A Collection of Brexit Questions

Question: Will I still be able to buy a property in France? Simon D.

Answer: This is probably the most posed question we have been receiving and to answer it, there was a really good article published in 'Living France Magazine' so here it is below...

How will Brexit change property ownership, the buying process, tax and inheritance rules and the pound-euro exchange rate for British buyers of French property?

Nothing has changed really.

Since Britain’s vote to leave the EU on 23rd June there has been much speculation and concern about what this could mean for those Brits who want to buy a property in the EU. The first thing to say is that once Britain triggers Article 50 there is a period of two years in which to negotiate withdrawal from the EU and agreements with the EU countries.

During those two years Britain remains part of the EU and so in the short term nothing is going to change.

Will I still be able to buy a property in France?

Yes! UK citizens are likely to remain free to buy and own property within the EU – after all non-EU citizens, including Americans, Australians and Canadians, are currently able to buy property in the EU so there is no reason why the same rules won’t apply to Brits.

There may be more hoops to jump through and a few more forms to fill out but Brits are a big market for French property and it is unlikely France will want to cut off this market by making it much more complicated for British people to buy property in France. The only difference might by that Brits would have to apply for residency visas in order to live in France for a certain length of time.

Will the buying process change?

Unlikely.

A British person buying a property in France has to follow the same process and procedures as the French and as non-EU residents and so it is unlikely that the actual process of buying will change. If it does then it would change for everyone so being inside or outside the EU shouldn’t have an effect.

The one area that might be of concern is that once out of the EU, UK citizens might find it more difficult to get a mortgage in France. This is because European banks consider non-EU citizens to be a higher risk than EU citizens so you might find you can borrow less and will have to have a higher deposit.

For the vast majority of people looking for property in France, and especially non-resident buyers, it is much quicker and much more effective to use the services of a experienced and qualified Independent Mortgage Broker.

An Independent Mortgage Broker will look at your specific circumstances then look through a selection of lenders to find you the best possible Mortgage product for your specific requirements, it is so obvious when you think about it!

Contact our Mortgage Brokers for a no obligation quote here.

Will inheritance rules change once Brits are non-EU citizens?

No. Prior to 17 August 2015, the inheritance rules applying to French estates owned by both EU and non-EU citizens were those determined by French law. However, since then, in the absence of any provision in a will, it is the law of the country of the deceased’s habitual residence that applies or the law of their nationality.

Therefore, even post-Brexit, a British owner of property in France can apply the law of their nationality to their French estate. If they are resident in the UK, English law will automatically be applied unless they stipulate in a will that they want a different country’s law to apply. If they are habitually resident in France, they will have to make it clear in a will that they want English law to apply, otherwise French law would be applied as it is the law of the deceased’s habitual residence.

Will I have to pay more property taxes?

France and the UK have a double tax treaty which is separate from any EU regulations and so this shouldn’t be affected by a Brexit. This covers income tax and capital gains tax so there should be no increase in these as a result of Britain’s exit from the EU. Other taxes which should not be affected by Brexit include inheritance tax, local property taxes and stamp duty on property purchases.

Will the drop in the pound mean I can’t afford a French property?

The most immediate consequence of Britain’s vote to leave the EU was that the value of sterling dropped to a 30-year low against the US dollar and the GBP/EUR exchange rate dropped from a previous high of 1.31 to a low of 1.20 before stabilising slightly at 1.24. For property buyers this means you can afford much less in France than you could have the day before the referendum.

Exchange rates have always been a worry for British buyers of French property and they are constantly moving making it difficult to decide on your budget because one day £100,000 will buy you a house worth €131,000 while the next day it will only buy you €120,000. This can work to your advantage as well – Brits have been enjoying very favourable exchange rates recently allowing them to get considerably more euros for their pounds.

In times of uncertainty it is difficult to predict what exchange rates will do and therefore difficult to plan for your property purchase. Some property buyers will hold off buying until the exchange rate improves while others will downsize their ambitions. On the whole, property in France is still much cheaper than the UK and so you can still afford a good-sized property. The other option is to fix your exchange rate using a forward contract to guard against any future exchange rate fluctuations.

So if you need to buy or sell sterling and would like to be kept up to date with all the latest data releases and exchange rate movements then feel free to contact myself Ben Amrany. If you are buying or selling a house in France we will make sure your monies are in the right place at the right time, we work hand in hand with you and Cle France.

For more information on the currency service I can provide please feel free to contact myself...

Ben Amrany from FC Exchange follow this link or phone and ask for myself and quote "Cle France" on 020 7989 0000.

You may contact me directly using this form (click here) with your requirement and I will explain the options that are available to you in getting the best exchange rate.