France Peter Mayle's account of French rural life in A Year in Provencemay have sparked a British love affair with idyllic Provencal retreats but Irish buyers stick firmly to a "bucket and spade" mentality.
John Crawley, chief executive of French property agency Oui Can Do, has found that although Irish people tend to take family holidays in countryside regions such as the Dordogne, when it comes to buying a second home, only the coast will do. And for "the coast", read "the Côte D'Azur", he says, referring to the exclusive French Riviera in the south of France.
Naturally, the property price tags reflect the fact that the Côte D'Azur is seen as a playground for Europe's rich and glamorous bon vivants.
However, there are still some relatively attainable pieds-à-terre to be found, with two-bedroom apartments starting at about €275,000 in locations such as Nice and Cannes.
In addition to holiday-home buyers enamoured with the French lifestyle, there are plenty of level-headed Irish investors whose interest in French property is purely financial. Many of these buy through a government leaseback scheme.
Under this scheme, the purchaser buys a freehold interest in the property, which is then rented out for a guaranteed return for a period of nine to 11 years.
"Leaseback is to France what Section 23 was to Ireland," Crawley explains. "It's a tax-designated property but it's specifically to encourage the development of tourist accommodation."
The best investment opportunities lie in the cities, with Bordeaux being one of the more affordable locations.
For example, by reinvesting €10,000 of their SSIA lump sum in an apartment in the new Galerie Tatry development in Bordeaux, and paying an additional €160 a month (to bridge the gap between rental return and mortgage repayments), an individual could own a property debt-free in 20 years' time, at which point it is expected to be worth €170,000.
Other prime investment locations include Toulouse, Nice and Paris. Typically, the rental yield on French properties is 4.75 per cent, net of management fees, and capital appreciation is roughly 7 per cent a year.
Purchasers are generally advised to take their mortgage out in France so that the debt is not secured on their Irish property. "Don't put your Irish family home at more risk than you need to," says Crawley. "Borrow locally if you can."
Barry O'Donnell of Foreign Tax Returns, a firm which specialises in tax compliance for individuals who own investment properties overseas, says many Irish investors hold their French properties through a company structure known as a Société Civile Immobilière (SCI). This enables them to pass on the property to their children in a tax efficient manner.
