Long Term Renting?

[SoeurEnFrance]

Hi board! I am new here. This is not something I could do until the future....but it's never bad to start thinking and planning some years ahead of time.

Here in the USA we have the attitude that buying is always better than renting. In a market that is going up up up I guess that is true, but I'll tell ya I wish I had RENTED a place after selling my home in 2005 instead of buying up!

What about France? Is it typical to be lifetime renters, or, like here, is it considered ALWAYS better to buy if you can?

How about the difference in taxes for renters vs. buyers?

Merci

Steph

[Bevdeforges]

Hi and welcome to the forum.

One thing you'll find in France is that the housing market (along with everything else) isn't as much about wheeling and dealing as it is in the US. A house isn't considered an investment, but more like a place to live. (Novel idea, no? ) And although most families do aspire to buying a home - there are plenty who expect to inherit the family manor when Mom and Dad die - and so they just wait it out. (The inheritance laws are a real mind bender at first, but kind of make sense in lots of ways once you get used to them.)

Taxes are kind of interesting. They've only fairly recently re-implemented the tax deduction for home mortgage interest - and there are limits to how much you can deduct. Mortgage payments are legally limited to roughly 30% of your income, so no incentive to buy a big oversized home that you can't afford.

Property tax is split into two parts - one levied against the owner of the property, the other against the occupant. (If you live in a house you own, you pay both parts.)
Cheers,
Bev

[SoeurEnFrance]

So then, it's less of a, shall i say, stigma......to RENT your entire life in France?If I were to move there I could happily breathe a sigh of relief in renting forever, and never feel pressured to buy? not that i wouldn't buy, just, here you feel like you are going to be some kind of financial failure and mis out on hordes of future money if you don't buy.

do you pay ridiculously less taxes in France as a renter?

thanks!

steph

Originally Posted by Bevdeforges

Hi and welcome to the forum.

One thing you'll find in France is that the housing market (along with everything else) isn't as much about wheeling and dealing as it is in the US. A house isn't considered an investment, but more like a place to live. (Novel idea, no? ) And although most families do aspire to buying a home - there are plenty who expect to inherit the family manor when Mom and Dad die - and so they just wait it out. (The inheritance laws are a real mind bender at first, but kind of make sense in lots of ways once you get used to them.)

Taxes are kind of interesting. They've only fairly recently re-implemented the tax deduction for home mortgage interest - and there are limits to how much you can deduct. Mortgage payments are legally limited to roughly 30% of your income, so no incentive to buy a big oversized home that you can't afford.

Property tax is split into two parts - one levied against the owner of the property, the other against the occupant. (If you live in a house you own, you pay both parts.)
Cheers,
Bev

[frogblogger]

Originally Posted by SoeurEnFrance

So then, it's less of a, shall i say, stigma......to RENT your entire life in France?If I were to move there I could happily breathe a sigh of relief in renting forever, and never feel pressured to buy? not that i wouldn't buy, just, here you feel like you are going to be some kind of financial failure and mis out on hordes of future money if you don't buy.

do you pay ridiculously less taxes in France as a renter?

thanks!

steph

Hi Steph,
Loads of people rent, although the proportion of house owners/renters is growing, the rate of growth slackened off when the property market boomed (not to the extent of the US and the UK, but some substantial rises nonetheless). Over here it's harder to get a home loan, the French banks and other lenders didn't take anything the risks the UK/US markets did.

People have slightly different priorities here - mortgaging yourself to the hilt to own a fantastic home and then have next to nothing left to pay the food bills is not their way. Renting is fine, zero stigma attached.

Property prices are flat at the moment, and although not dropping too fast, no likelihood of any recovery for a while yet I reckon. Who knows when the best time to buy is though - if I did I would be a multi millionaire by now

As for rentals, depending where you are they are not so cheap. A few examples I know about - a three bed 100m2 apartment in a popular town in the Savoie Alps is about 900 euros a month, for example. A small studio apartment, 23m2 in the same town... 300 euros pcm. Out in the sticks in the Vaucluse (near Avignon in the south) the same 100m2 apartment would be 100/150 euros pcm less. A big 5 bedroomed, 3 bathrooms apartment in a farm here in the Vaucluse, with some land - rented out for 1250 euros pcm.

Then on top of that you have monthly heating/electric/water bills and taxes if it is your permanent residence (ok some rentals include all of these, but the rental rate is increased accordingly).

[SoeurEnFrance]

The only way i can think to compare it is to have an example that mirrors the US.

So take an average wage, say $4000 per month gross income, for a single mom, renting in a smaller town, not paris or anything...i am very fond of chartres, but only for gothic and romantic reasons
Lets say i rented a small house but on an acre or so...enough to grow veg and have a horse or something. Lets assume i have a car...one child...what would my take home pay be after taxes? What might my rent be? What might the water, gas, and elec be? Just average it...what am i looking at having leftover after the main bills are paid? And also, can anyone speak to how self-employment operates in france? How is that taxed?

