Useful Information
Buying property in FRANCE
Click here to look at a selection of properties in France or read the useful information below about buying property in France. Please remember that our service is free and the price of the property is the same whether you buy through Selection Property or directly from a developer or local agent.
The purchase process in France depends on whether you are buying a resale property or a new build property.
Buying a new build property in France
Option: Once you have decided to purchase your chosen property, we will take an option for you on that property. Depending on the development, an option is usually valid for up to 48 or 72 hours.
Reservation contract: During that time we will complete and send you the reservation contract, together with clear instructions. The property price, layout, delivery date and staged payments as well as your mortgage requirements are included in the reservation contract. This is a legally binding document which means that the property is taken off the market and the price will not be changed.
Reservation deposit: At this stage, you also pay the deposit on the property, usually 5% of the purchase price, to an account set up by the Notaire (the French notary overseeing the purchase process). It is held in the account until the sale is completed.
Cooling off period: Once the reservation contract is countersigned by the developer, there is a 7 day cooling off period. If you decide not to proceed with the purchase during this period, you should inform the developer by registered post.
Legal advice: During the purchase process, it is important that you obtain advice from a bilingual adviser qualified in French law. The adviser should liaise with the notaire on your behalf especially with regard to inheritance law and the content of the final contract. We can provide you with a list of independent legal advisers.
Completion: Completion of the purchase usually takes 3 to 4 months. During that time the Notaire draws up the Acte de Vente (final contract). On the day of completion, you can go to the Notaire’s office to sign the final contract. Alternatively you can arrange a Power of Attorney through your legal adviser. Notaire’s fees (about 3 to 4%) are paid at this stage. The property is officially yours when the Acte de Vente has been signed.
Staged payments: most new build properties are bought off plan and the purchase is often completed up to a year before the property is delivered. The balance on the property price is paid in stages until the keys of the property are delivered to you.
IMPORTANT NOTE: Please remember that fluctuating exchange rates can make a big difference to the price you end up paying for the property, especially with new build properties where payments are made in stages. You can cancel out this risk by fixing the exchange rate for a period of up to 2 years. To benefit from better exchange rates, no commission and no charges on overseas transfers, please contact us.
.Buying a resale property in France
The compromis de vente: when you have decided which property to purchase, you and the vendor sign a Compromis de Vente (reservation contract). This is a legally binding document which means that the property is taken off the market and the price cannot be changed. Items such as the price, fees, lead/asbestos/termites report, planning permission and mortgage requirements are included in the document. A copy of your passport, birth and marriage certificates is required to draw up the “Compromis de Vente”.
Deposit: At this stage, you also pay the deposit on the property, usually 10% of the purchase price, to an account set up by the Notaire (the French notary overseeing the purchase process). It is held in the account until the sale is completed.
Cooling off period: Once the Compromis de Vente has been signed, there is a 7 day cooling off period. If you decide not to proceed with the purchase during this period, you must inform the agent/vendor in writing by registered post.
Legal advice: During the purchase process, it is important that you obtain advice from a bilingual adviser qualified in French law. The adviser should liaise with the notaire on your behalf especially with regard to inheritance law and the content of the final contract. We can provide you with a list of independent legal advisers.
Completion: completion of the purchase takes about 3 months, during which time the Notaire conducts searches and draws up the Acte de Vente, which is the final contract. The balance on the property price and the notaire’s fees (about 7 to 8% including transfer tax) have to be transferred to the Notaire’s account in time for completion. On the day of completion, you can attend the Notaire’s office with the vendor to sign the Acte de Vente. Alternatively you can arrange a Power of Attorney through your legal adviser. The property is officially yours when the Acte de Vente has been signed!
Click here to look at a selection of properties in France
or email contact@selectionproperty.com for more information.
French LEASEBACK Scheme
What is known as the "French leaseback scheme" refers mainly to two types of residences known in French as "quasi-hotelier" and "residence tourisme".
Selection Property founder owner Philippe Robin has been selling French leaseback properties since 2002 when he first introduced the scheme to northern European investors. Below are a few points which he has put together to give you a clear understanding of the French leaseback scheme.
Background : As highlighted by the World Tourism Organization, France is still the number 1 tourism destination in the world, by a long shot! Official figures for the top 3 foreign tourists’ arrivals are as follows: France: 82 million, Spain: 58 million,USA: 51 million.
Introduced over 20 years ago by the French government, the leaseback scheme is an incentive offered to investors in order for the French economy to meet the needs for tourist accommodation. As tourism figures keep increasing, so does the need for accommodation.
