France to get average speed cameras

Watch out, the fast, quiet autoroutes of France are going to be monitored by average speed cameras, as used in England, Germany, Norway and Italy. Don't panic just yet though, they are not scheduled to be introduced until the summer of 2011.

Source: www.leparticulier.fr

Paris apartment prices up 12% since 2009

According to French Estate Agents MeilleursAgents.com the price of apartments for sale in Paris has increased by 12% year on year to the 1^st May 2010.

The average price per square metre is for a Paris apartment is now 6730€, which in itself reveals an increase of 2.1% between 31 March 2010 and 30 April 2010.

The reasons for this increase are set out by property experts Immobilier-danger.com as being fourfold: Low Interest rates; safer investment that the volatile stock market; few properties on the market; and, as ever, location location location.

This property price increase is not mirrored throughout France as a whole, as French property prices generally have not increased dramatically. However, Paris and the classic desirable locations seem to be weather the storm, and remain as popular and as expensive as ever.

John Kitching, French Property lawyer

www.frenchlawconsultancy.com

Champs Elysées has gone green!

The young farmers have turned the Champs Elysées into a green agricultural zone for two days!

Have a look at the pictures and videos on the bbc website

http://news.bbc.co.uk/1/hi/world/europe/10143393.stm

There is also an interesting article on how the French wine industry is struggling due to the recession in Britain and the relatively weak pound driving up import costs. Britian is the biggest importer of French wine in the world... http://news.bbc.co.uk/1/hi/world/europe/7969564.stm

Eco Renault may face court action over name

An interesting French news article on the bbc website reports that Renault's new Zero Emission car (ZoE) may face court action over plans to name it Zoe. Parisian Zoe Renault, who has no link to the car maker, has sought legal advice to prevent the car giant from using her name for the vehicle. She claims that it would cause distress to hear phrases such as "Zoe Renault has broken down". Other women named Zoe, one of the most popular recent French names, are also signing a petition against Renault using the name.

Source: http://news.bbc.co.uk/1/hi/world/europe/10135873.stm

Thinking of selling? Act quickly before taxes go up

It is widely expected that the rate of UK capital gains tax is set to rise when the new coalition government announces its emergency budget. It is thought that any tax rises will come into force from April 2011, although that may be optimistic. Capital gains tax is currently at 18%, and it is expected that it will rise to mirror income tax rates which are 20% for lower rate tax payers and 40% for higher rate tax payers, with a possible 50% band for those earning over £150,000 per annum.

Please remember that gains on French property must usually be declared in the UK as well as in France. Capital gains tax paid in France can generally be offset against UK capital gains tax to avoid paying the same tax twice. It is worth pointing out that even where a French property is exempt from French capital gains tax, it is likely to be subject to UK capital gains tax for UK tax residents.

If you are considering selling your French property, it may be prudent to consider starting the ball rolling sooner rather than later before any tax rises, and ensure that you seek advice regarding mitigating the capital gains tax. Remember: do not sign an estate agent's agreement or sale contracts without getting them checked.

The Times has given five top tips to reduce your UK capital gains tax, click here.

French Property VAT - new rules on land and new builds

Further to the post below regarding the new French Property VAT rules with effect as of 11.3.2010, we have prepared the table below to make sense of the rule change. The table applies to a non VAT registered Vendor selling French property or land.

Where Vendor is not registered for French VAT:

Type of land	where Purchaser is VAT registered	where Purchaser is not VAT registered
Non Building Land (Terrain NAB)	Outside the scope of VAT regs Purchase tax applies at 5.09% Exceptions: art 1594-0 G: agreement to build = no purchase tax; art 1115 agreement to sell on = 0.715% purchase tax)	Outside the scope of VAT regs Purchase tax applies at 5.09%
Building Land (TAB)	Outside the scope of VAT regs Purchase tax applies at 5.09% Exceptions: art 1594-0 G: agreement to build = no purchase tax; art 1115 agreement to sell on = 0.715% purchase tax)	Outside the scope of VAT regs Purchase tax applies at 5.09%
New property	If the vendor had previously purchased as a building to construct, then VAT is charged on the whole sale price (257-I-3-b 1) and 0.715% purchase tax applies (art 1594 F) If the vendor had NOT previously purchased as a building to construct (eg it was already built) then it is outside the scope of VAT regs and purchase tax applies at 5.09% (or at 0.715% if an agreement to sell on was in place)	If the vendor had previously purchased as a building to construct, then VAT is charged on the whole sale price (257-I-3-b 1) and 0.715% purchase tax applies (art 1594 F) If the vendor had NOT previously purchased as a building to construct (eg it was already built) then it is outside the scope of VAT regs and purchase tax applies at 5.09%
Building other than new property	Outside the scope of VAT regs Purchase tax applies at 5.09% Exceptions: art 1594-0 G: agreement to build = no purchase tax; art 1115 agreement to sell on = 0.715% purchase tax)	Outside the scope of VAT regs Purchase tax applies at 5.09%

based on a table from the French Tax Office website official bulletin, the best format is on the Le Particulier website available here

NB new build buildings which are sold within 5 years of the building completion date are subject to VAT.

The situation for existing buildings remains unchanged (i.e. outside the scope of VAT)

French Property prices 2010 forecast

French Property Prices 2010

The Paris Chamber of Notaires is expecting to see prices and volume of sales in the most desirable parts of Paris to gradually increase throughout the rest of 2010, and whilst some other select areas will also expect the same results, such as Nice, Lyon, Toulouse and Bordeaux, the rest of France will have to wait until 2011 for a similar positive trend.

French property prices stable, but volume down

The Paris Chamber notes that prices in France haven’t dropped dramatically over the past two years, and in a lot of areas they have simply stagnated, although volume of sales has decreased dramatically.

French new build property - surprising growth

The new build market has been unusually active, although this is in part due to the various fiscal incentives that had been made available to French tax residents, such as the Loi Scellier, and it is thought that many people will have entered into these schemes without fully computing the pros and cons, and may have been better off avoiding the scheme.

New VAT and Notaire rates on plots and new builds

France has been forced to bring its VAT rates back in line with European Union requirements, which will particularly impact building plots and new builds built within the last 5 years. This is expected to cause prices of building plots to increase and will also have an effect on Notaire fees and registration taxes on sales of New Builds. There is widespread confusion concerning VAT on new builds sold within 5 years, and much will depend upon whether the buyer and or seller is an individual, a property professional, whether they are VAT registered. The deed of sale determines the relevant date, rather than it being the date of the initial contract (compromis de vente), and under the new rules, the planning authority description of the land will determine whether it is is building land or not, rather that it depending upon the intention of the purchaser. Each case will be determined on its own merits, and should be discussed with a Notaire. Please contact info@frenchlawconsultancy if you require further information.

The Pound heads towards 1.20 € / £

Despite our unique political circumstances, the pound has been steadily creeping towards the elusive rate of 1.20 €/£. Throughout the recession, many experts had been predicting that we would achieve this rate by the end of the year for the last two years, although it does now seem to be approaching reality. Whether this will be a long term rate or not will remain to be seen. Currency dealers are expecting this rate to trigger a lot of forward contracts of currency purchases, and therefore may see a sudden boost to French property purchases...which may also trigger sales, and act as a wider catalyst to the French property market.

To track the currency rate, here are some currency dealer websites: www.smartcurrency.com www.hifx.co.uk