Renovation Property in France
If you’re working to a small budget then buying a French renovation project allows you to get on the property ladder now and to add value to your property later when time and finances allow.
But caveat emptor or ‘buyer beware’ is the first rule of buying a property to renovate. Both buyer and seller commit themselves early in the French conveyancing process and while this ensures you are not gazumped, you want to avoid a situation where you wish you had been! Look before you leap.
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If you are buying a property which has agricultural or part-agricultural use with the intention of converting it into residential use (e.g. a barn conversion), you should insert a ‘conditon suspensive’ (get-out clause) into the compromis de vente (initial sales agreement) which will allow you to withdraw from the transaction and get your deposit back if you don’t get a positive CU or certificat d’urbanisme (change of use certificate).
If you’re buying a property already used for habitation with the intention of renovating it then a CU is not technically required. However, you may still need one if the building has not been lived in for a long time and is not connected to water and electricity – this because the DDE (planning office) will sometimes refuse permission if the building is too far from the mains water or electricity networks.
There are ways round such problems - you might have well water for example or you might choose to generate your own electricity with solar panels or a turbine (you could benefit from a tax credit on 50% of the cost of materials). However, you need to know if this is your only option before you commit yourself so, if in doubt, ask for a positive CU to be a condition suspensive of the compromis.
Lack of mains drainage isn’t such a problem, most rural French properties are on septic tanks anyway. Other reasons cited for refusal of a CU are when a property is too close to animal sheds or too far from a fire hydrant in case of emergency.
On the financial front, don’t forget to budget for the estate agent’s commission (usually included in the advertised price – but always check), and the notaire’s fees (see the French Property Centre Notaire’s Fee Calculator). You must be realistic in forecasting renovation costs or you could end up paying more than you would for an already renovated property – and this after a lot of time, effort and stress!
A property which merely needs updating will usually be described as ‘à refraîchir’ and typically need a new kitchen and bathroom plus redecorating. Renovation projects are described as ‘à rénover’ – and this can mean a multitude of things. Firstly check with a local builder or English surveyor that the ‘gros oeuvre’ (the structure) is sound - if not you might be able to renegotiate the price. If all is well the interior may need gutting and new floors and walls installing, it will probably need rewiring and new plumbing.
Once you’re the rightful owner of the property you’ll want to get to work – but don’t do so without first checking that you have permission. The good news is that internal alterations can be carried out without applying for a ‘permis de construire’ (planning permission). If you want to add a window or outer door or make other external alterations such as repointing or rendering you need to submit a ‘déclaration prélable’ (a prior statement) – as you would if you want to add up to 20m2 to the footprint. The decision normally takes one month. Anything over 20m2 and you need a permis de construire which normally takes two months. Repairing a roof does not require planning permission and adding a velux (roof light) or simple dormer window just requires a ‘déclaration’ - but raising the roof or the walls requires a ‘permis’.
Next, will you do the work yourself or employ a builder? Know your limitations – while you might be able to replace a bathroom suite or kitchen units don’t be tempted to rewire your house – if it’s done to UK rather than French standards it will invalidate the house insurance in the event of a fire. If you’re not on site it might be worth employing a project manager to make sure work is done on schedule, to budget and to the required standard – doing this yourself is difficult if you don’t speak the language and you’re back in the UK!
Entrusting your renovation project to a recommended builder has advantages – not only does he have the professional expertise (and speak the language), but he has the sometimes arcane knowledge of the documents required for planning permission. To authorise a builder to act on your behalf sign a ‘mandate pour déposer un permis de construire’ – which he will sign as ‘mandataire’. He is likely to charge you about £1,000 plus TVA (VAT) to steer the application through (although you pay TVA at the reduced rate of 5.5% on renovation projects).
If you take the builder route, make sure sure he is registered with a siret number at the local chambre de commerce – this number will be on the devis (quote) he gives you for the travaux (work). This number ensures that you have recourse through his insurance if the builder goes bust mid-way through your renovation project – demand no less from an English builder working in France. Get two or three estimates – they are usually valid for 3 months. Before deciding, why not ask builders to show you renovation projects that they have completed for other customers in the area?
Once you decide on the man for the job, make sure the devis includes a start date, an estimated completion date and itemised list of work to be undertaken – this can serve as a checklist before you make staged payments. Make sure the devis includes written confirmation that the work is covered by his ‘assurance decennale’ (10 year building insurance) and that it includes the corresponding ‘attestation’ or certificate. Most important of all, make sure that the devis includes the words ‘lu et approuvé et bon pour accord’ (read and approved and good for agreement) before the signatures of both parties.
A good builder will have a full diary so engage him as early as possible – if you need a ‘permis de construire’ (planning permission) this can take two months to obtain so with a bit of luck you can synchronise the two. The builder will ask for an up-front deposit (between 10% and 30%) – agree a time clause so this is returned to you if the date passes without permission being granted. Keep all receipts – if you sell your house on within 15 years, certain expenditure on artisans can be used to offset any capital gains tax (16% to UK residents with a second home in France as opposed to 26% for French residents).
Valid until 31st December 2010 is a reduced VAT rate of 5.5% (usually 19.6%) on renovation and improvement works carried out by professional (VAT declared) tradesmen – both for labour, materials and project manager’s fees. You do not have to be a French resident and this applies to a second home or a principal residence but not to a commercial venture. Be guided by your builder – whom you will need to furnish with an attestation (declaration) available from www.impots.gouv.fr .
Typical jobs qualifying for reduced TVA are: new ensuite bathroom; new fitted kitchen; converting an attic and installing dormer windows (providing you don’t raise the height of the roof); partial or full re-wiring; installing central heating; new doors, windows or shutters; wallpapering, painting and replacing flooring including fitted carpets; replacing the fosse septique (septic tank) and maintaining or improving access from the public highway. Not allowed are full rebuilds, extensions and any works which will increase the floor area by 10% or raise the roof height.
And finally, don’t forget to take lots of photographs - before, during and after the renovation – to remind you of just how much you have achieved.
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