How does it work? A French leaseback development has to be located in a holiday or urban area where there is a need for leisure or business tourism accommodation. There is a rental management company on site which finds holiday makers or business visitors and provides services such as reception, household linen, cleaning etc…
When you purchase a leaseback property, you are actually the FREEHOLD owner of that property and you are also a co-owner of the development communal areas. Most properties are sold furnished so you don't have to find the furniture yourself. When you buy the property, you sign a RENTAL AGREEMENT with the rental management company. This agreement is for a minimum period of 9 years and it can be renewed. The rental management company is therefore effectively your tenant and pays you a rent as well as allows you some personal use of your property. Terms of the leaseback scheme, rental income, personal use and facilities vary from development to development: the rental income may be guaranteed or flexible and the level of personal use may be up to 6 months per annum.
The VAT DISCOUNT : You also benefit from the very attractive VAT concession, which represents a saving of up to 19.6% on the property price. Either the developer pays the VAT for you or you receive a refund a few months after completion. Until 2007 you had to pay back some of the VAT when you you’re your property however , since July 2007, the introduction of a new tax law (CGI article 257) means that you do not have to pay back any of the VAT as long as the new owner takes over the remainder of your rental agreement! This makes the process of reselling your property even easier and enables you to sell it at a very attractive price!
Income and Capital Gains Tax : You pay income tax at the rate of 16% (plus national insurance contributions if you’re a French resident) on the rental income that you earn in France. However there are several items that can be deducted from your taxable income and effectively reduce the amount of tax to a minimal amount, if anything at all. Such items include interest payments on your French mortgage (should you purchase with a French mortgage) and what is called a depreciation rate. There is also a double taxation agreement between France and the UK and France and Ireland. With regard to Capital Gains Tax, the rate is the same and there is a tax allowance starting from year 5 to year 15. By keeping the property for 15 years or more, you benefit from the full allowance and effectively end up paying no tax on your gains!
To summarize, the French leaseback scheme can be a safe long term investment which offers a turnkey and no maintenance property, a huge discount on its purchase price, hassle-free rental income as well as personal use of your property. Most rental management companies now also offer an exchange program whereby you can decide to spend your personal use in any of their other developments, regardless of where your own property is located. This means that you can buy a property on the coast and spend a few weeks in your property, another few weeks in a ski resort and another few weeks in the countryside should you wish to do so! All this in a country which is quickly and easily accessible by train, ferry or plane and offers a unique variety of landscapes and activities, not to mention wonderful food and wines, warm seas and plenty of sun!
With properties in many countries across the globe, Selection Property can give you unbiased advice about whether a property, or even a country, is suitable for you. Please email contact@selectionproperty.com for more information on the French leaseback scheme or other properties that meet your needs.
Alternatively, Click here to look at a selection of leaseback properties
IMPORTANT NOTE: Please remember that fluctuating exchange rates can make a difference to the price you end up paying for the property, especially with new build properties where payments are made in stages. You can cancel out this risk by fixing the exchange rate for a period of up to 2 years. To benefit from better exchange rates, no commission and no charges on overseas transfers, please contact us.
Buying property in CROATIA
Click here to look at a selection of properties in Croatia or read the useful information below about buying property in Croatia.
PLEASE NOTE: Since February 2009, foreign nationals are able to buy in Croatia with the same rights and opportunities as local Croats! This change in the rules has been brought in preparation of Croatia joining the EU, which is expected to happen in 2011. With foreign buyers now able to purchase property on the same terms as local buyers, there is one more reason to purchase in this beautiful country! With its idyllic Adriatic coast, warm welcome, marinas, seaside cafes and restaurants or even the new golf courses of Istria, Croatia has plenty to offer, still at reasonable prices
The purchase process:
Once you have decided which property to purchase, you sign a pre-sale contract containing details of the property, the buyer and the seller as well as the completion date of the purchase. A 10 % deposit is paid to secure the property. Completion takes place 3 to 6 weeks later. Both parties sign the official sale contract at a local Croatian notary public office. The notary will oversee the signature of the contract.
We recommend that you use the services of an English speaking lawyer during the purchase process. This can be arranged whilst you are in Croatia. The fees for a notary plus a lawyer are about 1.5 % of the purchase price.
Taxes:
For an individual the stamp duty or Real Estate Transfer Tax is payable at a rate of five per cent of the property price within 30 days of entry in the Land Registry. If the property is sold within 3 years of purchase, the capital gains tax levied is currently 35 %, however no capital gains tax is payable if you keep the property for 3 years or more.
Income tax is 25 % of the declared rental income profit, which applies to owners renting out as individuals rather than through a company. There is a double taxation agreement between Croatia and the UK as well as between Croatia and Ireland, which means that you don’t have to pay the same amount of tax twice.
Mortgages:
As well as paying cash, a foreign buyer can usually borrow up to 70% of the purchase price through a mortgage. All mortgage applications are subject to status and considered on an individual basis by local banks.
