Doing up old houses in the South of France

I just wrote a post on my blog at New Bricks and Pantiles giving some idea about the cost of renovating old stone properties in the South of France.

This reply to another mail today about doing the work and living here I hope answers a few more questions about problems and pitfalls of renovations to old properties.

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Tony

Seeking to move to Languedoc – Orientales/Aude preferences. I have successfully developed my own properties here in the UK and would like to do the same there.

I am something of a mixed bag with professional experience in law and management consultancy/venture capital and had a career also in sales/marketing/advertising, I have written and recorded an album but can lay bricks, plaster, 1st and 2nd fix carpentry, roofing, some plumbing and wire a house.

No French initially so thinking about doing week on/week off in the UK to keep money coming and not depleting capital except for buying/renovating property (mortgages in principal offered), but my wife is a little concerned to be left in the on weeks with 4 children and no French initially. Are there possbilities to assist english speakers/ex pats with my skill set to avoid the week on/off scenario?

Once fluent hopefully many more opportunities will open up in say 18 months to 2 years.

Ideally would look to rent to live in for at least first year + and buy to do up.

Is this a realistic plan and what pitfalls do you see. Would CGT be punitive in non-resident developed properties or can this be avoided by moving into for say a fiscal year and then selling on?

Regards

Martin

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Hello Martin,

Many thanks for an interesting letter.

The first handicap to developing property for resale is that there is a 7 percent tax and legal fee on top of the purchase price paid by the buyer. The purchase price usually includes the selling agency commission this is from 6 percent upwards (including tax) so the base property value is already elevated.

Unless you are a resident French tax payer there is 16 percent value added tax on the sale of the property if you resell within 5 years (this reduces thereafter to zero after 16 years). You are correct in that if it is your Maison Principal then you do not pay Value Added Tax (TVA) but you should consider that this is the main family home and you have to be French tax registered for at least two years to avoid this. You may not have a problem renovating and moving once, possibly twice, in a relatively short period, but after that it would be looked at carefully by the Notaire and possibly considered that you were trying to evade taxes.

The 16 percent tax will be based on the difference between your purchase price (including tax) and your selling price – the only building costs allowable can be from correctly certified invoices from a registered builder in France. If you do the work yourself, unless you are a registered builder, the time and materials cannot be offset for tax.

Personally I believe working one week on one week off would put a huge strain on you and your family – you lose two days a week simply traveling and the disruption and cost does not seem comfortable or viable to me.

Renovation costs for older stone built properties are much higher than every person I have met who has done this (including me) ever calculated. The cost of renovation per square meter of old stone built properties is from five to fifteen (the sky’s the limit) times the cost of building new. Very careful calculations need to be made with a lot of local and professional knowledge.

There are far too many stories of people buying houses and asking local builders to “quote” and then finding the cost is many times higher than “quoted” – these quotes (devis) are always estimates and not fixed quotations – the same logic applies if you are planning the work yourself – there is no similarity in working with the average British property. For example, stone walls in Languedoc are from 65 cm to 3 meters thick – one small window I put in my old home here took over 12 tonnes of rock to be removed and 2 weeks hard work.

A large number of English speakers are moving to Languedoc, most towns and villages have some English speaking community activities, book fairs, social stuff etc.

In Languedoc making a living is very hard – there are few jobs and your chances of getting employment are, to be blunt, zero. To get any casual work, legally, you have to register and get full social security approval – this will immediately cost you about 500 euro a month in social charges – you cannot claim any security benefits.

These are some of the pitfalls – we did it nearly 20 years ago, have survived and do not regret a moment.

Best wishes

Tony