Thanks! I work best off of seeing figures.
Steph

Originally Posted by frogblogger

Hi Steph,
Loads of people rent, although the proportion of house owners/renters is growing, the rate of growth slackened off when the property market boomed (not to the extent of the US and the UK, but some substantial rises nonetheless). Over here it's harder to get a home loan, the French banks and other lenders didn't take anything the risks the UK/US markets did.

People have slightly different priorities here - mortgaging yourself to the hilt to own a fantastic home and then have next to nothing left to pay the food bills is not their way. Renting is fine, zero stigma attached.

Property prices are flat at the moment, and although not dropping too fast, no likelihood of any recovery for a while yet I reckon. Who knows when the best time to buy is though - if I did I would be a multi millionaire by now

As for rentals, depending where you are they are not so cheap. A few examples I know about - a three bed 100m2 apartment in a popular town in the Savoie Alps is about 900 euros a month, for example. A small studio apartment, 23m2 in the same town... 300 euros pcm. Out in the sticks in the Vaucluse (near Avignon in the south) the same 100m2 apartment would be 100/150 euros pcm less. A big 5 bedroomed, 3 bathrooms apartment in a farm here in the Vaucluse, with some land - rented out for 1250 euros pcm.

Then on top of that you have monthly heating/electric/water bills and taxes if it is your permanent residence (ok some rentals include all of these, but the rental rate is increased accordingly).

[Bevdeforges]

Originally Posted by SoeurEnFrance

The only way i can think to compare it is to have an example that mirrors the US.

So take an average wage, say $4000 per month gross income, for a single mom, renting in a smaller town, not paris or anything...i am very fond of chartres, but only for gothic and romantic reasons
Lets say i rented a small house but on an acre or so...enough to grow veg and have a horse or something. Lets assume i have a car...one child...what would my take home pay be after taxes? What might my rent be? What might the water, gas, and elec be? Just average it...what am i looking at having leftover after the main bills are paid? And also, can anyone speak to how self-employment operates in france? How is that taxed?

Thanks! I work best off of seeing figures.
Steph

Actually, I live not far from Chartres, but I'm probably not the best person to ask about comparative cost of living figures. One thing is for certain - just as the banks limit the payments on a mortgage to about 30% of your pay, you'd be hard pressed to find a landlord who will rent to you if the rent is more than about 30% of your pay, so use that as a rough guesstimate of your rental boundaries.

As far as take home pay is concerned, figure 22-24% is taken out of your gross salary for cotisations (social insurances, basically). There is no income tax withheld from your salary - you settle up on that the following year. Most cotisations are deducted from your gross salary in arriving at your "taxable income" figure - which is where you start for calculating income taxes. (And just for argument sake, use 90% of "taxable income" as the figure to calculate taxes because there is a sort of standard deduction of 10% of taxable income.)

It's tough working with the scenario you suggest, as it's kind of doubtful you could find a small house on an acre of land to rent. Best you might do is a house of about 100 m2 (considered a largish house) on 1000 - 2000 m2, which would give you lots of room for a garden. People who own horses generally board them on local farms if they don't have a piece of farm property of their own. Take a look at Particulier à particulier to get some feeling for rents - IMMOBILIER DE PARTICULIER A PARTICULIER. PAP.fr Annonces immobilières d'appartements et de maisons de particuliers. Location, achat et vente en immobilier.

Self-employment raises a whole different bunch of questions. Depending on your statut (i.e. how you have yourself set up), your cotisations might be a flat percentage of your gross take (i.e. revenue) or around 40% of your net business income. It depends on the type of business you're running, the level at which your business operates (over a certain level of revenue, you are no longer eligible for the flat rate system) and a few other factors.

Not quite what you wanted, but these financial things are kind of complicated in France. The good news is that something like half the residents of France wind up paying no income tax (though they still have to file each year). The government's main source of revenue is the VAT - which adds close to 20% to the cost of most goods and services in France when compared with the US.
Cheers,
Bev

[SoeurEnFrance]

Thanks Bev! Ohhhhhhh I loved Chartres. I do love the mtns too though, but that cathedral just blew me away. i kind of half-vowed that someday i'd be a little old lady with a flat or something somewhere i could see it out my window every day. maybe i will!

so....buying pretty much anyhting, you can add 20% for VAT onto the cost? ouch!

so there is no income tax but if you had to pay it you' have to kind of have it "on you" to send in each year? ouch again!

so if i earn about 3600 gross here and end up taking home about 2500 (after tax, 200 to savings, union, this fee that fee, will it be sort of equivalent? when yo usay 30% of your pay for rent, is that gross or net? that makes a big diff!

i think i'd be afraid of coming to france and starting my own biz. i dont do the bookkeeping and managing of it that well HERE. So then, what job would i do that a French person couldn't? HA! i can't think of any! I'm basically an administrative worker. i'd need a partner if i was to do the home biz i do here, over there.

