Filed under : For Buyers

Democrats Abroad work to stop FATCA blowback on US expats

Since coming into law in July 2014, the Foreign Account Tax Compliance Act has caused banks around the world to close accounts for their American clients.
Despite this major hurdle, France Home Finance is able to obtain French mortgages and French bank accounts for Americans in France.

From the Democrats Abroad post December 14, 2015:

FATCA requires foreign financial institutions to report the financial accounts of US citizens to the IRS annually. Foreign financial institutions which fail to meet their FATC filing obligations face a penalty of 30 percent withholding on US source income. A penalty of this nature could jeopardize the viability of all business foreign financial institutions conduct with US-based counterparts. No financial institution that does business with US counterparts can afford to ignore the risk of getting their FATCA compliance wrong when the penalty is this high. Thus we are seeing some banks across the world refusing to handle any accounts for US citizens.

Democrats Abroad has updates on three fronts:

1) Generating Senate support for the “Same Country Safe Harbor” - DA worked through the summer to generate signatures from the House of Representatives on a letter to the US Treasury and IRS urging them implement the Same Country Safe Harbor solution. They are now working on generating enough signatures from the Senate.

2) FATCA Lawsuit - after the loss in federal court on Crawford et al v United States, challenging the constitutionality of FATCA, prospects look slim to keep the case alive.

3) The Worldwide program for the exchange of financial account information starts January 1, 2016 - FATCA was the model and inspiration for the Organisation for Economic Cooperation and Development (OECD) to create a worldwide program of financial account transparency and disclosure. It is known as the Common Reporting Standards (CRS) and over 90 countries have signed up to report the financial accounts of non-national account holders to the tax authority in the account holder’s country of tax residence. CRS differs from FATCA in some important ways, most especially in relation to the severity of penalties for compliance failure.

Read the full article HERE

Paris Real Estate Outlook 2015

Now more than ever is the time to invest in Parisian real estate! We are in the midst of the perfect storm of a weak euro, low French interest rates and stable yet undervalued property prices (for the moment.)

From its low point last year to now, the dollar has strengthened by at least 23% against the euro. The last time the dollar traded this high against the euro was in 2003.
Euro to US Dollar rates in April 2014 went from 1.38 to today’s 1.08 and many analysts are predicting it’s on the way to a 1 for 1 exchange.
The Euro to British Pounds rate went from .82 to .73, also a major swing in favour of pound sterling buyers.

Twenty year fixed rate French mortgages went from 4.20% annually last year to 2.55% - an enormous drop.

While the 2014 French Notaire’s Parisian real estate price report stated an overall drop in price of 2.1%, we didn’t see much reduction in price for the typical apartments that our clients tend to select (well located, lots of light, logical layout, etc.) for the smaller studio and one bedroom apartments. However we did see lots of price negotiation in the larger apartments. The last few weeks have seen a change due to the weak euro and low interest rates. Now even the larger apartments are selling much faster and more often at selling price. All this said, we strongly feel that Paris apartments remain undervalued compared to New York and London. We predict that there will be a price increase to come in the months ahead.

Contact us today with your project and learn how to take advantage of these unusually favorable market conditions!

Oct 2014 - Breaking News on Euro to US$ and UK£ Currency Exchange

Save Money, Plan Ahead - foreign currency exchange expert at Moneycorp, Carole Jaskarzec, sees the Dollar strengthening significantly.

October, 2014

We have revised our 12 month EUR to USD forecasts substantially lower to 1.10 in 12 months (the lowest forecast amongst 91 contributors in the Bloomberg Composite).

If you are a non Eurozone client (ex. US or UK) buying a property in France, your purchasing power is increasing and your down payment is worth more - either allowing you to decrease your loan to value or increase your overall budget.

• We expect the upcoming divergence in euro area and US growth/monetary stances to be unprecedented.
• Euro monetary & fiscal stimuli have proven insufficient to stimulate growth or inflation.
• Tensions with Russia has further affected euro zone activity.
• ECB needs to increase monetary stimulus – include substantial sovereign bond purchases.
• We anticipate tje US Federal Reserve to raise rates in June 2015, with risks tilted towards March. The Fed may even be forced to hike faster than markets are pricing.

