Med In Heaven
Buying a property in Nice
Nice, capital of the French Riviera is home to some of the best investments in France.Property prices have increased by an average of 14.4% per year over the last four years,and a number of large infrastructural projects under construction are likely to drive prices further up. Though growth has slowed in 2008, due to the strict French lending laws we do not see a sub-prime crisis here so have not seen growth come toa halt like some other European countries.A strong, year round rental market and the opportunity to use the investment as a holiday home will continue to attract foreign buyers for the foreseeable future.
The potential for strong capital appreciation is significant. The local government has 10 major projects under construction (“les grands projets”) that will transform the city. These projects include the creation of a new student district, the upgrading of the major Nice bypass route and the turning of the port into a luxury marina. The TGV is also being extended from Paris to Nice, due 2015, meaning journey time will be cut from just under 6 hours to 3h40 minutes.
The Nice tramway has begun to rejuvenate the whole city, and will have a positive impact on property prices. In Bordeaux, a city which completed its tramway project in 2003, property prices rose by a staggering 40% over the following two years. In Dublin,a report into the effect on the LUAS tram project found that in the two year period since its completion, the value of property situated within walking distance of a tram-stop grew by an average of 17% more than the average growth in the rest of the city over the same period. Owners are already benefiting from the new tramway with its extensive pedestrianisation and the corresponding reduction in noise and pollution.
Apart from the obvious capital appreciation, France has one of the best regulated property markets in the world,giving unsurpassed security of capital. Buyers are well protected with laws such as the one week ‘reflection period’after you have an offer accepted to buy a property. During this week, you can cancel the offer without any penalty. Planning permission in France, unlike most countries, is very strict. Add to that the extremely limited supply of development land on the Riviera and you can be assured that your investment in Nice is both safe and secure.
Nice has a strong rental market, with a particularly strong demand in the summer. Long-term letting is a popular option during the winter months, with students, expatriates and locals as the main tenants. Average rents in Nice are the second highest in France, after the greater Paris region. Most Med In Heaven buyers decide to rent out their apartments to tourists on a weekly basis. The yield on a weekly rent is roughly equivalent to one months rent on a long term lease. This option appeals in particular to buyers who wish to also use the apartment several weeks throughout the year. Apartments in Nice, depending on location and condition, can be rented at peak rates for as much as 35 weeks per year, reflecting the city’s prominence as year-round tourist destination. Med In Heaven work alongside a top-quality property manager, who can advise you on the best strategies to maximise your investment.
Long-term rental contracts are heavily regulated and are of 3, 6 or 9 year duration. Guaranteed rental income can be offered for long-term contracts. This will guarantee to the buyer a fixed monthly income over the duration of the rental contract.With the guaranteed rental income, no personal usage can be offered to buyers.
Finance and Tax
For finance, French mortgages are cheaper than Irish/British mortgages and are freely available to foreign buyers. There are, however, some specific terms, such as maximum loan repayments not exceeding one-third of your monthly gross income, and up to 85% of the property price financed. Many buyers decide to finance their investment from institutions in their home country to capitalise on the value of their home there. Whatever option you choose, Med In Heaven can put you in touch with our mortgage partners in Ireland, the UK or France to secure your investment.
After a few years, if you decide to sell your property, you will benefit from the lower rate of 16% Capital gains tax, instead of the 24% for French residents and 33% for non-EU nationals. You will be able to ‘write off’ notaire’s fees and any renovations that you might have undertaken. Med In Heaven will also be able to assist you in dealing with French Succession Law, including converting it to English/Irish-style inheritance law.