Are there any other costs on top of the advertised price of the farm?
Yes. We always include our own fees in the price but stamp duty, land registry fees and departmental and communal transfer duty (droits de mutation) amount to c 5.8%. Notaire's fees are normally 1% + VAT. (Stamp duty is not payable on properties owned by a VAT registered company but if this is the case VAT would be payable but is then reclaimable if the purchaser registers for VAT).
Can I roll over my capital gain from the UK?
We have had a number of clients who have done this following the sale of land or agricultural buildings. The same may not be true for sale of unrelated assets such as shares or second homes. In these cases the individual circumstances of the purchaser would need to be assessed to establish eligibility.
Is the form of legal ownership of the farm or property important?
Yes, this and the business structure is vital to get right and has very significant financial and other implications. This is perhaps one of the most valuable areas in which we are able to advise. Individuals, families, companies or investors can choose to set up as sole traders, or to make use of various forms of property holding company, farming companies or partnerships all of which have an impact on the taxation/social charge base of the farm as a property and a business. Family composition, source of funds and gearing, length of potential career, status as resident or otherwise, succession/inheritance considerations and type of farming to be carried out are all factors to be taken into account in the choice of legal structure.
Do I need a farming qualification to farm in France?
If you are applying for specific state aid (over and above normal CAP subsidies) for instance to benefit from the aid awarded to young farmers then yes. Otherwise no qualification is required but an application for the right to farm by those who don't have an agricultural qualification or are not able to prove 5 years professional experience over the past 15 years. The right to farm is usually granted unless there are two or more candidates in which case the more qualified will be given the authorisation.
How do I know what is included in the price of the property shown on the website?
We indicate a price for the land, buildings and house only. We will supply an inventory of the livestock, deadstock and machinery available with the farm on request. Clearly the farm requires a certain amount of stock and equipment in order to run it and this can be bought either on or off the farm. We are happy to advise on capital requirements for any given property.
Please could you indicate the scale of fees applicable to farm sales?
Sales of value exceeding €1,500,000: 4% + VAT
From €500,000 to €1,500,000: 5% + VAT
From €250,000 to €500,000: 6% + VAT
Sales to a value of €250,000: 7% + VAT
Tenancy negotiations: One years rental payment (minimum €2,000 + VAT)
These charges have been fixed as a function of fees charged by other operators in the same market and the workload involved in the transaction of a property.
The scale of charges may be varied at the discretion of the agent after consultation with the client.
I have heard of a 40% tax rate in France. Is this true?
The system of tax in France is too large a subject to go into any detail with here but yes there is a tax of c 40% that equates to National Insurance and is calculated on the net profit of the business. There are many ways to mitigate this - some are schemes provided by the government, others are ways that generate cost for the business without the equivalent cash outgoing for its owner – for example depreciation, self paid rentals etc. We advise on the most tax efficient way to purchase, set up and run the farm/property.
How long does the purchase process take?
This can vary widely depending on your circumstances and the length of your search but is likely to take at least 5 months because the right to farm application takes 4 months to process.
I understand that France offers significant assistance to Young Farmers. Is this correct?
Yes it is and results in about 60% of farmers in France being aged under 55 and 40% aged over 55. In The UK this statistic is almost exactly reversed with about 58% aged over 55 and 42% aged under 55. A YF endowment of c. €20,000 is awarded subject to certain qualifying conditions. It can be more than this in Less Favoured Areas. Young farmers also benefit, for example, from a 50% reduction in social charges for 5 years along with a 50% reduction of income tax and reduced rates of insurance.