Buying Property in France

If you’ve fallen in love with France and intend to make the dream of owing a French property a reality, this brief guide to buying a property in France should help you successfully navigate the purchase process.

With a clear understanding of how the buying process works in France you will be forewarned, forearmed and have the necessary information at your fingertips to make your experience of buying real estate in France a pleasant one.

Budget

Before you even begin your hunt for that dream home you should set yourself a realistic budget.  Don’t forget that you will incur fees and charges when you buy and you should factor these into your budget so that you know how much you will have to spend on the property and how much you will then need to pay out for solicitor’s fees, mortgage arrangement fees etc., on top.

Furthermore, you need to decide how exactly you’re going to pay for your French home.  Are you thinking of buying cash, re-mortgaging or raising a mortgage on the property?  Each option has its own distinct advantages and disadvantages…for example: -

Cash buy: - advantage = simple.  Disadvantage = tying up a large sum of money into a slow to liquidate asset
Re-mortgage: - advantage = turning equity from one property into bricks and mortar in another property.  Disadvantage = your French property will effectively be secured against your primary residence and you may be risking your primary residence for the sake of your second home.
New mortgage: - advantage = interest rates in France can be lower than re-mortgage rates back home.  Disadvantage = red tape.

Whichever option you decide upon make sure you can meet your budget and do not be tempted to go over your budget limit once you’ve decided upon it as you may find you overextend yourself financially.

Fees, Charges and Costs

As stated you should factor fees and charges into your budget, but you should also be aware of when monies are due so that you have the necessary funds available in plenty of time.

When you agree to purchase and sign the Compromis de vente you will be required to pay a maximum of 10% deposit.  Transfer this money in cash or cheque form to the solicitor (Notaire) in charge of the sale rather than to the vendor as it will then be held securely until you complete on the property and all searches have been conducted satisfactorily.

Legal fees will be up to 8% of the purchase price for older properties and 4% for brand new properties and should be payable upon completion of the sale.

Estate agency fees of between 5 and 10% can be payable and unfortunately it depends on a case by case basis whether the buyer or vendor pays these fees.

If you’re taking out a French mortgage and are living in France and a french resident for tax purposes you can raise up to 100% of the purchase price, if you’re a tax payer in another EU country you can raise up to 85% and if you’re a tax payer elsewhere you can raise up to 80% of the purchase price in the form of a French mortgage.  You will have to pay an arrangement fee of around 1% of the mortgage amount.

If you do take out a mortgage in France you’ll have to have life assurance to secure the loan and this can either be arranged when you take out your mortgage through the lender or you can take out an independent policy.  Generally speaking a life assurance policy will be medically underwritten so if you’re in good health and lead a healthy life the payments will be lower.

Finding a Home

With all the boring considerations out of the way for the time being you are now free to begin searching for your dream home!  You will probably already have a region of France in mind but you need to give close consideration to the type of location and type of property you would like to buy - i.e., are you more interested in a brand new property in a town or a rundown rural retreat miles from anywhere?

Consider looking online and in any one of the magazines published nowadays with properties for sale in France to get a good idea of what you’ll be able to buy for your budget and then take an extended break in France to meet with agents and view suitable homes.

View as many properties as you can manage during your time in France even if you fall in love with the first one you see.  You need to make sure you are getting good value for money from whatever you buy.

Agreeing to Purchase

Once you’ve sourced your ideal home in France and have had an offer to purchase accepted, you will sign the initial sales contract which is the Compromis de vente.  Make sure you read and understand an official English translation of any document you’re required to sign and be sure that you instruct a Notaire to act on your behalf to conduct all the necessary searches and title checks.

It’s usual for the Compromis de vente to have a clause protecting you and your 10% deposit should searches not be completed satisfactorily which could result in the sale falling through.

Completion

With your mortgage secured and the cash in the bank, with the searches, title checks and any survey you have commissioned completed to your general satisfaction it is now time to complete.  Upon the day of completion the vendor and you (or someone you give power of attorney to) will sign the acte de vente (final deed of sale) in front of the Notaire.  At which point all outstanding fees and taxes will be due and the final balance will be transferred to the vendor.

Ongoing

As a home owner in France you will be liable for two taxes, the Taxe fonciere (land tax) and the Taxe d’habitation (local taxes).  When it comes to French taxes you should also be aware that the laws of succession differ greatly in France to the laws of inheritance in the UK and you should get advice from your Notaire on how to ensure that your property is properly dealt with according to the terms of your will upon your death.  This advice should be sought before you sign the final deed of sale and should not be forgotten.  It is very difficult to sort out after the final contract has been signed.