2014 08 28 PR 6th BNP Paribas International Buyers Observatory

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25th August 2014
6th EDITION OF THE BNP PARIBAS INTERNATIONAL BUYERS OBSERVATORY
« Investing & Living abroad » 2014
The French tax system… is it appealing for non-resident owners of
second homes?
This year the study is based
around two main themes:
Developments in the property
market for purchases in France
by foreign non-residents, and a
comparative analysis of tax
applied to non-residents owning
second homes. The comparison
has been made between 9
countries: USA, Italy, France,
Belgium, Spain, Portugal, United
Kingdom, Netherlands and
Switzerland.
Contrary to expectations, France
comes out in a good position, not only for its way of life and the beauty of its regions but
also for tax issues…
Developments in the foreign non-resident property market
The number of transactions1 has gone down, the average purchase price has remained
stable but at a high level. UK non-residents are still the main investors.
After a slight decline in the number of transactions between 2011 and 2012, 2013 shows a two figure
drop at -13%. It should be noted that the number of transactions in the “Ile de France” region has stayed
more or less the same (-0.6%).
At the same time the average purchase price (when looking at all nationalities) has remained stable
(+1%) at 354,000 Euros. However there is a difference between Paris, with an average purchase price
of 584, 000 Euros, and other regions where the average purchase price is around 330, 000 Euros. If we
look at average purchase prices by nationality, we can clearly see two groups: The first group which
includes Russia, Norway, USA, Luxembourg and Sweden shows an average purchase price of around
400, 000 Euros and the second group which is made up of Switzerland, Portugal, Germany, Italy, Spain,
1
Source: MIN-NOT for the provinces and Paris Notaires Services for the “Ile-de-France”
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United Kingdom, Netherlands and Belgium shows an average purchase price of around 300,000 Euros.
According to François Laforie, Director of the BNP Paribas International Buyers activity, « The nonresident market has become more selective, foreign purchasers are looking for good deals drawing
lessons from changes in the market over the last three years, particularly in holiday regions. Thanks
notably to a stronger economic recovery, the British and the Swiss stand out. »
The British remain in first place having realised nearly 25% of all transactions, mainly in western
France. Belgium, as in previous years, is just behind the United Kingdom. They are ahead of UK
purchasers in 3 regions, the North of France, Auvergne and Languedoc Roussillon.
It should also be noted that the average mortgage amount has increased by 11%, generally more
purchasers turn to a mortgage in the up market segments. »
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A comparative analysis of tax applied to non-residents owning second homes 2 :
France has a good position.
The objective of this study carried out by the law firm Arsene Taxand3 is to compare tax applied to a nonresident (tax residents of a country in the European Union) for the purchase of a holiday home in France,
with tax applied in their country of residence and tax in 8 other countries.
The hypothesis is: purchase of an unfurnished property for 500,000 Euros, financed with a 250,000 Euro
mortgage with an interest rate of 3.5%, annual rental income of 15,000 Euros, sold after 10 years for
600,000 Euros.
Contrary to expectations, France is in the average
The comparative analysis of the different types of taxes between the nine countries ( using the above
hypothesis) puts France on an equal basis with Italy and Portugal. The indicators explode for the
USA. The detail :
 The costs linked to the purchase are less in France than in Italy, Portugal, Spain and Belgium.
 French taxes on rental income are similar to those in Italy and Portugal. They are less than
taxes on rental income in the USA.
 In France, local taxes work out to be quite low, especially when compared to the USA.
 Concerning capital gains, the impact of this tax in France is lower than in the United Kingdom
(if the reform expected in 2015 is put in place), equal to that in Portugal, and lower than that in
the USA.
Over and above these initial findings, the study shows that the French fiscal regime is just as attractive
when the property purchase does not generate rental income (see graph on the following page).
2
Study carried out in May 2014 by Arsene TAXAND at the request of BNP Paribas International Buyers. Carried out
purely with an informative objective. The information and figures presented are estimates, subject to change
depending on the personal situation of each client and subject also to possible legislative and regulation changes
in each country. An individual study should be carried out to ascertain the tax implications for any purchase of
property.
3
Arsene TAXAND is a French law firm specialising in tax issues. It is owned by the international network
TAXAND which includes the most renowned law firms in over 50 countries. TAXAND : 2 000 employees and 300
partners.
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Methodology & sources
Information has been obtained from a quantative study based on notary’s declarations of transactions to
Min-Not/Groupe ADSN for the provinces and Paris Notaires Services for the “Ile-de-France”. Data
adjusted according to methodology.
Comparative study of the tax applied to non-residents owning a second home carried out by the French
law firm Arsene Taxand.
Complete study available upon request: Please indicate the source « BNP Paribas
International Buyers »
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About the BNP Paribas International Buyers "Investing & Living abroad" observatory
With its experience and wish to anticipate investors’ expectations, International Buyers provides a market
analysis of non-residents buying property in France in its ‘Investing & Living abroad’ observatory.
Information has been obtained from:
 Market data from a quantitative study based on notary’s declarations of transactions to MIN-NOT
PERVAL (for the provinces), and to Paris Notaires Services (for the Ile-de-France)
 Comparative study of the tax applied to non-residents owning a second home carried out by the
French law firm Arsene Taxand in May 2014.
A propos de BNP Paribas International Buyers
A Society of BNP Paribas Personal Finance specialised in accompanying non-resident private individuals
carrying out a real estate operation. BNP Paribas International Buyers has an operational unit based in
Lille organised around a French network and an international network (via a web site) composed of
business introducers based in the United Kingdom, Ireland, Holland and Belgium, etc.
http://international-buyers.bnpparibas.com
A propos de BNP Paribas Personal Finance
BNP Paribas Personal Finance is the N°1 for finance to private individuals in France and in Europe
through its personal loan and mortgage activities. 100% subsidiary of the BNP Paribas group, BNP
Paribas Personal Finance has over 16,000 employees and operates in over 20 countries.
With brands such as Cetelem, Findomestic and AlphaCredit, the Company offers a complete range of
credit solutions to private individuals, available either at the point of sale (shops, car dealerships), or
directly through its customer relations Centre’s and internet. BNP Paribas Personal Finance can also offer
savings and insurance plans to its clients in Germany, Bulgaria, France and Italy.
BNP Paribas Personal Finance has developed a partnership strategy with retail stores, constructors and
car dealerships, commercial web sites, and other financial institutions (bank and insurance) based on its
know-how of the credit market and its ability to offer integrated services adapted to the activity and the
commercial strategy of its partners. It is also a reference in responsible lending® and budgetary education.
For more information:
www.bnpparibas-pf.com - www.moncreditresponsable.com – www.fondation.cetelem.com
www.jegermesfindemois.com - www.touslesbudgets.com
BNP Paribas Personal Finance
Claude Martin
01 46 39 97 93
Franz Nadine Szyf Beley
01 46 39 15 88
[email protected]
[email protected]