Foreign Perspectives

Archive for the ‘Immigration’ Category

An Australian, an Irishman and a Frenchman were sitting in a pub.

Australian: Gee, it’s wet today.

Irishman: Sure is, almost as wet as we get in the west coast of Ireland.

Frenchman: You’re not French. You’re not allowed to criticise the weather in France. I’m going to start a poster campaign against you and have someone come round and smash your place up.

Australian: Wow, do you mean that the weather in France is just the same as it is here in Belfast today?

This one is specially for SuperFrenchie 🙂

We’re looked at French housing, but what about your house in the UK?

Even if you are absolutely certain that you are going to spend the rest of your life in France, it’s best to retain your house in the UK if you can so that you have a fall-back position in case things don’t work out in France or you change your mind about living here. Not everyone is able to maintain houses in two countries of course and it will probably make finances a little tighter in France than they would otherwise be. However, once you sell your house in the UK you can find it very difficult to get back into the housing market. In our own case, our UK house went up over 40% in less than three years and effectively beyond our reach had we sold it when we moved.

If you are lucky enough to be able to keep it, you should try to rent it out. Not only will this keep the house occupied but it will help pay the mortgage etc. without needing to rely on income from France to pay for the various bills that will arise in the UK.

If you are going down the rental route, you will almost certainly need to change your mortgage to a buy to let one as few normal residential mortgages allow you to rent out your property easily. Your house insurance also needs to change to reflect the fact that you will have tenants in the house and that it may be unoccupied for extended periods of time between tenants (don’t rely on 100% occupancy!).

Although you could try to find tenants yourself, it’s much simpler to arrange the rentals through a letting agency as they can arrange for work to be done and to inspect the house before during and after each tenancy. This service usually costs around 10% of the rental income plus advertising costs of around 100 in advance of each tenancy.

Costs will continue during periods that you don’t have tenants. For instance, you are still liable for aspects of the electricity, gas and water bills. Throughout your ownership you also need to pay council tax / rates and, of course, insurance.

It’s difficult to be definitive about this decision. Keeping a house in the UK does entail a lot of costs from insurance to mortgage not to mention the additional effort that you need to put into managing your house (even if you have a letting agent). However, selling can be quite a permanent thing to do if you live in an area where prices move quickly and, to my mind, it’s best to retain your house as a fall-back should things in France not work out as you expect.

If you do decide that selling is the best option for you, it’s best to get this in motion before you leave the UK as otherwise you could find yourself liable for French capital gains tax on the proceeds of any sale.

Separately, but related to this topic, is the issue of maintaining a UK postal address. This is one thing that is definitely advantageous to do. If you can change the address for several credit cards to that of a friend or family member before you go, this will effectively move your credit history to their address which we have found to be very useful over the years.

Next week, we move onto French banking.

In many ways, the house buying process in France is quite similar to that in the UK but there are important differences.

Once you’ve found a place, the first stage is to sign a Promis d’Achat (promise to buy). If the seller accepts this, then you have your house as they aren’t allowed to even show it to anyone else (ie no gazumping), subject to you following through with the later stages of the purchase, of course. Signing this commits you to buy the place at the agreed price but only commits the seller to sell to you if they accept this contract.

Since it commits you to buying, you MUST add a “subject to mortgage” clause if you plan on getting a mortgage for the purchase. The mortgage clause needs to include the bank that will be giving you the mortgage, the rate and the term of the mortgage so if you are hoping to get a French mortgage you’ll need to see the bank first. If you haven’t done so already, you should open a French bank account at this stage (links to the various banks are in the Foreign Perspectives directory) During the next two weeks or so the notary will draw up the Compris d’Achat which is the sale contract and will come with an inventory of what’s included in the price and a completion date for the sale. You need to pay a deposit of 10% (sometimes 5%) to the notary at this point. Although you and the seller can use the same notary, it’s best to have your own one (this doesn’t cost any extra as the notaries split the fees). Read the inventory very carefully as what is understood to be included in France is very different to what is understood in the UK. For instance, you can be left with bare wires where light fittings used to be and even gaps where there used to be doors.

On the completion date, you go along to the office of the sellers notary and sign for the property. You need to sign every single page of the contract so allow an hour or perhaps two to do this. Once completed, the property and everything in it is yours. Unlike in the UK, everything you find within the property at that point belongs to you which sometimes includes the likes of unwashed dishes in the sink but can also include furniture and the like eg in our case we acquired a very nice desk valued at 9,000‚€!

Once the sale is completed, the estate agent will arrange to have the electricity, phone, etc. transferred into your name. If you are buying a commercial property (eg B&B) you must be registered with the Chambre of Commerce before these can be transferred into your name.

In years gone by the French were one of the most backward nations in the world with their use of the Internet. They stuck resolutely to their France-only Minitel system and, for the most part, refused to have anything to do with the American-dominated Internet.

That situation is changing very quickly. For example, whilst we had our first ever online reservation from a French person just two Summers ago, nowadays they are commonplace. So, it’s not surprising that the election campaign has gone online in an equally big way. Blogs are coming to be an expected part of that with the Royal campaign blog started early on and campaigning even taking place on SecondLife. Not so long ago, I’d have said that the SecondLife campaign office was totally crazy but apparently the swing against the recent EU referendum was started with the blog from an obscure teacher in Marseille so it would appear possible to swing public opinion in the real world from our vantage point in the virtual one, even in France.

But what about the real politics? Royal prefers intuition to ideology and is said to be good on the “small things” that arise in truly local politics and weak on the bigger picture. She is deliberately vague and promises to consult the people which are, in some ways, excellent approaches. The problem is that when one consults the people one finds out what the people want, not necessarily what they need.

Where she is more specific there are clear contradictions in her policies. In her economic policy objectives she wants to raise the minimum wage substantially, to abolish the CNE labour law (which makes hiring & firing easier for small companies) and to promote even more mass-unionisation (in an already highly unionised country), all clear job destroyers. Yet, on the other hand, she also hopes to create 500,000 youth jobs, generate training opportunities for longer term unemployed youths and even review the 35 hour week. Those two groups of objectives seem to be in clear opposition. Throughout her policies there is the underlying strand of more state intervention with talk of state aid (barely mentioned elsewhere in the world), increased tax on dividends (thus discouraging investment), state regulation of banking fees (no doubt to support the indigenous banks) and renationalisation of EDF/GDF.

What about Sarkozy though? Well, to our eyes he appears more of a “normal” western European politician with his hopes to encourage the job creators to return home to France, to cut taxes and generally free up the state burden on the population. However, he’s unlikely to do much about the farming subsidies or go far to address France’s head in the sand approach to globalisation.

The problem that both face on behalf of the country is that, whilst they might complain about their taxes, the French like their cozy system of benefits and jobs for life. After all, why would anyone want to bother working a 40 hour week when they could work a 35 hour week for the same salary? For that matter, if Royal’s proposal to take unemployment benefit to 90% of that received from one’s previous job, why would anyone want to work at all? This approach is quite typically French in totally ignoring what the rest of the world is getting up to. That, of course, is the main problem with French politics. For example, when an attempt was made to make it easier to hire & fire young people in early 2006, the predictable result was riots in the streets and, equally predictably, a climbdown by the government. Whilst the people needed jobs, what they wanted were jobs for life.

I suspect that this time around the French people will get what they want which is pretty much what Royal has on offer. However, what they need is Sarkozy, if he’s strong enough to push through his policies in spite of certain opposition to a number of them.