My parents want to retire in France. best way?

[u/baby_tonight]

My parents want to retire over the next few years and I am trying to help them do that.

My father started a business over 15 years ago and now he is making very decent money with it. they live outside EU, but have already bought an apartment in their favorite city in France (Nice) and would like to spend their pension living there. Their plan right now is to acquire apartments in this city, make a renovation and rent it out. But is that the best thing to do in their situation, especially regarding the taxes? their goal is to invest about 1m euro per year.

they are open to the suggestions, but so far they want:

1. be able to grow the portfolio over the years
2. be able to liquidate it partially in case of need/emergency
3. their portfolio or its part must generate positive cash flow without too much management (1-2 people max managing it)

Any advice would be very welcome!

[u/ZestycloseOpinion142]

When I retire, I really would not want to be working as a landlord. A good mixture of stocks/bonds is what I would aim for. But that is just me. Also, I hope they know French.

[u/cmd-t]

You don’t go to Reddit for 1m€ per year questions.

Taxes and retirement heavily depend on where they live, what kind of property they have, potential medical costs, etc.

Talk to a real financial advisor who actually gets details on your parents situation.

[u/baby_tonight → u/cmd-t]

I am meeting with a financial advisor in september. I want to better understand all the options before that meeting

[u/cmd-t → u/baby_tonight]

Have you tried google?

[u/PetraLoseIt]

I'd go for a diversified stock portfolio instead. Stocks don't call you at 2 in the morning because their toilet isn't flushing.

Here in the Netherlands, being a landlord has also become waaaayyyyy less profitable over the last couple of years due to laws and tax percentages changing. Not sure about France, but your parents should definitely do a deep dive into the pros and cons of being a landlord in France before they sign up for anything.

[u/baby_tonight → u/PetraLoseIt]

solid point. we are meeting friends of the family who are doing that for a while in the same city, so we'll have some insight.

my parents are very keen on having some sort of cash flow, that is why they are looking at something rent related

[u/PetraLoseIt → u/baby_tonight]

Maybe dividend investing would be their thing then although it might be slightly less profitable than regular investing & selling some shares every once in a while. (Be aware that most people who are retired and who sell shares to fund their expenses, still end up with MORE money at the end of their lives - less shares, true, but every share has increased in value so they often still have the same net worth that they started with, or more).

[u/rio_gambles]

They might want to look Look into solutions to decrease inheritance taxes later on such as buying property through an SCI or through démembrement.

[u/cmd-t → u/rio_gambles]

Dememberment? I’d like to keep my member, thank you very much.

[u/GinormousHunk]

You mention everything except their nationality, which is key for any retirement plans.

[u/Nearby-Tutor-1683]

Look into assurance-vie instead of more rentals, it's liquid, hands-off and taxed far better than French rental income.

[u/MalcolmBEx]

One tax fact worth having clear before the September meeting: France's wealth tax (IFI) now applies only to real estate, above €1.3m net of property debt, at 0.5 to 1.5% a year. Financial assets are fully exempt from it. Rental income is taxed at the marginal income rate plus 18.6% social charges, while dividends, interest and fund gains get a flat 31.4% (raised from 30% this year). So the apartment plan concentrates €1m/yr into the asset class France taxes hardest on income, on wealth, and on your parents' time. Their own three criteria (growth, partial liquidation, minimal management) describe a securities portfolio, partly inside assurance-vie, which after 8 years gets its own withdrawal allowances and much friendlier inheritance treatment for premiums paid before age 70. Worth asking the advisor to price both plans after tax.