to buy a fixer-upper in France before Brexit?

[arielmanto]

We have a small house with a mortgage in the UK, which we manage happily on my income. We bought it a year ago, mortgage rate is fixed for another 4 yrs.
Our long term (5 year ish from now) plan is to save up enough to buy a small house in Charente with a bit of land, as we have none here in the UK, living in the £££ south west. This area of France is very very cheap and we'd be looking at £40k for the kind of thing we could live in without having to renovate.
Brexit has put the willies up me (so to speak) about timing on this. We could, with a smallish loan, buy something for £30k cash now, and pay off the loan over the next 5 years.
Pros - would own before Brexit makes it undoubtedly harder to do so, loan rate is very very good at moment

Cons - Would have to buy somewhere needing work, which would be ok as we would be able to fix it up year on year - but would obviously be paying French taxes on it all that time too

I am going back and forth on this. I can understand that yes, people outside of the EU can buy property in France, but there are more hoops to jump through, more assessments to be done etc, and I really don't want the hassle.
I cannot see that after Brexit we would be penalised by the UK govt for owning property in France as that wouldn't be to the benefit of many of the wealthier people who wanted Brexit to happen and own second homes abroad. (Cynical, perhaps)

What thinks the hive mind?

No capital gain, no capital gains tax, no problem

Not really true for most people who need their money to make a return. For most people buying a house is an investment. If the house does not appreciate or any appreciation is eaten up by tax this is usually a problem.

For most people buying a house is an investment If you buy an apartment in town with a spare room to rent out, why not. But the OP is looking in a mostly rural area. Prices are rising in cities, not in the countryside. Where we are in rural Haute-Saône, prices may not even have bottomed out yet.

Off topic: I like the way the French capital gains tax system stops people flipping properties. That's what keeps it affordable for the likes of me.

Cons - Would have to buy somewhere needing work, which would be ok as we would be able to fix it up year on year - but would obviously be paying French taxes on it all that time too

Earning in sterling but spending in euros? Don't do it. Find a better way.

Why would you be penalised for owning French property? And sure it would be less faff to do the extra paper work than do up a house? Maybe I am an ignorant forgeiner but I don't see any issue in buying property in the EU from outside it.

Also don't put your money into euros/the EU to 'keep it safe', only someone with the memory of a goldfish would think that was safe. If it us about maintaining capital to any extent than turn to safe stocks and a carried portfolio. If you invest wisely you will be able to rent a lovely place in France whenever you want it without worrying about upkeep etc out if the profits.

Safe is relative. The euro probably won't fall close to zero next April, but the pound may well do.

It’s not something I would do. There’s just too little information to go on about how things will run in the near to medium term to make a sensible decision.

There are some factors that would make a difference to me- if I had family close by, or ancestry there (particularly if that ancestry was close enough to have a future citizenship claim) or if I had a solid, in demand and specialised job with a company who had a site close by and transferring could be a future option. But outwith those factors that confer options independent of UK/EU Brexit terms, it’s not something I would see as being my best option with my time, energy and resources.

I have a place in France which is 'liveable' but has no heating and currently my money to finish repairs and add heating before next winter is 'stranded' in the UK. Watching the Pound fall in value with nothing I can do about it is killing me.

Wow £30k is really cheap. Life is short - I’d say go for it! Did you watch that series called The Chateaux? I loved it. It sounds really exciting. If you can why not? I hope it works out for you OP.

Buildings may be 'cheap' but materials and tools are very expensive and unless you do it yourself labour is expensive and quite tightly controlled, getting non French (or French registered) workers in is very frowned upon.
It is not that France is cheap, just that the UK is often stupidly expensive. Overall 'quality of life' is similar but financially skewed differently.

I think you would be insane to do this quite frankly.
Apart from normal issues:
Who knows what might happen in the next few months.
If you want to live over there, you may have no access to U.K. pensions or savings. If over here your pound will be tanking against euro so everything will be hugely more expensive.
If it gets really bad we may see exchange control again.
I am not an expert. Seek advice.

You'd be insane to buy a fixer-upper in France at any time tbh, let alone just before Brexit.

