the bank. But that's not necessarily the case with property in France. You might get your money back if you or your heirs sell some way down the line, or you might not. You're unlikely to make a significant profit just from buying and selling and not even guaranteed to make a profit if you carry out improvements.[/quote]

And even if you do make a profit, most of it will be eaten up by the taxes imposed on the sale of second homes! :-)

[PaulW]

[quote user="Pommier"] and the Dordogne being an area with significant numbers of UK owners, if anything goes wrong (closure of Bergerac airport, fluctuations in exchange rates etc) you could be in a position where values are falling.[/quote]

Closure of Bergerac airport. Do you know something I don't?

[mint]

Well, maybe not closure of Bergérac airport but Flybe flights from Southampton look vulnerable to me.

[Hoddy]

It doesn't have to be Bergerac. Friends of mine whose family live in London, use the City airport and fly to Brive.

Hoddy

[Sprogster]

Hoddy, if I were your London friends I would be worried, as the summer service to Brive is a slot parking exercise by Citiflyer, as their owner Air France desperately seeks a buyer for this loss making subsidiary.

With slots at the busiest British airports if you don't use them, or sell them you lose them and they are therefore a valuable asset on Citiflyer's balance sheet and will almost certainly be used on a more valuable business City destination when sold.