Moving to France? Find out what you need to know before buying French property and how to find your dream home in France.
If you’ve found yourself gazing into windows of French agents immobiliers or online at French properties for sale, it’s important to know the quirks of the French property market first.
Buying a property in France can be tempting: You tend to get a lot more for your money than some other countries, for example in the UK, and it’s easy to picture yourself enjoying a glass of local wine on your own sunny terrace. However, making the decision to buy a home in France is a big commitment – and it can be an expensive mistake if you get it wrong. This guide explains how to find – and buy – your dream French home.
Is now a good time to buy French property?
Property prices in France fared relatively well during the global economic crisis unlike some of France’s neighbours, such as Spain and the Netherlands where property prices dropped more than 20% and 40% respectively.
France is one of Europe’s core performing housing market and it continues to attract international investors, with stable year-on-year price growth.
Indeed, in the last quarter of 2017, prices increased by 3.3% year-on-year, with older apartments (4.5%) leading the charge. The biggest increases came in Paris, where second-hand properties increased in price by 5.1% in the last quarter of 2017 and 8.6% year-on-year.
So far in 2018, prices have remained robust, though transaction levels actually fell slightly, with 42% of banks reporting a drop in loan applications in February 2018.
France’s property market upturn since 2015 has largely been fuelled by low mortgage rates, which in February 2017 remained very low – at just 1.61% in February 2018.
Consistently low inflation, however, has kept property yield low at around 3 or 4% – In 2018, however, inflation has begin to increase at a stable level – rising from 1.3% at the start of the year to reach 1.8% in April.
The euro is also weaker than it has been in recent years, meaning foreign buyers can get a more attractive exchange rate for their property investments and essentially pay less for a property than compared to recent years.
Should you buy or rent in France?
If you’re already sure about where you want to live in France, and are familiar with what life will be like there, you’ll be more knowledgeable to look directly at properties to buy. If you’re not, then renting a property first is a good way of finding out. Renting allows you to see what living (rather than holidaying) in France is like and to find out if an area works for you. What might have been an idyllic rural getaway could have too few services for what you realistically need. You can also find out what a place is like at different times of year: That hot summer location may be a very different prospect during a cold, dark winter. It gives you a better base from which to find a property to buy – and, more importantly, you’re already in situ when the perfect property comes up.
Finding a property in France
To find French properties for sale, you can look online, in newspapers and property magazines, with an estate agent or realtor (un agent immobilier) or even – if you know what you’re doing – through a public auction (vente aux enchères). International buyers may be able to find a realtor who can communicate, and later negotiate, in English. Most people will go to an agent immobilier at some point, the more common process, but, unless you have a personal recommendation, how do you find a good one?
Look out for the acronyms FNAIM, SNPI, UNIS or CNAB, as these show that the company belongs to a registered organisation, which has a financial guarantee, liability insurance and at least one staff member holding a carte professionelle, a licence issued by the prefecture de police.
Like elsewhere, some industry professionals engage in unethical practices. As a measure to further safeguard buyers, the French government created the Conseil National de la Transaction et de la Gestion Immobilières (CNTGI) in 2014, a representative body for maintaining ethics and creating regulations for real estate professionals and property-related activities.
When choosing a realtor, ask whether they will help prepare the compromis de vente (the sales contract) and liaise with a local notaire, the official who will handle the legal side of the purchase. Even if the seller already has a notaire, you can nominate your own with legal fees split between the two officials. The agent immobilier may also help you set up utilities and find local services like builders, doctors, etc, so it helps to ask what they can offer.
After you choose a licensed realtor and view French properties, they will usually ask you to sign a bon de visite, which certifies they showed you certain properties.
You don’t have to go through an immobilier. You can try buying directly from the owners. Check out the De particulier à particulier’s website at www.pap.fr which has English language pages with thousands of properties for sale and for rent across France.
