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PROPERTY

French property roundup: Renovation grants to châteaux with vineyards

From government grants and building materials to the latest trend for vineyard châteaux, here is our weekly French property roundup.

Published: 26 October 2021 11:33 CEST
Vineyards in the Cahors area of southern France.
Vineyards in the Cahors area of southern France. Photo: Pascal Pavani/AFP

Châteaux with vineyards

A restored chateau in the Aude département in south west France is now open for visitors, part of an increasing trend for œnotourisme or wine tourism.

Both tourism companies and private buyers have been restoring old properties in the wine-growing regions of France, particularly the comparatively-neglected Languedoc area, and opening them up to tourists who want to stay in a luxury location while experiencing the wine-growing culture around them.

The Château Capitoul between Narbonne and Gruissan is the latest example, set in 62 hectares of vineyards.

Simplified renovation grants

If you’re doing a home renovation or work to upgrade your property, particularly if it improves the energy efficiency of the property, you could be entitled to government help.

However at present there are a lot of different schemes and grants that can be accessed, so finding the one that you need can be difficult. Added to this is the fact that many private companies have taken advantage of the confusion to scam vulnerable people through cold-calling about supposedly ‘government approved works’.

This is the situation the government aims to resolve with the creation, from January 1st 2022, of a single online portal for those planning renovation works. You put in details of the work you want to do, plus your income and personal circumstances and the portal will tell you how much help you are entitled to and where to apply for it.

Worth bearing in mind if you have works planned, and some of the schemes are also open to second-home owners.

Tax hikes

This is the season when property tax bills arrive and you may have noticed that these seem to be getting bigger. The property owners’ tax – taxe foncière – has skyrocketed in recent years, here’s why and which areas are worst affected.

Building materials

Talking of increasing costs, building materials including steel, cooper, PVC and timber have all been in short supply in France – recently linked to global supply chain disruption – and consequently prices have risen. So if you’re preparing for a renovation project on your French property it may be more expensive than you had anticipated.

Let’s move to . . . Orléans

France’s smaller cities and towns are becoming increasingly popular with property-buyers who still want the amenities of a town but are put off by the crowds and high property prices of cities like Paris and Marseille. 

Despite being the former home of the spirit of France herself (Joan of Arc) Orléans is often overlooked by visitors and property-buyers alike, despite is beautiful medieval city centre, position in the heart of the Loire Valley and lively calendar of festivals and events.

Here Orléans native Gwendoline Gaudicheau beats the drum for her hometown. 

French property vocab

If you are planning to do any work on your French property you may need a déclaration préalable – planning permission. There are two levels of permission required for works, a permis de construire or a declaration préalable. Which one you need depends on the size of the property and what you’re planning to do with it.

In general before you do any major works on your home – or anything that can be seen from the outside – it’s a good idea to check with your local mairie. Some regions have their own extra restrictions in addition to the national rules, especially if you are in a historic area or a mountainous region, so it’s a good idea to get any works approved in advance by the mayor to avoid accidentally breaking the rules.

Property tip of the week 

When it comes to furnishing your new place, check out the local brocante (vintage sale) and vide grenier (second-hand sale) to get low-cost furniture, fittings or crockery.

These sales are regular events especially in rural France and can be a great place to snap up a bargain, as well as enjoying the atmosphere.

READ ALSO Vide grenier and brocante: The written and unwritten rules of France’s second-hand sales

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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.

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.

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