Read news from:
Austria
SHARE
COPY LINK

PROPERTY

French village’s €1 land offer sparks global frenzy

The mayor of a tiny, underpopulated village in northwestern France has been inundated with calls from around the world after he decided to sell off land for just €1 per square metre in a bid to attract new villagers.

Published: 10 June 2015 14:51 CEST
French village's €1 land offer sparks global frenzy
The deserted centre of Berrien in northwestern France. Photo: GoogleMaps
The village of Berrien has a serious problem. There aren't enough youngsters to justify having a local school. 
 
To make matters worse for the village, which is in Finistère in the very north west France, the population of 987 people is on the decline. 
 
In an effort to save the school, village heads announced last week that they would sell off ten plots of land at around 800sqm each for just €1 per square metre ($1.13). 
 
Yes, you read that right. A whole plot of land would set you back less than the monthly rent of an average apartment in Paris. 
 
The land is normally valued at €9.50 per square metre, meaning it's almost being sold at a tenth of their market value. 
 
And the idea seems to have struck a bell. Since the announcement went out last week, the phone at the mayor's office hasn't stopped ringing. In fact, one hour saw 50 calls, a secretary told local media.
 
 

(Could this be your new local church? Photo: GoogleMaps)
 
“We've had calls from the Philippines, the US, Morocco…” Mayor Paul Quéméner told The Local. “In all we've had about 300 calls from people expressing their interest.
 
“It's been a huge success and it's created far more interest than we could have imagined.”
 
But not all of the interested parties match the strict criteria that comes with a plot of land in Berrien. Buyers must commit to building a property within two years. 
 
The mayor is also strongly encouraging young families, and admits that he has no interest in people simply looking to make an investment.
 
 
“It's a lovely village and region to move to,” said Quemener. “It's great walking country and in the village itself there are plenty of amenities. It's very tranquil.”
 
The mayor says Berrien village is home to numerous English expats and even boasts a British councillor.  
 
Of all the 300 official applications so far, around 30 are being taken seriously. A further five or six have already taken steps to making the dream a reality.
 
If you're thinking about making a serious application, we recommend you read why the experts are saying that 2015 is the year to buy a home in France. Good luck.
 
Another village has tried a similar tactic in the past. Champ-du-Boult in Normandy also sold land for €1 in April after a mass exodus of young people seeking greener pastures elsewhere. 
 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

PROPERTY

French property: What is buying ‘en tontine’?

If you're buying property in France, you might be thinking about buying 'en tontine' - this has advantages especially when it comes to France's strict inheritance laws, but can also have tax implications.

Published: 25 March 2024 11:17 CET
French property: What is buying 'en tontine'?

What is it?

The ‘clause de tontine’ sometimes also known as a ‘clause d’accroissement’ is a clause that is inserted into the property deeds when you are buying a house or apartment.

It can only be inserted during the purchase, and cannot be added later.

It’s basically a ‘group purchase’. It’s most commonly used by unmarried couples who are buying together but it can be used by larger groups too – for example a group of friends buying a holiday home together.

You will have to ask a notaire to draw up the tontine clause during the property purchase and it can only be used if 

  • the parties are equally involved in the financing of the purchase
  • the parties involved have a roughly equal life expectancy (for this reason tontine clauses may be rejected if there is a significant difference in age between the purchasers)

What’s the point of it?

The main reason that people use it is to sidestep France’s strict inheritance laws, which assign that a certain portion of every estate must go to children, at the expense of a partner. 

READ ALSO How France’s strict inheritance laws work

For this reason it is particularly used by couples who have children from previous relationships.

On a property with a tontine clause in effect, when one owner dies their share of the property passes in its entirely to the other member/members of the tontine.

This cuts out children from inheritance, but means that a surviving partner is not evicted from their home in favour of the children of the deceased. 

It also has the advantage of making the intentions of the deceased clear, to avoid arguments among heirs after their death.

It should be noted, however, that the tontine clause only takes in the property that it covers – other assets may be subject to French inheritance law so it’s therefore probably wise to arrange a will, to ensure your wishes for your estate are met.

The surviving party can ask a notaire to update the property deeds to show that they are the sole owner, if they want. Be aware there will be a fee, which could reach four figures for the privilege – and it doesn’t actually involve any change to the property title.

Drawbacks

The advantages of the system are clear, especially for blended families, but there are some potential drawbacks too, which mean that anyone considering buying in this way would be well advised to take proper legal advice before they start.

Inheritance tax – while a tontine will help you to avoid restrictions on inheritance, it does not exempt you from inheritance tax. French inheritance tax is structured according to your relationship to the deceased, and people who are neither married nor related to the deceased pay an eye-watering inheritance tax rate of 60 percent.

The only exception to this top rate of inheritance tax is if the property is your main residence and it is valued at under €76,000 – in that case, tax is paid at a rate of 5.8 percent.

Married couples and family members pay a much lower rate or not tax, but if you’re not married to your tontine co-purchaser, be careful that you’re not lining yourself up for a massive tax bill in future years.

Wealth tax – depending on the value of the property, it could tip you over into the ‘wealth tax’ category when you inherit. France’s wealth tax is a real estate based tax and is levied on anyone who has real estate assets (property and land) worth €1.3 million or more.

The calculation includes property held en tontine.

Tax savings – you might hear tontines being advised as a way to limit your French tax liability.

While this used to be true, changes to tax laws means there are no no significant tax advantages to buying this way – the same is true for buying a property via an SCI, which used to represent a tax saving until the law was tightened up.

Disinheriting family members – One side effect of the tontine clause on mixed families is to effectively disinherit any children of the first person to die.

Because the property passed to the survivor, under French law, only their direct descendants – rather than any family by marriage – are entitled to automatic inheritance.

That means that the children of the surviving partner will be entitled to the statutory share of the entire asset (between 25 and 30 percent depending on the number of children), but the children of the first person to die will be entitled to nothing. Obviously you can choose to leave them something in your will, but you can only leave them some or all of the estate which is not automatically given to the children on the survivor.

Divorce/dispute – if the members of the tontine split up or (in the case of friends) fall out, then they can either sell the whole property or agree to buy each other out.

However, if one party refuses to sell, then you have very limited legal options – unlike a standard property purchase a tontine is not regarded as joint ownership, so one partner cannot be forced to sell as part of a divorce procedings, for example.

Basically the tontine can only be ended or changed with the agreement of all parties – so if you can’t agree between yourselves then you may be stuck with it.

SHOW COMMENTS