How to Sell Your French Property to Avoid New Second Home Tax
It’s not just in the UK that the government is seeking to stealthily increase taxes in a bid to bring the nation back from the brink of bankruptcy; President Sarkozy is implementing similarly sneaky tactics in France. His latest idea is to add an additional tax burden on to owners of second homes in France…which could of course impact many Britons who still retain French holiday properties.
The idea has faced stiff opposition, with some alleging it is discriminatory against foreign owners of second homes, therefore it has some way to go before it could become law. However, the move has served to force the hand for some Britons who were already concerned at the high cost of maintaining their second home abroad.
If you want to sell your French property in a bid to avoid this potential new tax, or because the cost of having a second property overseas is just too expensive, the good news is that you can potentially benefit as the euro is still strong against the pound. But the bad news is that the property market in France, which has never been particularly buoyant compared to our own in the UK, has slowed right down and you will have to fight to find a buyer. So, here are 7 top tips that will hopefully enable you to sell up and encash your French property asset as profitably as possible.
We Britons have a dual love affair with both France and with property – therefore it’s no wonder that so many Britons bought up homes across the Channel when the pound was strong and the British economy seemed to be doing so well back in the early days following the turn of the century.
Owning a second home abroad became fashionable too, and certainly something for middle class Brits to aspire to – whether as an investment asset or as an asset to be enjoyed by all the family. Some who bought a home in France also went on to realise ‘the dream’ and relocated overseas too – and whilst this category of purchaser may not be impacted by the new proposed property tax, many have seen their lifestyle eroded by the likes of inflation, a weak pound versus a strong euro reversal in their currency fortunes, and by a real downturn in the overall economy in France.
Whatever your reasons for having bought a home in France and whatever your reasons for now wanting to sell up and get your money out of French property, the bottom line is you need to get out as much as you can and sell as effectively and as efficiently as possible. So here are our 7 essential tips for selling up and cashing in: –
1) Know What Adds Value – in a bid to sell a second home or even a principal property, many vendors decide to add value to their house to entice the buyers into making a better offer…however, some actions you might be proposing to take may add little or no value to your home at all.
HSBC conducted a survey of estate agents and valuers in the UK to determine what they believed added value to a home, and a loft conversion came out on top. However, deciding to take such action in your home in France in a bid to sell it for more could actually backfire. For a start you have to make a significant financial outlay to complete the job, and you will delay your property from coming to the market too.
The likes of redecoration and re-carpeting were not deemed to be value added actions according to the survey. So, consider what will and what will not add value to your home before you spend money on it that you may never recoup.
2) Don’t Do it Yourself – if you are not adept at DIY, don’t do it. You run the risk of botching a job and slashing the value and appeal of your property. If there are jobs that need doing, get a professional in to do the job.
You will of course incur a cost when you call in the professionals, but it will be worth it if ultimately the job is done well. Look at any work that needs doing and assess whether you should complete it before you market your property for sale.
Get quotations and recommendations before you hire a contractor and don’t cut corners.
3) Revamp, De-clutter and Clean – you absolutely have to present your property in the best light possible if you want to have the best chance of selling it. This sounds like the most obvious fact – but all too often vendors are blind to areas of their home that are perhaps less than perfect.
The best way around this is to invite a trusted friend or family member to give you an honest appraisal of their first impressions of your home, and to give you their feedback about what areas need cleaning up or improving. You could also ask an agent to do the same – but do be prepared for criticism and to do some work to ensure your property is presented in the best light possible.
You may have to spring clean, de-personalise your home and perhaps even revamp areas of it. You needn’t necessarily spend a fortune on putting in a new kitchen for example, even if your kitchen is a little worn. New doors on old units can be an inexpensive way of revamping a tired kitchen.
If yours is a second home in France and you can’t be on hand every day to ensure it is clean and tidy, you may have to rope in the services of a friend or neighbour, or even hire in a professional company to ensure it remains looking pristine.
4) Price Realistically – you may have spent X amount on your property when you bought it, did it up and turned it into your ideal home, but that’s not to say you will necessarily get back everything you spent on it now that you come to sell it. The market in France is relatively weak and flat at the moment, and if you are absolutely determined to sell then you may have to face the fact you will incur a loss.
Of course, you may have bought at rock bottom bargain price, and anything you reap when you sell will be a healthy profit. Either way, the bottom line is that you have to price your property realistically in order to sell it.
Look at the market, look at other houses for sale in your area of a similar quality, look around at what is selling and in what price range…use all of this information to your advantage when you work out what your home is worth. Remember, your property is only worth what someone will pay for it – so how much will the current market pay you for your home?
You can and probably should take advice from agents who work in your area…but don’t be pushed into putting your home on the market for a high price just so that an agent can reap a higher reward. You ultimately want to sell – so at what price will your home sell?
5) Market Effectively – putting up a ‘for sale’ sign in your front garden and hoping someone spots it and makes you a favourable offer for your property is not marketing it effectively!
Listing it with multiple agents, setting up a website for your property and sending the details to all your family, friends and social contacts and asking them to tell the world about it, listing it online and even creating flyers to put in tourist offices and hotels is marketing it effectively!
In other words, think outside the box about how you can get your home in front of as many people as possible, and then take action accordingly. The more people who see your property the greater the chance you have of selling it.
6) Sell the Lifestyle – you’re not just selling a property in France, you’re selling a potentially amazing lifestyle…don’t forget that. You need to ensure you market this fact when you market your house.
Do the research for your buyers, tell them about how the property purchase process works in France, what the cost of living is, where they can shop, dine, buy the best wine and how they can expect to love their new life in France if they buy your French property.
By setting up a website for your property you also have the platform through which to market the lifestyle that is also on offer.
7) Be Ready – at some point you will get a favourable offer and you will need to be ready to move and take action! Have a solicitor ready, have them primed and ready to act, have a removal company ready to move you out, or a van hire company available to supply you with a vehicle so you can clear out your home. Second guess any snags if there are perhaps any, and do the likes of environmental searches for your buyers or get the paper work in place to prove you had permission for any renovations for example.
The quicker you can move and make the sale go smoothly, the more likely you are to see it go all the way through without hiccup or hurdle. Don’t rest on your laurels once you’ve got the house on the market and for sale, make sure you’re ready to hand everything over the minute a buyer makes a move.
Finally, properties are still selling in France, and there is still a healthy appetite to own a home abroad. There is less money around and fewer buyers, but if you work hard to make your property stand out from the crowd, you stand a much better chance of being a successful seller.