Guide to retiring to France
By Maria Thermann

Guide to retiring to France

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France still offers retirees some amazing property bargains, if you're prepared to spend a little time and money to do up an old farm house or historic town-house. From mountainous landscapes to rolling green hills, from the City of Light to the beaches of the French Riviera, France has a huge amount to offer, despite the country's reputation as a high tax jurisdiction that targets foreigners in particular. French President Macron's reforms to the tax legislation will eventually benefit everyone, including expats, provided his reforms make it past the protesters. With Brexit looming for British retirees and the City of London's financial sector workers especially, Paris has seen unprecedented demand for apartments and town houses of late, something that has been reflected in surging house prices for the French capital. However, elsewhere in rural France it is still possible to find a dream retirement home for under £300,000.

Taxation

France can be a tax-efficient place to live during one's retirement, providing you understand the tax implications of your situation and obtain tax advice from a specialist lawyer who understands both taxation and legislation of your home country as well as those of France.

The French taxman will consider you a tax resident if your main home (called foyer) is in France if you spend 183 days and more in France during the French tax year (which corresponds to the calendar year), or if you spend more time in France than in any other country, or if your principal activity is based in France, or if France is home to your most substantial assets.

Although many French taxes carry a similar name as the ones in Britain, they are calculated in a totally different way. Some do not even exist in the UK, such as wealth tax for example, or for some people, healthcare charges.

Cost of living in France

For Britons retiring to France, there will be exchange rate implications due to the weakness of the Pound against the Euro. Your UK pension will be paid in Sterling, and will thus be reduced or enhanced by whatever the exchange rate of the day is going to be. This means if Brexit affects the value of Sterling further in a negative way, your pension won't stretch as far as you might have hoped and buying a French home will be more expensive.

Over the past ten years the cost of living in France has risen considerably. But this should be seen in relation to where you live. Buying a home in Paris has gone up by between 70% and 95%, compared to purchasing a home in the south of France, such as Marseille, Nice or Perpignan. Similarly, things like renting, food, public transport and going out are far more expensive in Paris than they are in other parts of the country.

This is also true for utility costs, which are mostly cheaper than they are in the rest of the European Union, except for water, which is among the most expensive utilities in the world and can vary considerably from French region to region. However, food, beer and wine, public transport, entertainment and property tend to be cheaper than they are in the UK and some of the original EU countries.

French Healthcare

France's healthcare system is regarded as one of the best in the world. Good news for anyone hoping to retire to France: the country's public and private hospitals offer a similarly high standard of care and there are no significant waiting lists for operations and no struggle to find hospital beds for patients either.

Until the UK leaves the European Union for good, British citizens and retirees in receipt of a state pension from another EU country are entitled to a contribution from the French government of 70% of the cost of treatment. You can get cheap and mandatory top-up insurance to cover the remainder.

EU citizens retiring before qualifying for a state pension can receive French social security health cover for up to 30 months, providing they obtain an E106 form from their country’s social security department, before they leave for France.

Some non-EU citizens qualify for receiving totally or at least partially free French state healthcare, depending on their country’s reciprocal social security agreements.

Those not entitled to receive free healthcare in France will need private health insurance. If you live permanently in France, this will be a "voluntary insurance" policy (called assurance volontaire). The national health service does, however, cover the cost of all treatment for life-threatening illnesses and accidents.

Buying Property in France

The French property market also took a hit during the world-wide economic crisis of 2008, but in the always sought-after regions of the Alps, Paris and the Cote d’Azur, confidence among home buyers and investors is gradually returning. In many other parts of the country, especially in rural areas, prices continue to drop, so now is a good time to buy a retirement home in France, before buyers are priced out of Paris and other sought-after areas and driven back to rural areas.

In some parts of the country home values have fallen by up to 40% since prices peaked in 2007. With Sterling performing badly against the euro, buying a home in France has become more expensive for British retirees since the Brexit referendum in June 2016.

However, British buyers are still keen to buy French property in the capital, the Alps and along the Cote d’Azur, but they need bigger budgets these days to be successful. What is evident is that the desire to buy a dilapidated farmhouse to do it up is waning. Brits now buying are more likely to choose off-plan properties and somewhere that has good rental potential long-term. Many people are apparently choosing to buy their retirement home well in advance, and are thus looking to rent it out until they are ready to make their permanent move to France. This means buying a property near excellent amenities within walking distance, close to restaurants, the beach or within a ski resort and close to an airport - preferably one served by low-cost airlines.

Settling into your French retirement home

French people are more reserved, generally speaking, than their Italian or Spanish counterparts, so it takes more of an effort to get to know them. Learning French is essential, if you are planning to retire or relocate to France. Expat organisations such as InterNations.org or aaro.org, the Association of American Residents Overseas can provide valuable advice about day-to-day living in France, and also help with integration, as they list local expat groups where one can make new friends.

InterNations is one of the world's leading networks for expats in 390 cities worldwide, while AARO has its headquarter in Paris and is an international, non-partisan association with members in 21 countries that researches issues that might significantly affect the lives of American citizens living overseas and keeps them abreast of such issues. Local embassies and Chambers of Commerce are also excellent sources of information. The US embassy provides its citizens with information on issues as diverse as childcare, American clubs in the overseas country, Veterans affairs, education and sports, for example.

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