Posted on 09 September 2024
Buying property in France as a foreigner attracts many who dream of home ownership overseas. For decades, British nationals, Americans and other foreigners have flocked to purchase residential property for retirement, rent out, or as a residence for summer holidays. Appealing to EU and non-EU citizens, the country has much to offer property buyers, and as real estate agents, we guide buyers through the need to know and what to be aware of.
From major cities to the French Riviera to those gorgeous beachside homes, whether you want a budget home or to buy luxury villas, the market is straightforward to navigate if you know what you are doing. With that in mind, we have put together this guide and advice on everything about buying.
Buying Property in France as a Foreigner
Reasons to Buy Property in France
Diversity of Places: If there is one thing that France isn’t short of, it is varied landscapes and places. From the French Alps’ mountains to waterside homes and luxury penthouses of Paris, the choice of locations makes searching exciting.
Diverse Weather: If hot sunshine isn’t your idea of ideal living, head north for cooler temperatures. However, those who like the sun’s rays will love the pleasant south, which offers perfect temperatures all year round.
Property Market: There is no need to compromise on your perfect home. Everything is for sale, from rural country homes to large villas to penthouses with amazing views. The varied architectural styles are something to watch out for as well.
Solid Buying Process: The real estate market’s stability, twinned with well-managed property law and notary presence, makes for a more regulated market with fewer risks. Real estate agents need a licence to operate.
Transport and Public Services: Besides ferry and road services, the impressive air travel network and airports make getting to France easy and quick. France is known for its excellent healthcare and public education systems.
Rental Investments: Look for areas with high tourism influxes, and landlords potentially achieve 100% occupancy all year round.
Lifestyle: We hardly need to mention the reputation of French cuisine, but combine this with the lifestyles of sailing, skiing, and city exploration, and you will never be short of things to do. French nationals also welcome foreigners, and many speak English.
Pitfalls, Cons and Risks of Owning a French Home
Tourism: Do check the area for tourism seasons. Certain places, like the 7th arrondissement in Paris, home to the Eiffel Tower, and the beaches in Normandy, receive high influxes of tourists. While this isn’t bother for some, others who want quiet lifestyles, should avoid these areas.
Red Tape: Like other countries, France has a reputation for bureaucracy and red tape, not only in the French property market but in all areas of life. While this is unavoidable, preparing and knowing the process beforehand avoids unnecessary stress.
Money Matters: Certain places like Paris are known for their high living costs. Research the living costs of the area you plan to move to because some places fare better. The cost of maintaining a home, including utilities, taxes, and insurance, is relatively high, especially in sought-after areas or cities. Additionally, know your taxes, as France is not tax-friendly. Speak to a financial advisor if you keep roots in your home country.
Renovation Properties: Some buyers dream of buying an old farmhouse or country estate and renovating it. However, the legal paperwork, arranging workers, and other renovation costs make renovation properties a waste of money. Instead, buy new-build homes, off-plan, or resale homes.
Travel: Check out travel coordination. One common mistake is assuming that flight schedules are the same year-round. Many airports scale down in winter.
The Property Buying Process
Purchase Intent: After finding a home they want to buy, the potential buyer makes an offer to purchase in writing. The sales agreement includes the offered price, any terms and conditions of the sale, and how long the period offer is valid.
Notary: When a seller accepts an offer, both parties appoint a notary to handle the legal aspects. Each party nominates a separate or single notary.
Technical Surveys and Certificates: These include an energy efficiency performance certificate, natural risks, and the CO2 report, which should be organised before the building is marketed. (Don’t underestimate the energy performance certificate, as this saves money on bills.) Many buyers also request a structural survey.
Compromis de Vente contract and deposit payment: At this point, the buyer pays the deposit into the notary escrow account. This is roughly 10% of the purchase price. The deposit is guaranteed and backed by the French government. There is a 10-day cooling-off period for the buyer to withdraw and receive the deposit back, with no costs. An initial contract called the compromise de vente or promesse de vente will be signed. Although a preliminary agreement, this is a legally binding document.
Land Registry Research: A public official from the notary office completes this, and in addition to checking official ownership, they check for any other land issues and documents.
Completion and registration: The buyer may appoint a power of attorney to do this for them. Additionally, the buyer must purchase home insurance before signing; however, if you buy with a mortgage from a French bank, the loan provider typically includes this. Otherwise, shop around insurance companies for the best policy. They vary from basic liability insurance to multirisk insurance policies. Otherwise, both parties sign the completion in front of the notary. Before signing, all financial obligations, including the remaining purchase price, are paid. The notary office then files the sale with the land registry office to finalise the deal according to government regulations.
Extra Fees and Taxes for the Purchase Process
The following are additional costs at the time of purchase if the type of property is not classed as a new building.
- Real estate transfer – (5.09% of the purchase price)
- Real estate security (contribution de sécurité immobilière) (0.1%)
- With notary fees (including stamp duty), the total purchase cost is 7%.
For homes under five years old, a 20% VAT tax is added to land registry fees of 0.715%, a real estate security fee of 0.1%, and notary fees of 0.825%. Thus, the total purchase cost is 2.5%.
Rental income Tax: Rental income is a tiered rate of up to 45%, along with social contributions of 17.2%. Expenses related to real estate properties can be deducted from the income, but landlords are prohibited from claiming a depreciation allowance for unfurnished homes. Do seek professional and legal advice.
Ongoing Costs of Ownership
- Taxe foncière: Paid annually by the owner.
- Taxe habitation: Annually paid by the occupant
- Contribution Foncière des Entreprises (CFE): An additional tax for furnished, rented properties based on cadastral value.
Capital Gains: The capital gains tax on a property sale is 36.2% for resident and non-resident sellers. The tax is reduced if the home has been held for five years. The total exemption applies for 22 years. Wealth tax applies to those with more than 1.5 million in assets.
