1. Letting Property in France - Introduction

Renting out residential property is an important activity for many international owners of French property.

Traditionally, the main approach has been to let out furnished accommodation on a seasonal basis to the holiday market.

However, in recent years this market has seen a large increase in supply, and the level of demand has gone down, due in no small measure to the sheer number of people who now have second homes in France!

Inevitably, vacancy levels have increased and investment returns have declined. It is not currently the 'easy money' option for investors that it was several years ago.

The regular long term market is one that frightens many owners, either because they do not speak French, or because of the laws on security of tenure, which are heavily biased in favour of the tenant.

Nevertheless, letting of property is a one of the most fiscally attractive income streams you can have in France, as the tax breaks are not ungenerous, and small landlords are not liable to self-employed social security contributions.

Accordingly, we devote most of these pages to a description of the law and practice in the long term letting market, because we know it is a topic that interests many of our readers, and we do not think it is generally well-understood.

You will need to do your own market research but, in many areas of France, rental levels have risen quite sharply in recent years and there is a shortage of suitable accommodation.

So letting out property in France may not be all glum news!

In this guide we do not review French 'leaseback' schemes.

These are generally 'off plan' properties in holiday destinations, leased back to a property management company for at least 20 years.

Neither do we consider special buy-to-let properties under tax saving schemes called Borloo and Robien or Scellier.

We shall consider these investment schemes separately in due course.

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