Buying a property in France
Once you’ve found a French property you like, don’t hesitate to visit it several times to assure it checks off the requirements (in French) and whether more work needs to be done after a purchase.
Following that, you can make the owners an offer. If they accept, you have to sign a contract, either a promesse unilatérale de vente (unilateral offer to sell) or, more commonly, a compromis de vente. The compromis de vente is typically a sale and purchase agreement, while the ‘promesse‘ is commonly used by property professionals wanting to secure an ‘option’ to buy land or property that they may be seeking planning consent or if there are other unknown parameters.
With the former, the owner promises to sell the property to the buyer at a given price and keeps the option open for a limited period of time (two to three months). The buyer puts down a 10 percent deposit and the document has to be registered with the authorities (for a fee). The buyer can’t sell to anyone else during this time but the buyer can withdraw and lose the deposit.
With the latter, both buyer and seller agree to cement the deal at a given price, the buyer puts down a 10 percent deposit and in legal terms this is a ‘final sale’. If either party pulls out, the other can take legal action and claim damages. Both contracts have a seven-day cooling off period during which time the buyer can withdraw without penalty.
Before signing the contract
Check that all the details are correct. It should include full details of the property (its surface area and boundaries), set out exactly what is included in the sale, such as dependences (outbuildings), fixtures and fittings, the results of legally required reports (energy performance report, checks for termites, asbestos and lead in the property, electricity and gas safety certificates), and whether there are any conditions suspensives (conditional clauses) or other statutory disclosures, such as vive cache (hidden defects), easements and other possible legal interests over the property, such as tenancies.
Include a penalty clause if certain conditions are not met, for example, requiring vacant possession of the property, can lead to fines if the vendor — or other occupants — fail to vacate the property after the sale.
You’ll need to supply details of how you’re going to finance the purchase, too. If you plan to purchase the property through a mortgage, there must also be a condition describing the loan’s main details and stating that the sale can only be completed only after a satisfactory mortgage is secured. To secure a mortgage at the most advantageous interest rates, you can use a mortgage broker such as Private Rate, who are specialized in helping expats obtain financing on their dream home. For more information on mortgages, see Expatica’s guide to French mortgages.
After you’ve signed
The notaire will investigate any legal, financial or other claims on the property, which usually takes about three months but occasionally longer. Once this is underway, a completion date (when you sign the acte de vente, or deed of sale) can be set. In the meantime, you might want to have a structural survey carried out although many locals don’t bother.
If you’re planning to build your own home on a plot of land or substantially alter an existing building, you’ll need to get permission from the mairie. You’ll need to apply for the certificate d’urbanisme (certificate of town planning), provide a permis de construire setting out your building plans and check what other taxes or fees you’ll need to pay.
In France, property (even that owned by foreigners) are always passed to the children, so take advice from the notaire before you take the next step – signing the acte de vente – about your own situation.
Fees and taxes
Costs may include the notaire’s fees (which include certain costs to do with the sale). These fees are set by the government and depend on the tax bracket of the property. These are as follows:
€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 fees involved in buying the house can’t exceed 10% of the property’s value.
You’ll also need to pay stamp duty when buying a house in France. Properties over five years old are charged at 5.8% (though a few are charged at 5.08%), while newer homes are charged at 0.7% plus 20% VAT. Some homes are sold TTC (toutes tax comprises) – meaning all taxes are included.
There are two taxes on residential property: land tax (taxe foncière) and local taxes (taxe d’habitation), which are due on 1 January every year, so you will pay a pro-rata amount. See our guide to French taxes.
The deed of sale
Once all the checks and searches are done and the funds to purchase the property are in place, you’re ready to go to the notaire’s office to sign the deed of sale, the acte de vente. You may need to take a translator with you if you don’t speak French, as the document will be read aloud to you before you sign. Once this is done, you have to pay the various taxes and fees, and the deeds in your name will be registered at the Land registry. You will now be the new owner of property in France.