Well a week after the announcement of the result of the Brexit referendum in the UK,a lot of water seems to have gone under the bridge. After the expected losses on the stock market and the volatility of the currency, as this week has progressed, a period of reflective calm seems to have settled.
So what does Brexit mean to those wanting to buy a property in the French Alps ? Well the first thing to say is that nothing whatsoever changes until the point the UK actually leaves the EU. And until Article 50 is triggered, there will be at least two years, before the exit actually happens. Any property purchases made before the end of the negotiation period are in no way affected and purchases concluding before the exit will not be affected retrospectively.
Post Brexit, those from the UK, looking to purchase in France, or anywhere in the EU, will simply find that they are on a par with the many non-EU investors, from across the World, who already buy in France. Residents of the US, Canada, Russia, Asia and the UAE, already own property in France and whilst it may become slightly more complex ( the requirement of Visas perhaps, but this is the same any many countries UK residents purchase property today ), clearly UK residents are not going to be prevented from owning property in Europe.
Since the vote itself, we have spoken with a number of clients, who are fearful of any tax regulations that may change post Brexit and any negative impact this might have on them, as property owners in France. The good news is that a Double Taxation Treaty exists between the UK and France, that has nothing to do with the EU regulation and membership. In addition the treaty includes a condition of equal treatment, which means that a UK resident cannot be taxed differently to a French one, were it to result in the UK resident being worse off. So laws are already in place and will continue to be in place, post Brexit, to prevent any issues with regards to an increase to the tax liability.
Prior to the referendum, there was much discussion about how sterling would crash should Brexit be the result, however what has happened, is whilst there has been a drop off, current levels have settled at around 1.20, which is still higher than two years ago, when the Euro floated around 1.15, so in reality, whilst sterling has been affected, it has been far more minimal that anticipated. The share market has in fact bounced right back, far harder and far quicker than was anticipated, sitting currently at around 6,524 and set for the highest weekly gain since 2011. Demonstrating that right now the impact of Brexit has not been overly felt, post that initial few days.
For those concerned about exposure to their capital, then never has there been a better time to look at taking out finance for the purchase of your property in the French Alps. For the French market, the result of the referendum came almost at the same time as mortgage rates being at their lowest rate in France, ever. Non-Resident buyers can access rates of 2.15%, fixed for the entire 20 year rate of the mortgage. American buyers have long understood the concept of long term fixed rate mortgages, as they are readily available in the US, but British buyers, who are more used to the short lived discounted mortgages, are now started to understand the significant savings to be made in taking out a French mortgage, particularly in terms of knowing what the costs will be, month on month, for the entire duration of the loan. A buyer with a good profile, can now access a 20 year fixed rate mortgage, as a rate of just 2.15%, at a LTV of 80%.
So by way of a summary
1) Nothing will change between now and two years post Article 50 being triggered
2) Many Non-EU residents already buy in France and will continue to do so
3) A Double Taxation Treaty is in place directly between the UK and France ( and not as a result of EU Membership ),so the taxation situation is fully protected and will not change
4) Any purchases made during the period before and during the two year period post Article 50 being triggered, will not be retrospectively affected .
5) Taking out a mortgage is a good way to manage any market fluctuation on the currency
For further information or to discuss your own personal situation in more detail, please contact our office on +44 (0) 1722 743662, or firstname.lastname@example.org
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