Why spend £30k on a property that is going to cost you at least twice that much to fix up, when you could buy a small property in a reasonable condition for £50-80k? In much of rural France, older properties - especially village centre houses - are cheap. French buyers usually want soulless modern villas (bungalows); where I live you would pay €150-200k for a modern 3 bed villa on the outskirts of a village, €80-90k for an older 3 bed house in a village or town centre. You can basically halve the price for a property that was built before 2000, has stairs and is within walking distance of a shop.

My in laws are French in France. They made come comments in passing this summer that almost all the Brits in their area have sold up. Had my nails done and the manicurist mentioned that lots of her British clients had gone.

If you can buy outright with no mortgage it may be a decent investment as the Euro is unlikely to lose value against the Pound - for the moment at least.

But there is no way the border crossings will be smooth for just nipping across for a weekend in a no deal or hard Brexit. Just no way. The infrastructure isn't there. It'll be an absolute headache.

Given that most places come on sale in the spring, I don't think you'll lose much by waiting until then.

but it would take an absolute worse case scenario for tourist visas to be re-introduced

If there is no deal, the UK becomes a 3rd country and you will need a Schengen visa to visit an EU country. Which will involve a personal visit to an EU embassy. Not great if you don't live in London.

If there is a deal, even a hard Brexit, I imagine we will be subject to the ESTA-type arrangement the EU has mooted which I think will cost 7 euros for 2? years.

I know from painful experience that @Mistigri is right about fixer-uppers. The one exception might be certain young French guys I know of with serious DIY skills (farm labourers, roofers, builders) who have bought cheap old houses in their twenties and done them up themselves over time. If the OP is middle aged and DIY illiterate like me, this obviously won't apply.

Off topic but interesting: DP knows a 27 year old farm labourer who recently bought, very cheaply, a big farmhouse without land, in the centre of a hamlet. He then approached an elderly neighbour and offered to buy his orchard. He ended up buying the orchard en viager (where you pay up front but only occupy the property when the seller has died) so that his future DC would have a garden to play in, not far from the house. Pretty good idea IMO, and goes to show that there are bargains out there if you know where to look and how to go about it, etc.

The only people I know who have a success of fixing-up are those who did the work themselves and have the marketing knowledge to run a successful gite or B&B business. And IMO they would still probably have got a better return putting their cash into the stock market or - even better - buying a flat in London or Paris.

Successful fixer-uppers are invariably people with an independent income and other assets, who are primarily investing in a lifestyle.

Are the French really going to make it difficult for the millions of UK people to visit France and spend money? I doubt it, tourism is one of their biggest industries

I think my aunt and uncle may qualify as successful fixer uppers, though I've never been nosy enough to ask for the numbers! They bought two village houses in Perigord before it got too expensive (i.e. mid 90s or before) and did most of the work themselves. Both were teachers and so had the long summer holiday available to go there, and DUncle's subject was woodwork, so he has pretty good practical skills. In England they had already run a seaside B&B (circa 1980 I think) then converted the building back to a private house once they no longer needed the extra income. They haven't really exploited the holiday lettings potential of the Perigord houses - just a few bookings now and then - but I assume that's a choice since they are now retired and thus presumably financially secure.

Are the French really going to make it difficult for the millions of UK people to visit France and spend money? I doubt it, tourism is one of their biggest industries

We are not talking about tourism here. Chinese visitors, for example, have to get a Schengen tourist visa to visit France; it doesn't seem to stop them coming to Paris and spending lots of money. But they would not be able to buy an old house on a whim and spend a couple of years in France doing it up - and neither will Britons if there is a hard Brexit.

It is not an issue for tourists that you CAN'T go to France, or indeed anywhere in Europe or the rest of the world but it will get a little more expensive (buying a visa) and you will need to do it in advance and not just pop to a ferry port or airport 'on a whim'. Insurance may get a bit more expensive too.
But hey, 17 million voted for this so at they would say, 'suck it up'.

Being a third country will not mean we'll need a Schengen visa. We may need to prove means/intention to leave on entering the Schengen area. And yes, will probably need an ETIAS but in the grand scheme of things, hardly a massive issue. The ability to travel to the EU as a tourist is pretty low down the list of concerns for a no deal!