Our revised EUR to USD forecasts add upward pressure on all our global USD FX views…


• We have revised our forecast lower, now 1.5700 in 12 months.
• GBP should trade more in line with positive fundamentals now event risk of Scottish Referendum is out the way.
• Signs that UK expansion was broadening as a result of investment and net exports – the significant deterioration in the euro economic outlook has turned that to a downside risk.
• We expect monetary policy to remain in focus and the prospects for earlier rate rises.
• We believe the first BoE rate hike to be in November – 25bp per quarter in the year following. The market is currently only pricing in 80% chance of a hike at the Feb meeting. As markets adjust to our view we expect GBP to benefit (mostly vs EUR).

• GBP should appreciate significantly versus the EUR as the Bank of England  moves towards tightening and the UK economy continues to outperform.
• For reasons mentioned above we foresee significant downside in EUR– now looking for GBP to EUR to reach 1.3500 in 6 months.

Revised Forecasts
                    1 m   3 m  6 m  1 y
GBP USD 1.63 1.61 1.58 1.57
GBP EUR 1.28 1.31 1.35 1.43
EUR USD 1.27 1.22 1.17 1.10

Why is it so useful?

If you are a non Eurozone client (ex. US or UK) buying a property in France, your purchasing power is increasing and your down payment is worth more - either allowing you to decrease your loan to value or increase your overall budget.

Remember that in certain situations, a mortgage can be a useful to hedge against currency exchange and allow you to choose the moment to convert currencies.

Contact us Today Save Money on Currency Exchange

France Home Finance will ensure you receive expert advice on rate and timing and most importantly save you money on the margin charged on your transfer. We are almost always able to beat what your bank will charge you!

Inheritance law in France : Major change for you in 2015

Starting August 17th, 2015, only one law will apply for all your assets, whether movable or immovable, personal or real property : the law of your country of residence.

This article offers a quick view on how it will change our habits in estate planning for foreigners living in France or owning real estate in France.

By Pierre-Alain CONIL, Bilingual French Notaire,  LL.M. Boston College Law School, PhD student and notary graduate at MOREL d’ARLEUX, HUREL, BILLECOCQ, notary law firm in Paris 6th, 15, rue des Saints Pères.

Current situation : the French réserve héréditaire

Foreigners living in France or owning a property in France learn often very early that the French quality lifestyle has a downside : being submitted to the French inheritance Law and its forced heirship system.

Basically, that means that part or all of your estate will be devolved to your heirs according to French standards. To synthesise:
- if you haven’t drafted a will : your estate goes to your closest relatives, most often your wife for a life interest and your children for the remainder.
- If you have drafted a will : it will be enforced only if you do not disinherit your children and leave them at least their forced share of your estate (1/2, 1/3, 1/4, depending on how many children you have).

To put it in another way, your estate plan that uses either a will or a trust (legal instrument that is not recognized in France by the way) to transfer everything to your spouse, leaving the children to wait for his/her death, will be seen as unlawful and will not be respected.

I know for a fact how difficult this is to accept for my foreign clients.

But I have great news for you : this is about to change.

A new European regulation starting August 2015
A new European regulation about inheritance law has been passed by the European Parliament in July 4th 2012 in order to change those rules and will start producing its effect in France on August 17th, 2015.

What will it change for foreigners? In one word : everything.

One law to govern them all

Up until August 2015, one’s estate is actually divided between movable property, devolved according to the law of the decedent’s county of residence, and immovable property, subject to the law of the country where the property is located, which often leads to applying two or more inheritance laws.

But this is about to end : starting August 17th, 2015, only one law will apply for all your assets, whether movable or immovable, personal or real property : the law of your country of residence.

Needless to say, using a sole and unique law will greatly simplify how international estates are handled.

Choosing the law applicable to your estate
Another interesting change is brought by this new regulation: not only will you have only one law applicable to your estate, but you will also be able to pick it up.

Thus, if the law that is meant to apply, ie the law of your country of residence, doesn’t please you, you will be free to replace it by the law of your country of citizenship.

