Reasons to Retire in France, Reasons Not to Retire in France and Talk About Tax

FIVE REASONS TO RETIRE IN FRANCE AND FIVE REASONS WHY NOT

Dinner in Nice with retiree friends

I was at dinner Wednesday night with a group of American retirees who have moved to the southern city of Nice with our help — both renters and purchasers of property. Bubbling over with the excitement and discovery of their new life in the Riviera town, they expounded on the adventures as well as the trials and tribulations of overcoming the cultural clashes.

One such gentleman subsequently sent me a recent article by International Living, a publication for which I used to work, titled “5 Reasons Why You Should Retire in France” written by Stewart Richmond. Those 5 reasons were:

1. Low cost of living
2. Cheap real estate
3. Cheap and Easy Travel and Connectivity
4. Healthcare
5. You Can Drink Water Straight from the Tap

Stewart expands on each of these ideas, but in essence, he took the words right out of my mouth. These are the same reasons (except for perhaps #5, You Can Drink Water Straight from the Tap) that I talk about with people thinking of moving to France and are afraid they don’t have enough money to make their dream come true…but are wrong!

International Living also published a similar article titled “5 Reasons Why Retiring to France Could be the Biggest Mistake You Ever Make” —  (by Barbara Diggs (March 31, 2017) — but don’t take the title the wrong way. It’s a spoof on the word “mistake” that starts like this:

1. You’ll Have Trouble Deciding Where to Go on Vacation

One of the huge disadvantages of living in France is that you are within close proximity to countless intriguing towns, regions, and countries. It is such a nuisance trying to figure out where to visit next. Ha! That is definitely a BIG problem, don’t you think?

If you want to learn more about why France is a great place to retire (or not), book a consultation with me to find out.

TRANSITION TAX OR REPATRIATION TAX — CONFUSING THE INNOCENT!

In last Wednesday’s Parler Paris “Repatriate Renounce or Pay Up?,” I announced a Webinar hosted by Monte Silver, titled “Repatriation tax filing deadline, what to do?” Perhaps you participated? I certainly did! This kind of information is essential to anyone in business outside of the U.S. or even thinking about it.

Monte Silver has made the presentation available in the form of a pdf and has generously allowed us to provide it to you. See the pdf attached here.

The ACA (Americans Citizens Abroad) also sent out their own missive, calling the Repatriation Tax, a “Transition Tax.” That threw me for a loop, but Monte and Carl Mir, a U.S. tax preparer working from Brussels, confirmed that “Yes it is the same,” but he joked that “It has different names to confuse the innocent!!!”   

The ACA submitted, and I quote: “comments to the recent proposed regulations issued by the U.S. Department of Treasury on August 9, 2018. These regulations, appearing as 62 pages in the Federal Register, spell out in detail the Treasury’s view of the workings of the new Transition Tax, enacted as part of the recent Tax Cuts and Jobs Act. ACA is requesting that the Treasury Department provide a de minimis rule,* which removes from the requirements of Section 965, sometimes referred to as “Transition Tax” or “Repatriation Tax,” all small taxpayers living abroad. See their letter to the IRS here. 

*FYI, since I didn’t know what this is, I found a definition on Investopedia.com: 

The De Minimis tax rule states a price threshold to determine whether a discount bond should be taxed as capital gain or ordinary income. It states that if a discount is less than a quarter point per full year between the time of acquisition and maturity, then it is too small to be considered a market discount for tax purposes. Instead, the accretion from the purchase price to the par value should be treated as a capital gain, if held for greater than one year. De minimis is a Latin expression for “about minimal things.”

The U.S. Treasury has received a slew of letters from organizations and individuals, complaining about the serious consequences of the tax to small American business owners overseas. And while they’ve acknowledged the problems, too, they offer no solution or relief. Let’s face it, no American creates a business in France to AVOID taxation, since France is such a highly taxed country, and to add additional costs to what is already difficult profitability could be death to these organizations. I urge you all to do what you can to battle the unfairness of the tax. You can read more of the ACA’s email here.

Photo of Roman Abramovich by Marina Lystseva — commons.wikimedia.org

On the subject of unfair tax, Russian billionaire, Roman Abramovich, is fighting the French property tax bill posed on him of €1.2 million, claiming that he had undervalued his holiday home on the Cap d’Antibes peninsula (known as “Billionaire’s Bay”) and didn’t pay enough wealth tax in 2006 and 2007. The property, the Chateau de la Croë, is an exceptional 2000 square meter castle built in 1927 in the Victorian style purchased by Abramovich in 2004. Some of the illustrious residents have included King Edward VIII, King Leopold III of Belgium, the last Queen of Italy and Farouk I of Egypt, not to mention Aristotle Onassis and his lifelong rival, Stavros Niarchos. Following a fire in the 1970s, the property was abandoned for decades until Abramovich purchased it. The tax authorities valued it at about €41,000 per square meter by comparing it to other similar properties in the area.

How many “similar” properties can there be!? The current owner’s complaint is that the “comparables” are homes in much more expensive locations, but the courts ruled the assessment to be correct comparing it to other properties sold in and around Saint-Jean-Cap-Ferrat, Cap d’Ail, and Antibes. Those include the Villa Fiorentina, a property once occupied by the Kennedy family, Elizabeth Taylor and Greta Garbo. The Chateau de la Croë is more than 75,000 square meters (807,000 square ft)!

Here’s a Flying Eye video of the Castle for your viewing pleasure.

A bientôt,

Adrian Leeds
Adrian Leeds Group

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P.S. We may not have multimillion euro properties to offer, but we do have stellar luxury apartments on our for sale roster. Please see the adds at the top and bottom of today’s newsletter for just two of them. Then contact us!