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Buy-to-let tips, last taxe d'habitation: Five French property updates

We also look at new coastal property sale and rental rules, the plight of a woman unable to return home because of a neighbour’s crumbling house and more

This week look at one lasting consequence of 2020’s Storm Alex, the attractiveness of Poitiers, an Italian startup’s model to rapidly sell a property, new rules for coastal erosion and more Pic: Benoit Deschasaux, Stsvirkun, Walencienne, Sibuet Benjamin / Shutterstock

Neighbouring house instability forces woman out of home for two years

A woman in her 50s living in a village close to Nice has been waiting two years to return to her home because a neighbouring house, damaged in a huge storm, is in danger of collapsing. 

Storm Alex struck the southeast of France in October 2020, leading to devastating floods and the deaths of 18 people. 

Read more: Storm Alex: Rebuilding goes on one year after valley floods near Nice

Read more: Storm Alex: French village resident tells of devastation

Muriel’s village of Bonson was affected but her house was undamaged. However, a neighbouring house that sits above hers on a hill is in serious danger of collapsing, meaning that she has had to move into temporary accommodation. 

The owner of the neighbouring house, a German man, has proven impossible to contact, leaving the local authorities to pick up the pieces. 

Muriel – only her first name has been reported by French media – said that she wants her house back so that her children and brother, who live in Scotland, can start visiting again. 

She said that she bought her house in 2005 and only has three years left on her mortgage. She described her home as a “little paradise” where you can watch eagles flying overhead. 

With the mairie of Bonson unable to find the German owner of the endangered house, they have had to pay the costs of securing it. 

“The house is wrapped in an iron net and sensors have been installed to monitor the movement of its bricks at all times," Jean-Claude Martin, the mayor of Bonson, told Le Figaro.

This cost €266,000, plus €10,000 to pay a lawyer and bailiff, a sum that amounts to around a third of the commune’s yearly operating budget. 

“As it is a private property, we do not receive any subsidies from the state, the department or the region,'' Mr Martin said. 

The local authorities are hoping to be able to buy the property for a symbolic €1 fee, with the owner seemingly having disappeared long ago. This will allow them to receive state subsidies to renovate the property. 

There is hope that Muriel will be able to return to her house in November with it now almost secured. But she is sceptical. 

“If in six months' time the sensors detect that a stone has moved, what will happen? I will have to leave my house again,” she said. 

Read more: Storm damage in France: How to manage an insurance claim for your home

Five interesting cities for investing in property on a budget

A study by an estate agency specialising in investment has chosen Poitiers (Vienne) as the best French city for investors to buy property in. 

Masteos looked at cities with a population of over 100,000 people in which conditions are best to invest in a 30 square metre studio flat for around €100,000. 

It specifically targeted cities with a student population of over 20% as students offer a more stable supply of tenants than cities catering for tourists. 

Finally, the company only chose cities in which property prices have been rising for the past two years so any investor should be able to sell up for more than they bought for. 

Thierry Vignal, co-founder of Masteos, said that property prices in Poitiers do not yet reflect the city’s level of attractiveness. 

“The potential profit margin is very interesting and the risks are limited,” he told Capital.

The average price for a 30 square metre studio in Poitiers is €73,900, with the average rental price €10.80 per square metre. 

This gives investors a potential gross return of 5.26%, according to Masteos. 

However, this does not take into account property tax costs or building costs (charges de copropriété). There are also, of course, upfront notaire fees to pay.

It also does not factor in that renting to students is more likely to mean regular maintenance is required and that a new tenant will often need to be found every year. 

Masteos picked also picked out Caen, Nancy, Montpellier and Marseille as interesting cities for investors. 

Start-up promises property sale within five months

An Italian start-up offering clients the promise that if they cannot sell your property within five months they themselves will buy it has recently entered the French market. 

Casavo raised €400million in equity and debt funding this summer to acquire French start-up Proprioo. 

“France is the biggest opportunity in the European residential market in terms of the number of transactions," said Giorgio Tinacci, founder of Casavo. 

The idea is that if a person chooses to sell a property through Casavo, either the transaction is completed in five months or Casavo buys it at a fixed price set in advance. If Casavo buys it, they will get it with a 6% discount on the market price. 

Casavo’s fees are 5% of the transaction cost if the property is purchased by a third party, or nothing if Casavo ends up buying it. 

It will initially launch in the ninth, tenth, eleventh and twelfth arrondissements of Paris before expanding to the rest of the capital. The idea is for it to later launch in other big cities such as Nice, Lyon, Marseille and Nantes. 

Last taxe d'habitation for 20% of main homeowners 

The 20% of people in France who are still subject to the taxe d'habitation on their main residence will pay it for the final time this November before it is scrapped. 

This property tax was abolished for 80% of homeowners in 2020 but still applied to the wealthiest fifth of the population in France. The amount for the people still subject to it was reduced by 30% last year, a further 35% at the beginning of this year and will finally be totally abolished so that from 2023, no one in France will pay this tax on their main residence. 

People who own second homes in France still have to pay this tax and at the full rate.

Read more: Which French households must still pay some taxe d’habitation in 2022?

Read more: French second homes: taxe d’habitation rates continue to rise

The final scrapping of the taxe d'habitation comes as the €138-per-year TV licence (redevance TV) is also cancelled in France. 

Read more: Do I need to do anything if eligible for French TV licence refund?

New rules for sales and rentals of coastal properties

Estate agencies in France will, from January 1, have to specify in their sale and rental adverts if a property is located in an area exposed to coastal erosion, a new decree published October 1 states. 

The advert should also mention the website www.georisques.gouv.fr where buyers or tenants can find out about erosion risks to the property they are interested in. This website is currently not working. 

The new ruling is part of the loi Climat et résilience. 

It obliges the seller or landlord to provide a report about the risks of coastal erosion to any potential buyers or tenants on the first visit to the property. 

This document must be less than six months old. 

Additionally, the seller or landlord will have to keep the potential buyer or tenant up to date with any changes during the whole process of confirming the sale or rental agreement. 

If the information is not accurate at the time when the promesse de vente or rental contract is signed, the transaction can be legally cancelled. 

Read more: Map: The 101 French communes affected by coastal erosion

Read more: Coastal boom, inflation: Six French property trends from notaire data

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