Therefore, if you live in France but would rather have your properties transmitted to your heirs according to you own national inheritance law, that’s now pretty easy to do : you just have to draft a will saying so.

And if you own or buy a property in France while still living in another country and want this law to apply instead of the French one, there is no need anymore to use a civil corporation (SCI Société Civile Immobilière) to transform an immovable property into movable assets (the shares of the corporation) : all you need to do is…actually nothing. The law of you country of residence will anyway be used to govern the distribution of your French property.

New estate planning solutions

To summarize, this new regulation changes everything we know about international estate planning in France. Old habits are about to be outmoded and new techniques will favourably replace them.
Isn’t it a good time to consult your notaire for advice ?

France Home Finance on TV

France Home Finance and their clients have participated in a number of television shows about French property and real estate in Paris.

Here are two of our shows that capture the excitement of the search and the anguish of decision making (which we personally understand!) when seeking your perfect home in France:

Seeking a Pied a Terre and Investment Property in the Heart of Paris - HGTV House Hunter's International Episode HHINT-3607H

Ashley Maddox spends her time working between the US and Paris and decided that a long-term stay in a cramped hotel room wouldn't do. An architecture buff with an entrepreneurial spirit, Ashley decided to purchase an apartment that could serve as both a pied a terre and an investment property. But Paris is one of the world's most expensive cities, and with property prices rising more than 20% in recent years, finding the centrally located two-bedroom flat Ashley has her heart set on may be an impossible task. Along with her friend and advisor, Tahminae from France Home Finance, Ashley weighs space versus location, and vacillates between a renovation project that will allow her the freedom to make her own mark and the convenience of a ready-to-rent flat. Watch what happens when House Hunters International touches down in the City of Light.

Parisian Brokers Turned Buyers Move to Provence HGTV House Hunter's International Episode HHINT-4913H

Parisian real estate pros Tahminae and Martin from France Home Finance are five months pregnant and about to experience the market from the other side. They want a second home for their family in the peaceful region of Provence, but finding the perfect stone house in one of the most expensive areas in the world won't be easy with their small budget. In fact, real estate agent Jacques Leroy knows it's impossible but these brokers won't settle until every stone has been turned. Watch House Hunters International for the pursuit for perfection in Provence, France.



» December, 2015: Democrats work to stop FATCA blowback

» November, 2015: Buying a Piece of France - Tax and Legal Need to Know, November 2015

» April, 2015: Paris Real Estate Outlook 2015

» October, 2014: Breaking News on Euro USD

» October, 2014: Inheritance law in France : Major change for you in 2015

» March, 2014: France Home Finance on TV

» February, 2014: French Property Tax Update 2014

» February, 2014: French Housing Market 2014

» April, 2011: France’s Economy is Looking Up

» April, 2011: Exchange Rate Forecast

» April, 2011: Outlook for European Inflation

» April, 2011: Why France is still Drawing Expats

» March, 2011: Euro Exchange Rate Outlook

» March, 2011: France World Tourism Leader

» March, 2011: Update on French Mortgages

» March, 2011: Rising French Property Values

» February, 2011: Role of the Notaire

» February, 2011: European Economic Outlook for 2011

» February, 2011: Key French Tax Deadlines for 2011

» January, 2011: The Complete Mortgage Process

» November, 2010: French Property Taxes

» November, 2010: The Benefits of Hiring a Mortgage Broker

» October, 2010: Qualifying for a French Mortgage

» September, 2010: Primary Costs Involved With a French Mortgage

» September, 2010: Fixed or Variable Mortgage Rate?

» August, 2010: French Leasebacks

» August, 2010: Compulsory French Life Insurance

» July, 2010: Commercial Real Estate Sector Must Meet Sustainable Criteria

» July, 2010: Major Decrease in U.S. Property Sales

» June, 2010: Global Real Estate Recovery

» June, 2010: Second Homes for Wealthy French Real Estate Investors

» May, 2010: Increase in Confidence of French Real Estate Market

» December, 2009: Key French tax deadlines for 2010

» October, 2009: France - the most visited country in the world in 2008

» August, 2009: Visit France Home Finance in our new location