How might Brexit affect owning a property in France?
Brexit! There, I said it. I am sure the Editor is going to have kittens at yet another Brexit story (see Brexit Report), but here it goes.
Clearly, this story is dominating the English-speaking press at the moment and the claims and counterclaims by one side then the next is bewildering, to say the least. Even the experts can’t agree on what is best for Britain.
As far as current and potential French homeowners from the UK are concerned, I can only speak for myself and Leggett Immobilier when I say the number of enquiries from the UK hasn’t slowed down, and our recent attendance at the “Place in The Sun” show in Manchester heralded an almost record number of new client queries.
What is clear, though, is that whichever route the UK takes on June 23rd, 2016, it will have an impact on owning a home in France. However, I think I can state categorically here that we won’t all get thrown out of the country the following day … At least I hope not, I love it here.
What are the implications of a Brexit on my French property purchase? Our (personal) view is that even if the vote was to leave the EU, there would be little in the way of substantial change to UK citizens living in France and a Telegraph article confirmed this when it concluded that this claim of significant change by the out campaign is not grounded in legal fact, as the Vienna Convention on the Law of Treaties 1969 would come into play. It contains articles that are based on “acquired rights”, which individuals build up over time and hold despite any changes in future treaties enacted by their nation.
It says that the 2 million Britons abroad have “acquired rights” and the NHS, for example, would be responsible for paying the cost of pensioners abroad.
We’re convinced that the government will take every step possible to protect benefits in any withdrawal discussions, it’s a financial and political minefield ... imagine all the (generally elderly) citizens coming back to the UK and the burden this would place on the NHS.
All independent polls (the FT shows a poll of polls updated daily) are indicating that the most likely outcome is a vote to stay in. However, to be prudent, we have outlined below the three scenarios in the unlikely event of an “exit” vote:
1. UK retains membership in the EEA (European Economic Area) – this means that existing rules on freedom of movement would still apply.
2. A compromise solution – falls short of the existing rules but with special arrangement for certain citizens (we think this is the likely outcome).
3. No agreement between the UK and the EU. Even given this scenario the EU tends not to impose visa requirements on wealthy countries.
In short, whatever the outcome, the view held by Leggett Immobilier is that we see little in the way of substantial change to UK citizens living over here currently.
It is likely the uncertainly at the moment is going to cause fluctuations on currency for example and recently we have seen the previous gains of sterling eroded, although our Currency Partner (Foreign Currency Direct) has concluded that, much like the run up to the Scottish independence referendum and UK general election last year, there is a roller coaster effect and buyers should be prepared to exchange currency when there are inevitable peaks.
There could be some changes to how one’s tax liabilities on property are calculated should the UK exit, however this is an article in itself and each individual is treated differently anyway, so it is best to seek independent advice on your finances.
Finally, some scare stories have suggested that UK citizens won’t be able to own property in France. This is simply untrue and many non-EU citizens already reside and own second homes here on the French Riviera.