Buying a house. Renting a house. Taxes. Fees. Massive Confusion.

According to my financial advisor, there is pretty much no way I’m going to be able to enact my plan until I’m at retirement age of 59 ½, which is 2.5 years too long according to my current trajectory. 

EVEN THOUGH I TOLD HER THAT “IT CAN’T BE DONE” WAS NOT AN ACCEPTABLE OPTION.

She thinks I will actually run out of money. And sent me three 20 page files to prove it (I have only just peeked at them, need more time to thoroughly review). But she doesn’t know me well and I refuse to be intimidated by this somber assessment.  

If this is still what I want to do in six years, I will find a way. People who know me will believe this; it has been the pattern of my life. 

In 1986 after Chernobyl went off my mom told me I couldn’t go to Russia on an overseas program through MSU that I tested into. I was short thousands of dollars besides. The family (sans moi) was going to pursue an alcoholic intervention for my stepdad that summer. My grandparents were having some big humongous anniversary party. 

It looked impossible. I cried. I worried. My mom didn't support me emotionally. I believed. My Uncle Bill believed. I found grants. I helped a bunch of other students who didn’t have money get the same grants. I went to Russia for 6 weeks in 1989 and had an amazing adventure, Chernobyl notwithstanding (the wind was blowing the other way). 

So maybe it will be seven years. 

Maybe I will get so sick of researching all this complicated stuff I will change my mind. 

Maybe the options will be horrid and I will change my mind. 

The conundrum is being able to show “earnings” based on my retirement income. This goes for rental property too. We will extremely most likely have to rent while we are searching for a property to purchase. Long term rentals in France are one year or three year. But you can opt out in writing at any time. Rental agreements require all the same documents as mortgage agreements it seems, including previous tax return, past three months pay check stubs …

So if I retire and IMMEDIATELY rent before I start collecting my itty bitty retirement money, do you think they’ll catch on? 

It doesn’t matter how much money I have in the bank, it’s based on income. 

Oh, and it is highly recommended that you set up a French bank account, which you cannot do unless you live there. And according to one website you can’t live there until you have a French bank account. Although, I have only seen this stipulation once in all the myriads of information I’ve been exploring. Alas, and nonetheless, there are work arounds you can set up with an estate agent to show something like intention. Or get an account with a bank in the US that has offices in France (there are actually several but I don’t know if there are any branches in Michigan). 

Then there is the matter of life insurance on a mortgage, which is required in almost all circumstances. The mortgage company (that would be the French bank) can deny you this if you are too old and they think you might die before the loan is paid off. Anyway that costs around 2% of the mortgage. 

And you cannot get pre-approved for mortgages; the bank will only talk to you if you already have an offer. So … how do you know what you are approved to buy???? 

Fees and Taxes. 

MASSIVE CONFUSION AND BEFUDDLEMENT.

Whether you buy or rent you must pay the Taxe d’habitation, which is determined by region and value of property if it were being rented (so if you paid your house in cash and don’t even have a mortgage, you pay taxes on what it would be if you were going to rent it out, cool huh?) 

Then there is the Taxe fonciere, which you only pay if you own your home. Again, varies by region and home value and the charts for these taxes haven’t been updated since 1970.

“Taxe foncière is a land tax, and is paid by the owner of the property. Taxe d'habitation is a residence tax. You have to pay this tax if you own a property and live in it yourself (or have it available for your use, or rent it out on short-term lets)”

And I have absolutely no clue how much this will be, making it fairly difficult to convince my financial advisor that there really is a way (I’m sure she’s being way overly conservative). 

There is even a television tax. 

FEES:

If we purchase a mortgage the notaire fees are 10% ish of the cost of the home. 

Transaction fees are 7-10% of the purchase price.

That just added up to a lot. 

You can only borrow 33% of your income after debt. Which means after currency conversion (who knows what that will be in six years?), taxes and fees, and considering my initial tiny “retirement” income, well. 

I don’t think there will be anything left for a mortgage. 

Which means we are going to have to have a lot of cash, wait until I’m 59 ½, or rent first. 

Maybe that sentence should read, “we’re going to have to have a lot of cash AND wait until I’m 59 ½ AND rent first.”

But I promised to share something exciting about France. 

Here is Annecy. Lac d’Annecy that is.

Ahhhhh. This is the only thing that keeps me going. There is no way I would do all this work for any old country.