About Buying Property in Paris
Ah, Quaint Paris. Foreign property buyers and French citizens alike love the creme de la creme of French cities. As a famous region for property sales, Paris ranks as the most expensive place, with an average price of €10,684 per square metre. Paris is divided into arrondissements, some of which market for budget sale prices and others for luxury property for sale.
The most expensive arrondissement is 6ème, home to the Latin Quarter and Luxembourg Gardens. Homes here sell for roughly €16,009 per square meter, but the options of properties for sale are excellent. For budget homes, look at the 20ème and 19ème arrondissements. Expats often favour neighbourhoods like Le Marais, Montmartre, and the Latin Quarter due to their charm and proximity to major attractions.
Housing Markets of the French Alps
In stark contrast to other places, the French Alps involve diversifying your property search from townhouses to ski apartments and chalets. Once only connected with the past time of skiing, these days more foreign buyers love the Alps simply for more rural living and, of course, quality living with nature. Many people have a secondary residence to spend weekends away, and while winter is the high season due to skiing, summer activities like hiking, cycling, and paragliding have made the Alps a year-round destination.
Rental yields are vital for investments in high-demand areas, especially well-known resorts. Ski-in, ski-out properties, or those close to slopes, tend to be particularly sought after. In premier destinations like Courchevel, Megève, and Val d’Isère, property prices exceed €20,000 per square meter, especially for ski-in and ski-out chalets. At the same time, there are more affordable resorts like Alpe d’Huez and Les Deux Alpes.
- Is ski property a good investment?
- Why are the French Alps so popular?
- What is the VAT rebate incentive?
Luxury Property in Côte d’Azur
Côte d’Azur, also known as the French Riviera, covers the Mediterranean coastline in southeastern France. Renowned for glamour and luxurious resorts, it stretches from the eastern border with Italy to Toulon or sometimes even Cassis. However, traditionally, it’s considered to cover the area between Saint-Tropez and Menton.
Key cities include Nice, Cannes, Monaco, Saint-Tropez, Antibes, and Menton. Côte d’Azur became popular in the late 18th century when British and Russian aristocrats discovered it as a winter retreat. It became synonymous with luxury tourism by the late 19th and early 20th centuries.
The largest city on the Riviera, Nice, is famous for its Promenade des Anglais, its old town (Vieux Nice), and the beautiful Baie des Anges. Meanwhile, renowned for the Cannes Film Festival, Cannes has a more exclusive, glamorous feel with luxury shopping, yachts, and elegant boulevards like La Croisette.
Though not part of France, the tiny principality of Monaco is nestled on the Côte d’Azur and is famed for its casinos, the Monte Carlo Grand Prix, and luxurious lifestyle of residents. Antibes is a quieter but charming town with a well-preserved old town, the Picasso Museum, and a large marina, Port Vauban, full of yachts.
Initially a quiet fishing village, Saint-Tropez rose to fame in the 1950s thanks to Brigitte Bardot and has since become a playground for the rich and famous. While known for its lemon festival, Menton lies near the Italian border and offers more relaxed vibes.
Popular with British Expats – Brittany
Brittany, or Bretagne in French, is a region in northwestern France bordered by the Atlantic Ocean and the English Channel. It offers an attractive contrast to tourist-heavy areas. The capital is Rennes. Other major cities include Brest, Lorient, Quimper, and Vannes. Brittany is generally more affordable than other parts of France, especially compared to Paris or the Riviera.
While Brittany doesn’t have the massive expat populations seen in places like the Dordogne or Provence, there are still thriving expat communities, particularly among British, Dutch, and Belgian nationals. The Pink Granite Coast and Pointe du Raz are incredibly picturesque, and regular ferries between Brittany and the UK make it a convenient choice for British expats. The ports of Saint-Malo and Roscoff have regular crossings, while Rennes, Brest, and Nantes airports provide domestic and international flights, offering UK and European connections.
Foreign Buyers Love the Normandy Property Market
Normandy (Normandie in French) in northern France is known for the D-Day landings of World War II. Located along the English Channel, bordered by Brittany and the Île-de-France region, Normandy consists of two main areas: Upper Normandy (Haute-Normandie) and Lower Normandy (Basse-Normandie). The capital is Rouen. Other important towns include Caen, Le Havre, Dieppe, Cherbourg, and Bayeux.
Caen, Bayeux, and Rouen are popular areas for expat residents. Several bilingual or international schools in Normandy, particularly in cities like Rouen and Caen, allow expat families to access English-language education. Normandy’s coastal towns, like Cherbourg, Dieppe, and Caen, offer UK ferry services, and the nearest major international airport is Paris Charles de Gaulle, easily accessible by train or car.
Can I live in France Permanently if I buy a House?
Owning French property doesn’t automatically grant you the right to live in France. To live there for more than 90 days, apply for a residence permit. Various visas are available, but most expats apply for the VLS-TS long-term visa. After ten years, you can apply for citizenship or after five years if you have made significant economic contributions.
Getting a French Mortgage
Most mortgage brokers will only let non-EU citizens borrow up to 50%; otherwise, EU citizens can typically apply for 70 to 80%. To qualify, your liabilities and expenses cannot exceed 30% of your monthly income, and all mortgage providers will check this since it is part of mortgage finance law. Compare mortgage products with bank loans in your home country and seek legal advice if unsure.
Our Services Will Help You
Contact us today to receive professional advice and guidance throughout the buying process. We are Skiing property agents, and we’ve helped many British citizens and other nationalities buy ski property in France. Call us today and chat with an agent to learn more about property prices, local real estate markets, or rental yields. Otherwise, see our portfolio of homes for sale in the alps and use the contact details to find out more or arrange viewings of properties in France.
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