Part I: France, Côte d´Azur.
The world has somehow become a small place and modern technology has changed, making life and business in general terms considerably easier, if not far more accessible.
It is a true fact that most Central and Northern Europeans travel south as soon as they can to buy or rent property in the sun. They try and get away from rainy and cloudy, even freezing, conditions and relocate to balmier weather locations in Italy, Greece, France, Spain or Portugal. Following a recent inspection trip to France we shall look into the south, and in particular the charming Côte d´Azur, as a possible destination to invest in property abroad.
The Côte d´Azur has to be one of the most beautiful places in Europe, offering a large amount of property choices to suit different budgets. Prices in Cannes and Cap d´Antibes can be extremely high, but there are small apartments that could well suit your needs, produce rental yields of 5% upwards, and will not set you back much more than €250,000 for a decent 1-bedroom flat close to the beautiful waters of the Mediterranean Sea. The city of Nice, being a lot larger, has much more choice, with prices ranging from €3500-€4000 per square metre as with prime locations in Gibraltar, to €10,000 and upwards on the seafront or prime areas closer to Monaco and Menton. We are talking properties that can reach 15 or even 20 million euros.
For nature lovers desiring more off the beaten track areas, you probably want to head to St Tropez – a most wonderful and enchanting historic village west of Cannes. We are of course talking about la crème de la crème when considering St Tropez; there are wonderful alternatives a little further south or inland which are more affordable. France is always a highly desirable tourist destination and keeps a healthy and continuous flow of clients to rent short term via OTA companies like Airbnb or HomeAway to name but a few.
And why would we invest in France? France is a major European economy and is politically stable. It has a remarkable democracy with perhaps the most civilized elections systems around the globe. The weather is excellent with 300+ days of sunshine per year, close to the conditions along the Costa del Sol in Spain or Gibraltar. It is interesting to know that today as I write this article we had day temperatures of 19°C in Gibraltar and exactly the same 19°C in Marseille.
Infrastructures are superb – possibly amongst the best in Europe. Malaga has direct flights to Marseille in the south of Provence and Nice in the heart of the Côte d´Azur. You can make the air journey in a little more than one and a half hours. Awesome and easy.
Beaches are excellent, both private and public, to suit all tastes, pockets and preferences. Water temperatures in season are warm and the sea is gin clear most of the time. French gastronomy and wines are still rated as probably the best, although competition is fierce out there.
And what about buying charges and taxes? Good things cost money, they say in France. Purchase taxes are considerably higher than in Gibraltar. You have the local taxes plus the notaire fees and what have you. Think of 10% of the purchase price as a minimum, close to what you pay in Spain. You would then have to consider renting taxes. All foreigners who own property in France are liable to French income tax which stands at about 20% – not far off from Gibraltar income tax. But in addition, a new recent tax has now been established – Social Levies – which amounts to a further 15.5% on your rental profits. From a tax point of view this is basically a third of your net income. The good news is you can set it off your main country of residence taxes. The same amount of tax applies to capital gains tax once you sell your property. As we all know well, taxes are quintessentially unavoidable. Another option is setting up a French company where taxes benefit low-income small companies, but get considerably larger if you own a large portfolio of property. Whichever way you look at it, it is basically less tax-attractive than Gibraltar where capital gains tax on property does not apply, but very similar to Spain, Italy or the UK.
Lord Brougham discovered Cannes and Nice in the early XIX Century, circa 1835, when he was heading to Nice, and was not allowed to continue by Sardinian officials due to a cholera epidemic in Italy. He stayed in the charming fishing village of Cannes for the winter months, and enjoyed the balmy weather and wonderful sun of the Côte d´Azur so much that he spent each winter of the following 34 years in Cannes, making it fashionable with the English Aristocracy from then onwards. The Russian Imperial family and aristocracy followed suit along fellow peers of Northern Europe. Winters are a delight, and Cannes is the home of perhaps the most glamorous film festival in the world, held each year in May. It’s no wonder celebrities like Elton John, Pablo Picasso, Somerset Maugham and Aristotle Onassis made the Côte d´Azur their main residence.
But not everything is perfect. Nightlife is not comparable to what we have in Spain. But it has other attractions: as much art as you wish, and beautiful countryside, similar to certain areas of Spain. You can even ski in the Alps in May in the morning and swim in the sea in the afternoon. You should consider France as an option and not as competition. All countries in Europe have lots of things to offer.