Jessica Bown: Living the dream
We've made some changes
to The Sunday Times
APPARENTLY I am not the only Briton to decide that living overseas is the way forward.
Since the emergence of the sub-prime crisis last year, interest in property investment abroad has increased by 96%, according to internet search engine Google.
Many of those fleeing Britain for warmer climes are retirees keen to make the most of their new-found freedom.
A poll from Hotproperty.co.uk found that almost half of us would prefer to spend our later years abroad rather than move to a retirement spot in the UK.
But whether or not they are retiring, overseas buyers should not forget that there will be variations between the laws and processes involved in Britain and wherever you are looking.
France, for example, seems pretty similar to Britain, but there are still quirky differences that it is essential to understand.
One thing it is vital to be sure of, when buying in France, is that the property has a clean title.
If someone dies intestate, their property is split between their spouse and any children. So if the title deeds are not spotless, a claim could potentially be made generations later.
Those hoping to make a quick profit on an investment property should also be aware of “plus value”. This is the property law stating that, if you sell a property that has increased in value within five years, you can still be forced to sell it for the price at which you bought it.
How crazy does that sound to a Briton who has cashed in on the property boom?
The reasoning behind it is interesting, though. The French think that someone who is selling a property for significantly more than they bought it for just a few years ago – and without making improvements – must have basically screwed the former owner.
Its aim is to prevent the weak or the elderly from being tricked or coerced into selling at an unfair price, which is a rather nice sentiment when you think about it.
If you don’t know your French property laws, however, a little old lady could end up playing a trick on you if you buy her home “en viager”.
When I first started looking for flats in France, I found a beautiful three-bedroom place with land in a stunning location – and within my price range.
When I remarked on its low price to a French friend, he laughed and told me that the current tenant – an 83-year-old lady – would live there until she died even if I bought it.
Once we had established that I wouldn’t have to live there, too, and look after her, I looked into the details and discovered that “en viager” buyers basically have to wait for the owner-occupier to die, and pay an annual rent until that time.
It’s like equity release, but privately funded. The initial price you pay is very low, but if the former owner lives for many years, you could end up paying over the odds.
You do have to wonder, however, whether there are any figures revealing peaks in sudden deaths among those older people who sell their homes this way.
I decided against it – purchasing “en viager” that is, not murdering anyone – because I wanted a place to live in pretty much immediately.
It could be a good plan for an investment buyer with an appetite for a bit of risk, though.
After all, if the owner dies within a few years of the purchase, you will get the property for a very good price – and can then take advantage of the rental value.
If you do plan to rent a property in France, it is also worth remembering that, if you have a tenant over the age of 70, you cannot evict that person or raise the rent unless you can find an equally nice place for them to live at the same price.
The cyanide solution aside, both these laws show a kind of institutional consideration for older people. In fact, many aspects of daily life here demonstrate the greater respect with which the French treat their elders – which may come as a welcome surprise to those who retire here.
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