Through good times and bad — and they are bad at the moment — La Belle France remains resolutely a favourite destination. For the third year running it is the world’s most visited country — ahead of the US, China and Spain — welcoming 75 million tourists a year.
House hunters from overseas have kept faith with France, too. Knight Frank’s latest Global House Price Index shows prices rose by 3.9 per cent in the past year, faring far better than Spain and Greece, where prices tumbled by 7.3 and 9.8 per cent.
“France has all the fundamentals for a sound investment,” says Nick Leach of Athena Advisors. “It has strict building controls, Europe’s lowest debt levels and excellent demand for property from locals and international buyers. Well-located property in Europe’s best regulated property market has to be interesting for buyers taking a mid- to long-term view.”
Buyers are concentrating on France’s three prime areas, says Leach: the Alps, the Côte d’Azur and Paris. Each provides an authentic French lifestyle within swift reach of London by train, road or air.
Central Paris property outperformed London last year, rising by 22 per cent as buyers from South America, Europe and Asia competed for a slice of France’s capital city. A compact centre and a building ban above seven floors keeps supply severely restricted and prices buoyant.
Nouvelle Vague is a rare new-build on the River Seine close to the Marais, priced from £403,400 for a 430sq ft apartment through Knight Frank. The contemporary project faces west to Notre-Dame with 73 apartments set around communal gardens. Secure underground parking is £32,270 with annual service charges from £1,940. Completion is planned for mid-2014.
In La Défense, the Canary Wharf of Paris, Athena Advisors is selling leaseback apartments priced from £143,170 for tiny 237sq ft studios. The development of 99 furnished and managed apartments has guaranteed returns of up to 3.9 per cent.
The South of France
“France is a market of second homes, so even when Europe is in crisis buyers come from Russia and South America,” says Sylvain Boichut of John Taylor France. On the Côte d’Azur prices peak in Cap Ferrat and Cap d’Antibes, followed by Cannes and St Tropez.
St Tropez remains the country’s hippest spot where sea-view villas sell for millions. Buyers looking for value could head inland where Cluttons Resorts is selling 10 newly released suites at St Endreol Golf & Spa. The 370-acre resort is 40 minutes from St Tropez and Nice airport and the 800sq ft completed suites cost from £205,730 with a four per cent rental guarantee.
Prices are also more affordable further west on the rocky coastline of the Var. In Le Lavandou refurbished three- and four-bedroom apartments at Residence Les Roches cost from £425,260. With a sandy beach across the road and the narrow lanes and high-gloss shops of St Tropez 40 minutes away, these would rent for £1,610 in high season, says Savills.
The French Alps are still the number one destination for British skiers, attracting more than 1.3 million last year. Buyers can choose from large purpose-built resorts or smaller, character-packed villages.
In Ste Foy, 20 minutes from ever-popular Val d’Isère, L’Etoile des Cimes has 55 furnished one- to four-bedroom apartments on the piste. Prices start from £152,000 including parking with annual costs from £565. The first phase is completed and sold well to British buyers.
One- to three-bedroom off-plan apartments in pretty Chatel in the vast Portes du Soleil ski region close to a planned new lift cost from £210,220. Both projects, for sale through Athena Advisors, are leaseback schemes where buyers who choose to rent do not pay VAT and can receive guaranteed returns of up to 3.8 per cent.
Nearby, three-bedroom Chalet Mana is for sale for £258,180 through Winkworth France, striking value for a newly refurbished and detached wood chalet on a ski bus route in the Portes du Soleil.
* Athena Advisors: 020 7471 4500, athenaadvisors.co.uk
* Cluttons Resorts: 020 7584 3050, cluttonsresorts.com
* Winkworth France: 020 7870 7181, winkworth.fr
* John Taylor: 00 33 (0) 497 06 65 65, john-taylor.com
* Savills: 020 7016 3740, savills.com/international
* Knight Frank: 020 7629 8171, knightfrank.com
It’s not so bad – long-term UK home owners avoid capital gains
The annual tax bill for non-resident French property owners looks set to rise under plans announced this month in Paris. In an attempt to boost France’s troubled economy, President François Hollande proposes to increase tax on rental income earned on non-resident homes from 20 per cent to 35.5 per cent.
Meanwhile, capital gains tax will increase from 19 per cent to 34.5 per cent, the rate currently paid by all French citizens.
If passed by the French government, the tax on rental income could be applied retrospectively from January 1 this year, while the changes to capital gains will commence from July 31.
Proposed increases to the annual wealth tax could also affect some of the estimated 200,000 Britons who own homes in France. Anyone with property valued over €800,000 (£627,000) will now pay wealth tax at 0.55 to 1.8 per cent of the net value of their total assets. “The new proposed tax on rental property is only applicable to non-furnished rental properties and very few British investors own one of these,” says Camille Letuve of French property agents Athena Advisors.
“Capital gains tax has increased but still reduces over time. Very few people invest in French property to then sell it a few years later. Instead they have at least a 10-year plan, and if they keep their property long enough there will be no capital gains tax at all.”
These proposed changes were discussed last week when President Hollande met David Cameron in Downing Street. The French leader highlighted the similar top rate of tax in both countries — 45 per cent in Britain and 41 per cent in France — while Mr Cameron stated that he was “reassured” by President Hollande that there would be no question of discrimination against British citizens.