Most of us are pretty good at budgeting to buy our new home but when it comes to budgeting for the search process itself, we tend to be a little woolly about the whole process, often thinking of it as more of a holiday with a few property viewings thrown in for good measure. The properties you’ll be viewing aren’t in the next street and you can’t pop over to see them after work. This search takes time and with that time comes costs. I’ve therefore given you some idea as to what it will cost you to search for your French home and also what you need to get in place during this period to enable you to smoothly pave the way for your move in a few months time.
Costs of searching for your property
Consider things such as: Ferry costs, air fairs, food, car hire, fuel, accommodation. Now multiply it by how many trips you’ll think you’ll need to make and then if you’re doing all the searching yourselves and are not even sure on what department you’d like to live in, double this calculation!! I’d suggest allocating around £1,000 per 4 day low season trip, double it if you intend to conduct your searches during school holidays. This should give help cover the basics, plus the odd little treat during your trip too.
If you’d like further advice on the actual search process, please read our survival guide!
Income tax and estate planning
Don’t be fooled into thinking this is just for the super rich. The French income and estate laws are very different to the UK and these differences affect everyone. If you go on any ex pat forum you’ll find reams of comments about how people have been caught out by not being aware of the differences in these laws. So you really should get professional tax planning and succession planning advice for your specific circumstance.
However, even before you leave the UK its also important to do the following:
- Notify HMRC about moving from the UK. Depending on the time of year you move you might also be entitled to a tax rebate.
- Also notify the HMRC if you’re moving to France but leaving behind a let property in the UK, as there will still be HMRC tax implications to consider. The French authorities will also want to know about UK property income too, so you’ll also need to speak with either an accountant or tax planner specialising in both French and UK taxes. There is a double taxation treaty between the UK and France but this isn’t an automatic process and both countries have different ways to calculating the criteria as to who should pay and how much.
- Think about whether you should continue with paying UK National Insurance Contributions. This is often not expensive and will give you some level of safety net in the future.
- Review your UK life assurance and savings policies to be sure they’re still relevant to your new circumstances.
- Be aware that non-residents of the UK can (normally) no longer contribute to ISAs and that non-residents of the UK can only pay a limited amount for a limited period into an existing UK pension and get tax relief.
- Be aware of large cash balances held in the UK and how this will affect how you’re taxed in both the UK and France. Yes there’s the double taxation treaty but it’s not as straightforward as paying taxes in one country and hoping the other won’t tax you.
- Anyone intending to split their time equally, or nearly equally, between France and the UK should be aware of their residence status and the implications of the statutory Residence Test (April 2013).
- British people may need to complete a UK tax return even after leaving the UK.
If you’re moving to France for good, you could benefit from moving your pension overseas into another scheme, such as a SIPP or Qualifying Recognised Overseas Pension Scheme (QROPS) but again taking professional advice will pay dividends in the long run and could be the difference in you living happily in France for many years, or, as has been the case for so many ex pats in recent years, having to move back because their funds just won’t stretch far enough.
This is often overlooked but if you’re moving lock and stock to France, there’s really no way around it, this will be costly. I’d suggest you get at least 3 quotes from reputable movers and if possible get them to come to you for a chat. You’ll have a far better understanding for what sort of service you’ll be getting this way. And be sure to check their insurance policy and industry credentials. There have been cases of owners entire home contents ‘vanishing’, never to be seen again. So be prepared to pay for a decent company to do the job for you. A very rough guide is to allow around £5,000 in removal costs to transport your home contents from the UK to the south of France.
One further piece of advice about the actual move is really think about what you need to take with you. As an example, curtains; will they work in your French home? Ebay and car boot as much as you can before you leave. We took so much with us to France that stayed in boxes in our loft for 7 years, only to come back to the UK with us on our return. By then it was all so out of date that we threw most of it away!!
This is the area that catches out so many Brits intending on buying in France. Doing a rough calculation on today’s exchange rate could end up costing you thousands should this rate move in the opposite direction, even by a tiny percentage. Don’t forget you’re most likely working in hundreds of thousands, so it’s a very different scenario to changing holiday currency.
Lets assume you have a budget of £200,000 and today’s exchange rate is 1.26 this means you’d have €252,000 to spend on your dream home. However, should by the time you complete on your property, the rate move to 1.21 (just a half percentage drop) then you’re budget would have reduced by a sizeable €10,000.
Therefore, our advice is that by working with a reputable currency exchange company could potentially save you thousands of pounds. We like Moneycorp for their personal service, rather than everything being run through a faceless website or worse still, a call centre person who has no idea and doesn’t care about your personal circumstances.
All good currency exchange organisations will work with you to ensure you pick the right package for your particular circumstances and will even advise you how to in effect lock in your exchange rate. Our advice is call them before you start exchanging funds and you’ll soon get a feel for whether you’re going to receive good service or not.
We had a bad experience a few years ago when we tried to use one of the more well known companies with the shoddy treatment by one of their inexperienced members of staff. Therefore, we now only use organisations who treat us like human beings. This for us is important when transferring large sums of money, as we feel far more comfortable speaking with an experienced member of staff and knowing that this is the person we call with any questions we have.
Feel free to contact us with any questions you have about buying your home in the Languedoc
[contact-form][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Contact Number’ type=’text’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form]