Rental income:
The rental potential depends on the location and type of property. Most holiday makers currently originate from continental Europe and prefer modern apartments close to the sea. Several coastal towns in Istria are built around a main square featuring cafes and restaurants with terraces open all year round. Properties built to modern standards and preferably within walking distance of both town centre and sea can easily be rented out from late spring to early autumn.
Croatia and the property market:
Before the events of the early 1990s, Croatia was already one of the most important destinations for tourism in Europe. It is fast climbing back up to this former status whilst imposing strict rules on property developments so as to preserve its cultural heritage and the appeal of its coastlines. As the country moves towards EU membership, expected improvements include increased financial packages, lower interest rates and speedier registration of ownership, making it easier and affordable for a broader base of foreign buyers to purchase in Croatia. Shrewd investors are buying now to enjoy maximum price increases.
The Istrian region:
Istria borders Slovenia to the West and has a maritime border with Italy. It is known as “the new Tuscany” and is a beautiful region with great vineyards. It is also the most popular destination for foreign visitors to Croatia. Access is easy via Trieste or Venice airports from the UK. The flight time is just under two hours and from there, it is only a 40 minute drive to Istria via Slovenia. You can also fly directly to Pula from Dublin and London or to Rijeka from Oslo.
Why buy property in Istria?
Istria has been catering for tourism since the 1960s and facilities such as cash points, doctor’s surgeries, shops and cafes with terraces are everywhere. The region is also a popular holiday destination for Italian, German, Slovenian, Austrian, French and Swiss holiday makers who can easily drive from their respective home country to Istria. This creates a big demand for self catering rental apartments in the region, especially during the summer months of June to September
Property prices in Istria remain much lower than in the south of Croatia. Capital growth forecasts are fuelled by the improved motorway network and the fact that up to 14 golf courses (out of 23 nationwide) are being built in Istria alone. Together with improved facilities for yacht owners, this pushes prices up by attracting a wealthier type of visitors and investors, whilst remaining more affordable than further south in Croatia.
Please remember that we do not charge you for our service and the price of the property is the same whether you buy through Selection Property or directly from a developer or local agent.
Click here to look at a selection of properties in Croatia
or email contact@selectionproperty.com for more information.
Our Clients TESTIMONIALS
C. Purdy, Buckinghamshire "Thank you very much for your help with my purchase in France. You made me feel at ease throughout the rather daunting process of purchasing a Leaseback property. Overall the service I have received from Selection Property has been excellent. You have been fantastic and have made the process very easy for me."
H. Emmett, Nottingham "Thank you for all the help and support that you have provided. Service and support, recommendations for legal advice and mortgage advice have all been excellent!!!"
M. O'Connell, Dublin "We are very happy with our apartment and are looking forward to spending some time there soon. We also have friends who may be interested and we will be happy to refer them to Selection Property."
S. Collier, Lancashire "Once again thank you for your prompt attention to the matter. I would not hesitate in recommending your company should the opportunity arise."
O. Crilly, Belfast “I must say that the service you provided was second to none. Everything was made clear throughout the whole process and while it is a fairly complex process we could not have completed without your help. Regarding recommending you to other people, we will have no hesitation and indeed we have passed your details onto several people already. Many thanks for you help.”
K. Hayes, Cork “Firstly I would like to say a sincere thank you. I would highly recommend your company to anyone interested in purchasing foreign property. Hopefully we will be doing business again soon.”
R. Green, Glasgow “We have been involved in purchasing property through your company Selection Property... the customer service has been second to none. The property we are purchasing is extremely modest but this made no difference to the quality of your service… We wanted to point this out to you. As a consequence, as we have a friend who in due course will be looking for higher profile property, we have recommended Selection Property to him.”
P. Lee Smith, Berkshire “We are very pleased with the property. It all went really well and everything happened when it was supposed to and we are quite happy with it. Thanks to you all.”
R. Hero, London “May I add that we were impressed by all your contacts in Istria. We were looked after excellently by all the people we met… they were so polite, friendly and efficient. It was a pleasure doing business with them.”
K. Simcock, Leeds “I have passed your details to a few people who are considering properties abroad, as we have found the process relatively straight forward.”
E. Brown, Private Selection vendor "The sale went through today and we should receive the payment tomorrow so thanks a million again for all your hard work!"
S. Phillips, London "We were in Croatia at the weekend and took some pictures of the residence which I thought you may be interested in. The builders are progressing well, with the shell of the building up and work now starting on the swimming pool. Anyway, it is looking good!"
H. Thoresby, Kingston upon Hull “I will not hesitate in
recommending Selection Property to others in future.”
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