Is there any work to be had in the whole expatriate community? Are there jobs that english speakers can do for english speakers? I plan to get much better at french, but still.

steph

e

Originally Posted by Bevdeforges

Actually, I live not far from Chartres, but I'm probably not the best person to ask about comparative cost of living figures. One thing is for certain - just as the banks limit the payments on a mortgage to about 30% of your pay, you'd be hard pressed to find a landlord who will rent to you if the rent is more than about 30% of your pay, so use that as a rough guesstimate of your rental boundaries.

As far as take home pay is concerned, figure 22-24% is taken out of your gross salary for cotisations (social insurances, basically). There is no income tax withheld from your salary - you settle up on that the following year. Most cotisations are deducted from your gross salary in arriving at your "taxable income" figure - which is where you start for calculating income taxes. (And just for argument sake, use 90% of "taxable income" as the figure to calculate taxes because there is a sort of standard deduction of 10% of taxable income.)

It's tough working with the scenario you suggest, as it's kind of doubtful you could find a small house on an acre of land to rent. Best you might do is a house of about 100 m2 (considered a largish house) on 1000 - 2000 m2, which would give you lots of room for a garden. People who own horses generally board them on local farms if they don't have a piece of farm property of their own. Take a look at Particulier à particulier to get some feeling for rents - IMMOBILIER DE PARTICULIER A PARTICULIER. PAP.fr Annonces immobilières d'appartements et de maisons de particuliers. Location, achat et vente en immobilier.

Self-employment raises a whole different bunch of questions. Depending on your statut (i.e. how you have yourself set up), your cotisations might be a flat percentage of your gross take (i.e. revenue) or around 40% of your net business income. It depends on the type of business you're running, the level at which your business operates (over a certain level of revenue, you are no longer eligible for the flat rate system) and a few other factors.

Not quite what you wanted, but these financial things are kind of complicated in France. The good news is that something like half the residents of France wind up paying no income tax (though they still have to file each year). The government's main source of revenue is the VAT - which adds close to 20% to the cost of most goods and services in France when compared with the US.
Cheers,
Bev

[Bevdeforges]

The 20% boost in prices is about right - though obviously it doesn't apply to all categories of stuff. (Wine, for example, is much cheaper in France, tax or no tax.)

The issue of finding a job is the biggie for most Americans, whether or not they speak French at a usable level. We have loads of Brits through here, looking to find a job within the expat community while they learn French. There just isn't that much work available within the expat community - plus when it comes to jobs, even expats fall under the French labor laws (35 hour work week, cotisations, legal holidays, industry labor contracts, etc. etc.).

On the income tax, you file in May after the end of the tax year and you receive your assessment in August or September. Then, you make payments over the next few months - normally in at least 4 or 5 installments. Once you've been assessed once, you pay a sort of estimated tax the following year based on what your tax bill was. Those payments you can make quarterly or monthly. It's a little complicated at first - but falls into a routine once you're here and in the system.
Cheers,
Bev

[SoeurEnFrance]

Well for those of us whose french is not good enough to work in french everyday, with french paperwork, i guess it might help to have some friends in france who would help find you a job? Maybe this is where my daughter,s'sister's family could come in!

Steph

Originally Posted by Bevdeforges

The 20% boost in prices is about right - though obviously it doesn't apply to all categories of stuff. (Wine, for example, is much cheaper in France, tax or no tax.)

The issue of finding a job is the biggie for most Americans, whether or not they speak French at a usable level. We have loads of Brits through here, looking to find a job within the expat community while they learn French. There just isn't that much work available within the expat community - plus when it comes to jobs, even expats fall under the French labor laws (35 hour work week, cotisations, legal holidays, industry labor contracts, etc. etc.).

On the income tax, you file in May after the end of the tax year and you receive your assessment in August or September. Then, you make payments over the next few months - normally in at least 4 or 5 installments. Once you've been assessed once, you pay a sort of estimated tax the following year based on what your tax bill was. Those payments you can make quarterly or monthly. It's a little complicated at first - but falls into a routine once you're here and in the system.
Cheers,
Bev

[Bevdeforges]

Not trying to pry, but are you currently in touch with your daughter's sister's adoptive family? If so, have you raised the issue of them helping you find a job or otherwise get settled?

I only ask because the notion of "extended family" and particularly adoption are a bit different in France from what you might be used to in the US. If the family is willing to help you out, that's great - but don't be surprised to find them a bit hesitant under the circumstances unless you've been closely in contact for some time.
Cheers,
Bev