Purchasing a ski home in France comes with some costs that we aren’t familiar with in the UK. From the notaires fees to inheritance taxes, we have made a short list of costs related to owning a ski home in France.
A notary is a necessary part of buying a ski home in France, and the fees generally come in at 7%-8% of the purchase price. Representing both the buyer and the seller, the notary is responsible for drawing up the contracts and holding onto the deposit at each stage of the purchasing process. The notary fees also include stamp duty, land registration fees and disbursements. Find out more about the role of the notary here.
The term you should look out for when buying a ski home in France is ‘frais d’agence inclus’ (FAI) which means real estate agent fees are included in the purchase price. This is usually the case, and it is unusual for commission to not be included in the total sale price. The level of commission can range from 4%-12%, though the highest level of commission is reserved for low-value sales.
Paid by the owner, taxe fonciere goes towards funding local services. The rate is determined by each commune and depends on the rental value of the property. New-builds are exempt from this tax for the first two years. Taxe d'HabitationAn occupancy tax paid on January 1st of each year. Paid by the tenant if rented, or the owner if the property is vacant (providing it is in good enough condition to be lived in), the rate is dependent on the notional rent of the property. This value may have nothing to do with the what the current rent is valued at as notational values have not been updated since the 1970’s. If the property is used as a holiday rental, taxe d’habitation is not paid.
If a property is a second home, any heirs may be subject to a French inheritance tax. Joint owners may want to consider their ownership structure, as it can be more beneficial to purchase as a company (see more information about buying as a company here), and married owners may want to consider a French marriage regime. In France, a spouse or PACS partner is exempt from paying inheritance tax, and there is also an inheritance tax-free allowance of €100,000 between parents and both natural & adopted children (but not step-children). After the initial €100,000 the rate of taxation starts at 5% and increases to 45%. Non-related beneficiaries have an allowance of just €1,594 followed by a 60% flat rate.
In France, it is the heirs who are liable to pay the tax, not the deceased’s estate.
Technically, all furnished lets must be declared with your local Mairie and gain approval as a ‘meuble de tourisme’. Websites such as Airbnb have made renting out your ski home easier than ever to do on your own, though there are things such as income tax which you must take into consideration. This is calculated at a rate of 20% for non-residents with certain allowances. The double treaty between France and the UK means that tax should not be paid twice.
Cost of living is quite subjective and is heavily dependent on lifestyle habits – eating at a Michelin starred restaurant everyday will obviously cost you more than dining at the local bistro, but whilst consumer prices are listed as 6.5% higher in France (Numbeo.com) many local expats find life outside of major cities much cheaper. Mary Hawkins, an agent for Leggett Immobilier says that “Eating out is definitely cheaper in France. A ‘plat du jour’ can be €12-€14 for a 3-course lunch including wine”. Whilst this might not be true on the mountain, a quick jaunt into the village will have you eating like a king for the price of a pauper in no time. Petrol and public transport (which is often free in ski resorts) are cheaper than in the UK, as are long-distant train fares, utilities and even internet services. Obviously, some concessions must be made for ski resorts which are notoriously pricey, but being a resident in a village rather than a visitor means the difference in cost of living between France and the UK is almost negligible.
For more information on buying a ski home in the Alps, check out our buying guides here.
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