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Brexit and the long history of the British buying property in France

The British have been buying property in France for hundreds of years, writes researcher Diana Cooper-Richet in The Conversation and while Brexit might put a few off coming, it's unlikely to put an end to the age-old trend.

Brexit and the long history of the British buying property in France
Photo: Leggett Immobiliere/The Local

Since the first decades of the 19th century, many British citizens have bought properties or built houses in France. Approximately 150,000 UK citizens currently live in France, second only to Spain. With Brexit on the horizon, many are uneasy, for the draw of life in France remains strong, and its roots are deep.

Initially, those who acquired estates in France belonged to the privileged classes. They were seeking a milder climate as well as a lower cost of living. Starting in the 1800s, prominent British citizens began buying or building luxurious residences in the Channel ports of Boulogne and Calais. In Dieppe, on the Emerald Coast, the Villa Bric à Brac, was built in 1856 by the members of the Faber family. (It has recently been transformed into a luxurious hotel). Close by, another superb English villa is Solidor, owned by Williers Forbes, who in 1879 launched the first tennis club in France. In 2005 it was purchased by French billionaire François Pinault and renovated. Many distinguished guests, including French president Jacques Chirac, have been hosted there.

Enchanted by the place, the politician and staunch abolitionist built a beautiful villa, which he named Eleonore-Louise, after his daughter. He stayed there every winter until his death in 1868, and his statue stands in the nearby Allées de la Liberté.In the south of France, other British visitors started exploring what was to become the Côte d'Azur. In 1834, Lord Brougham discovered a small village named Cannes.

READ ALSO:

Seven myths about British nationals living in France

Artists’ time

During the inter-war period, British and Irish artists and intellectuals were attracted to France. Playwright George Bernard Shaw came every year to stay in the mythical Eden Roc Hotel in Cap d'Antibes; H.G. Wells, the father of modern science fiction, preferred the town of Grasse. In 1927, Wells had the Lou Pidou built, a house in which he lived with his companion Odette Keun, a Dutch journalist.

Nancy Cunard, the “scandalous” writer and rich heiress of the eponymous transatlantic shipping company, bought a farm house in Normandy, at the La Chapelle Réanville. She restored the house, known as Le Puits carré (“the square well”), with writer and poet Louis Aragon. There she launched the Hours Press, her publishing house, and there produced twenty or so books, including texts by Samuel Beckett. Badly damaged during World War II, the house is now completely abandoned. But the memory of the couple remains; Aragon’s name was given to a nearby secondary school.

With the war’s end, former residents such as Graham Green (Travels with my Aunt, 1969) and Somerset Maugham (The Razor’s Edge, 1944) began to return. They and other “old timers” were soon outnumbered by new arrivals. In the mid-1980s, the writer William Boyd (A Good man in Africa, 1981) bought an estate in Sadillac, near Bergerac in the Dordogne, where he produces his own wine. During the same time, in Provence, Peter Mayle lived and wrote his ode to the French lifestyle, A Year in Provence (1989). By the end of the 1990s, more and more Britons were crossing the Channel with the intention of settling somewhere deep in the French countryside, be it in Normandy, the interior of Brittany, or in Limousin, where rural houses are inexpensive by UK standards.

The romance endures

Unable to buy the cottage of their dreams in the UK, retirees and others from the less monied classes are now contributing to the revitalisation of rural France. Whether they are optimistic or pessimistic, whether or not their pensions are paid in sterling, most of those who live in France or who wish to do so have been considering Brexit with some apprehension. Has this prospect discouraged those who planned to purchase a property in France?

The majority of British (65%) who were intending to buy a house in France prior to Brexit do not seem to have changed their minds. According to the 9th edition of the Investing & Living Abroad report from BNP Paribas, 23% of the potential buyers are considering accelerating their efforts – the fear is that their plans could be hindered when the divorce between the UK and the EU is formalised.

UK citizens remain the first buyers of real estate in France, while in Paris itself, Americans and Italians come first. Indeed, there the resources needed by would-be property owners are necessarily greater than those available to the average Briton who hopes to settle in some remote farmhouse.

Peter Mayle, author of A Year in Provence. Patrick Gaudin/FlickrCC BY

Thus in two centuries, the profile of the British in France has completely changed. In the beginning of the 19th century it was the lovers of French culture and the admirers of the Revolution of 1789, enlightened amateurs, hedonists, and cosmopolitans. They were gradually joined and progressively replaced by the first “tourists” travelling in groups, chaperoned by Thomas Cook and Co, and later by writers and artists who came to seek inspiration in the Latin Quarter or around Montparnasse.

While these earlier residents would sometimes buy an apartment, their enthusiasm for owning property in France was nothing compared to that of the British citizens, who at the end of the 20th century and the beginning of the 21st are now helping revitalise rural France. And so even as it changes form, the longstanding passion of the British for real estate in France endures.

This article first appeared on the website The Conversation.

Diana Cooper-Richet is a researcher at the Center for Cultural History of Contemporary Societies, University of Versailles Saint-Quentin en Yvelines – Paris-Saclay University.

 

 

 

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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.

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 membersOne 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.

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