How Will the Brexit Vote Affect My Property Purchase in France?

Background

The UK voted on June 24 to leave the EU. The process begins with the UK notification to the European Council under Article 50 of the Lisbon Treaty. Once such notification has been made, a period of two years is allowed for the detailed negotiations to take place. During that time, nothing will change in terms of the entitlements of UK citizens in Europe.
Read more about the Lisbon Treaty

UK Law:
A case is being brought by Mishkon de Reya (a senior law firm) on behalf of un-named clients which asserts that the UK Prime Minister is constitutionally not permitted to notify the European Council under Article 50 until the referendum result has been approved by the UK Parliament. It remains to be seen whether this case will succeed, and if it does, how Parliament will vote. 75% of MPs declared themselves in the “Remain” camp.

Assuming that the UK does declare its intention to the European Council, what are the possible outcomes?

• The UK remains in the EEA by dint not of being in the EU, but by joining EFTA (which it left in 1973 after joining the Common Market). The current members of EFTA are Iceland, Liechtenstein, Norway and Switzerland. The EEA subscribes to the same “Free movement of capital, people and labour” that EU countries follow.
• The UK negotiates a wide range of bilateral treaties with EU member states to preserve trade relations.

We believe that the first outcome will prevail in some form.
In any event, there are so many French (and other European) nationals living in the UK, that it seems unlikely in the extreme that the EU will unilaterally impose restrictions on the rights and entitlements of British citizens living in France (or elsewhere in the EU). A compromise will be found.

Buying a Property in France
Things are rather fluid at the moment as the political dust settles but in the end, we see no reason for the purchase and ownership of a house in France to be any different from how it is now.
Membership of the EEA will confer the same rights on British citizens living in France as they are under the EU – including healthcare and pensions.

Brief FAQ:

What about the exchange rate? It has dropped from around 1.30 to around 1.20 since the Brexit outcome.

It has dropped from around 1.30 to around 1.17 since the Brexit outcome. But here is a different perspective: With the recent exchange rate change, to recover the extra Euro purchase cost over a 15 year ownership cycle, a property bought now - at what is believed to be a low in the market - would only need to appreciate by ⅔ of 1% per year to recover the extra cost.

What about finance?

French mortgages on French properties are still readily available. Indeed, rates have come down since the Brexit vote. And mortgages do not have to be repayment only; there are other options including hybrid models – part repayment, part interest-only. Ask us if you have any questions.

What about tax?

Taxes related to the purchase, ownership and sale of properties in France have not changed. We see no reason for the to change in response to Brexit. After all, many non-Europeans, including Americans, Australians and people living in the Middle East, buy and own properties in France.

Will life in France change?

If you were to judge that by the response of the French people we know and meet daily, you would see what might be characterised as “disappointed astonishment” in the UK vote and by an outpouring of support for the Brits who already live in France. France will retain its many attractive qualities, as it has done for centuries for Brits. Notably, many of our clients are more determined to come and own a property in France after the Brexit vote than they were before.