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Buy to Let in france?


Crevette

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The entrepreneur in me sometimes wonders about buying to let a flat in Paris.

My reasoning is as follows ;

i) Being an english speaker, living in paris, it would be easier to rent out to the large english speaking community

ii) Paris is always popular - and seems to be becoming more popular (hotel rates up about 30% in the last two years, tourists up on last year, etc.)

iii) I have a friend who already does this who has built up a list of reliable contacts for plumbers, electricians, etc.

Does anyone out there do this? What sort of yiled can be achieved? What are the pitfalls?

One thing that sends out warning bells is that I read the following ;

"Tax on rental income.
Letting furnished accommodation in France is governed by civil law from a legal standpoint, but for tax purposes it is regarded as a commercial enterprise. Therefore all rental income should be declared to the French tax authorities. Professional advice should be sought as to what expenses are deductible. "

Arn't commercial enterprises more heavilly taxed?

Also, if you don't already have a property, will the new law passed about the interest reductions for a "principal residence" not apply if you don't live there? I.e. Is it possible to buy to let and get the tax reductions, providing you don't already have a house?

I suspect I will give this up as an idea "more trouble than it's worth" but I would be interested to hear other people's thoughts and ideas about this!

-Rob-

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There are existing schemes in France that give tax advantages to buy-to-let schemes - look up 'Loi Robien' for example. Most of these, however, apply to long-term lets of unfurnished accommodation. Furnished lets tend to be treated as holiday letting; however these can prove worthwhile as you can claim expenses. As your quote says, you need professional advice in order to set things up in the most efficient way for you.
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Hi Crevette - what's your experience? Do you know Paris well having lived there for some time? Do you speak French well too? Have you done buy to lets successfully in your home country?  If you answered yes to those 3 questions you are well on your way.  In my experience the money to be made in buy to lets is MASSIVELY dependent on buying at the right price (ie a BIG discount due to super-motivated vendors). Bide your time - view a hundred+ properties, offer on 10-20 and expect to buy one! Best of luck, Ian

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