Buying property in France: a guide for expats
Are you moving to France? Find out what you need to know before buying property in France and how to find your dream home in France.
If you found yourself staring in French windows real estate agents or online in French properties for sale, it is important to first know the quirks of the French property market.
Buying a property in France can be tempting. You tend to get a lot more for your money than in other countries. It’s easy to imagine yourself enjoying a glass of local wine on your own sunny terrace. However, making the decision to buy a house in France is a big commitment; it can be a costly mistake if you get it wrong. This guide explains how to find – and buy – the French home of your dreams.
Now is the time to buy a French property?
Real estate prices in France have performed relatively well during the global economic crisis. This is unlike some of France’s neighbors, such as Spain and the Netherlands, where house prices have fallen by more than 20% and 40% respectively.
France is one of the best performing real estate markets in Europe. It continues to attract international investors, with stable year-over-year price growth.
In fact, in the last quarter of 2017, prices rose 3.3% year-on-year, with older apartments (4.5%) in the lead. The most significant increases occurred in Paris; Second-hand goods prices rose 5.1% in the last quarter of 2017 and 8.6% year-on-year.
So far in 2018, prices have remained robust. Transaction levels actually declined slightly, with 42% of banks reporting a drop in loan applications in February 2018.
The recovery of the French real estate market since 2015 has been fueled by low mortgage rates. In February 2017, they remained very low – at just 1.61% in February 2018.
However, continued low inflation has kept the yield on real estate low around 3-4%. In 2018, however, inflation started to rise to a stable level – from 1.3% at the start of the year to 1.8% in April.
The euro is also weaker than it has been in recent years. This means that foreign buyers can get a more attractive exchange rate for their real estate investments and essentially pay less for a property than in recent years.
Should you buy or rent in France?
If you are already sure where you want to live in France, you will be better informed to look directly at properties to buy. If not, renting a property first is a good way to find out. Renting allows you to see what life (rather than vacations) is like in France. What might have been an idyllic rural getaway might have too few amenities for what you actually need. You can also find out what a place looks like at different times of the year. This hot summer spot can be a very different outlook during a cold, dark winter. This gives you a better basis for finding a property to buy. Most importantly, you’re already there when the perfect property presents itself.
Find a property in France
To find French properties for sale, you can search online, in real estate newspapers and magazines, with a real estate agent or real estate agent (a real estate agent) or even through a public auction (auction). International buyers may be able to find a real estate agent who can communicate, and later negotiate, in English. Most people go to a real estate agent at one point, the most common process. Unless you have a personal recommendation, how do you find a good one?
Look for the acronyms: FNAIM, SNPI, UNIS, or CNAB. These show that the company is owned by a registered organization, which has a financial guarantee, liability insurance and at least one staff member with a professional card, a license issued by the police Department.
As elsewhere, some industry professionals engage in unethical practices. In order to further protect buyers, the French government created the National Council for Real Estate Transaction and Management (CNTGI) in 2014, representative body for maintaining the ethics and regulation of real estate professionals and real estate activities.
When choosing a real estate agent, ask if they help prepare the sales agreement (the sales contract) and liaise with a local notary, the official who manages the legal aspect of the purchase. Even if the seller already has a notary, you can come up with your own with legal fees split between the two officials. the real estate agent can also help you configure utilities and find local services; it is useful to ask what they can offer.
After choosing a real estate agent and looking at French properties, they usually ask you to sign a visit voucher, which certifies that they have shown you certain properties.
You don’t have to go through a immovable. You can try to buy directly from the owners. Check From individual to individual www.pap.fr website which has pages in English with thousands of properties for sale and rent all over France.
Buy a property in France
Once you’ve found a French property you like, feel free to visit it a few times to make sure it checks out the requirements (in French) and if any additional work needs to be done after a purchase.
Then you can make an offer to the owners. If they accept, you must sign a contract, either a unilateral promise to sell (unilateral sale offer) or, more commonly, a sales agreement. the sales agreement is generally a buy and sell agreement, while the ‘promise‘is commonly used by real estate professionals who wish to get an’ option ‘to buy land or property that they can ask for planning consent or if there are other unknown parameters.
With the old one, the owner agrees to sell the property to the buyer at a given price and keeps the option open for a limited period (two to three months). The buyer deposits a deposit of 10% and the document must be registered with the authorities (for a fee). The buyer cannot sell to anyone else during this time, but the buyer can withdraw and lose the deposit.
With the latter, the buyer and seller agree to cement the deal at a given price, the buyer puts down a 10% deposit and in legal terms it is a final sale. If one party withdraws, the other can take legal action and claim damages. Both contracts have a seven-day cooling off period during which the buyer can opt out without penalty.
Before signing the contract
Check that all the details are correct. It should include all the details of the property (its square footage and boundaries), define exactly what is included in the sale, such as Dependencies (outbuildings), fixtures and fittings, the results of legally required reports (energy performance report, control of termites, asbestos and lead in the property, electrical and gas safety certificates), and if there are any conditions precedent (conditional clauses) or other legal information, such as hide alive (hidden defects), easements and other possible legal interests on the property, such as rentals.
Include a penalty clause. For example, requiring vacant possession of the property can result in fines if the seller – or other occupants – does not vacate the property after the sale.
You will also need to provide details on how you are going to finance the purchase. If you are planning to purchase the property through a mortgage, there should also be a condition outlining the main details of the loan and stating that the sale can only be completed after you have obtained a satisfactory mortgage. To get a mortgage at a great rate, use a mortgage broker like Private Rate, which helps expats get financing on their dream home. For more information on mortgages, see the Expatica guide to French mortgage loans.
the notary will investigate any legal, financial or other claims on the property. It usually takes about three months, but sometimes longer. Once this is in progress, a completion date (when you sign the deed of sale, or bill of sale) can be defined. In the meantime, you might want to have a structural survey done, although many locals don’t care.
If you plan to build your own house on land or substantially modify an existing building, you will need to get permission from the town hall. You will need to apply for the town planning certificate (town planning certificate), provide a building permit make your building plans and check what other taxes or fees you will need to pay.
In France, the property always passes to the children. Follow the advice of notary before proceeding to the next step – sign the deed of sale.
Fees and taxes
The costs may include the notary’s fees (which include certain costs associated with the sale). The government sets these fees and they depend on the tax bracket of the property. These are the following:
- 0 – 6,500 € – 3.945%
- € 6,500 – € 17,000 – 1.627%
- € 17,000 – € 60,000 – 1.085%
- € 60,000 + – 0.814%
In total, the sum of the costs related to the purchase of the house cannot exceed 10% of the value of the property.
You will also have to pay stamp duty when buying a house in France. Properties over five years old are billed at 5.8% (although a few are billed at 5.08%). Newer homes are charged 0.7% plus 20% VAT. Some homes are sold inclusive of tax (all taxes included) – meaning that all taxes are included.
There are two taxes on residential property: the property tax (property tax) and local taxes (housing tax). These are due on January 1 of each year, so you’ll pay a pro-rated amount. Consult our guide to French taxes.
The deed of sale
Once all checks are complete and purchase funds are in place, you are ready to proceed to the notary office to sign the deed of sale, deed of sale. You may need to take a translator with you if you don’t speak French; the document is read aloud to you before you sign it. Then you pay the various taxes and fees. Deeds in your name are registered in the land register. You will now be the new owner of real estate in France.