Philippe Port, Director of SCANDIC CHALETS (Font-Romeu, located in the South of France near the border with Spain, in the province of Pyrénées-Orientales; real estate; CA: 1 474 600 €), told all-andorra.com about taxes on property and other payments in France, as well as the advantages of investing in wooden houses constructions:
“In France there are two types of household tax (house or apartment): property tax (paid only by the owner) and accommodation tax (paid by the owner and the tenant). For a family with an average income, both tax rates are about the same, but can differ depending on the region of France. For example, in Font-Romeu for a house of 100 sq. m you have to pay about 1400 euros per year for each type of tax.
For comparison: in neighboring Andorra there is no property tax. The only costs are the payments to local governments (Comus), which would be a maximum of 100 euro per year for a cottage measuring 500 sq. m. In neighboring Spain, the tax on such property is about 2 thousand euros per year, depending on the region.
It is a quite simple to get planning permission in France, depending on the regulations applied in the region (approval duration is about two months). In Font-Romeu, for example (about 80 km from Andorra), there are two zones for development controlled by the architectural bureau – each project must obtain a resolution from the architect (this can take up to a maximum of four months).
It is impossible to obtain permission to build a house near the ski resort, as the area for construction is limited: the house can only be built in residential neighborhoods. In Andorra the situation is similar – building permits are issued only for residential areas.
I could mention a few of the advantages of constructing in Font-Romeu from the point of view of investment: the property is well leased and well sold. The city is located near the main highway. A funicular connecting the city to the ski station is near the tourist office, where there is also a trail for downhill biking in the summer time.
The city is located near Toulouse (200 km), Montpellier (250 km), Perpignan (90km), Barcelona (180 km) – all these cities have an airport – and close to Andorra (one hour drive). The Mediterranean coast is located 100 km from the city.
I could mention many advantages of investing in the construction of wooden houses: the primary one being the quality of the air we breathe inside our homes. Wood is a material which allows air to regenerate, as it is microporous and not hermetic. Wooden houses are aesthetically more attractive (though it’s a matter of taste). The pace of construction is also faster. However, it should not be forgotten that a wooden house requires more maintenance than a stone one.
In Andorra there are practically no wooden houses – I think it’s because of the tradition to build stone houses. Wooden houses are more common in the forest area than in the mountains.
The construction of a wooden house for an individual buyer is possible, depending on the budget as well as logic in terms of matching the specifics of the built-up area. During the construction of wooden houses there are certain limitations that the developer is obliged to warn the customer in order to choose the optimal variant.
As for the cost of wooden houses, in Font-Romeu the cost is an average of 2000,00 euro per sq m (excluding the cost of land). Here is an example: a house with a first floor made of stone with an area of 80 sq. m and second floor of wood with the same area will cost around 320 000/340 000 euros, depending on materials. Annual price increase is from 2 to 4 %, and there is every reason to believe that they will keep on growing. Every year the number of clients wishing to build houses in the Font-Romeu is growing. Average budgets for construction are between 400 000 and 800 000 Euro.
Regarding a rental housing, I would say that a cottage for 8-12 people costs about 3 000 – 5 000 euros per week during the Christmas holidays and the first week of the new year. A weeks rent of the same chalet in February will cost 2 000 – 4 000 euro.
The property owner may re-sell their home on their own. It is legal and does not require any additional expenses. But it is obvious that selling through a reliable agency is more effective.
Property loan is not a problem. The first payment is between 30% and 40% of a home’s value. Monthly mortgage payments should not exceed 30% of the total family income. The bank will verify the transaction with a notary to insure it in case of failure to pay by a creditor.
And, finally, I can give you some information about payments for utilities. An average house, 160 sqm (two floors on 80 sq m) for a four person family will cost the following amount: 500 euros per year – water, 2 000 euros per year – electricity (in case of electric heating). Plus the cost of insurance (about 400 euros per year). Add taxes – about 2 500 – 3 000 Euro per year. As a result, 5 000 – 6 000 euros has to be paid per year.