How to buy property in France as a foreigner

Property in France generates steadily high demand among foreigners. People from all regions of the planet are dreaming of owning a villa in the South of France, a vineyard in Provence or a cozy ski chalet. In this article, we'll share a comprehensive guide to buying a holiday home as a foreigner in this Mediterranean country.

Do Americans Have a Right to Purchase Property in France?

Americans can become rightful owners of houses and apartments in any region of this country. Yet the paperwork takes them longer, compared to EU buyers, and the fees are higher. It would be smart to ask for the advice of a local real estate specialist from the onset to minimize the expenses.

Are People from the UK Allowed to Buy a House in France After Brexit?

UK citizens don't need permission to invest in real estate in France. But they handle more paperwork, compared to buyers from the EU. The requirements are regulated by the national authorities and not the EU.

Is It Possible to Buy Property and Get Residency in France?

France doesn't enable foreigners to get residency for becoming an owner of a property, regardless of its price. Nevertheless, you can get a residency using other methods — for instance, tying the knot with a French citizen.

What's the Average Cost of Buying an Investment Property in France to Rent Out?

Predictably enough, Paris is the most premium location. Top apartments might cost up to €10,500 per square meter. In rural regions, prices are considerably more affordable. The price of one square meter in a modest house can be around €950. When purchasing an apartment, be ready to pay around €240,000, on average. The price tag for a small studio is around €129,000.

How Long Does It Take to Purchase a Property in France?

Generally, it takes from 8 to 16 weeks. A couple of months will pass from the moment of signing the preliminary contract with the seller till transferring the full price to them and obtaining the notarized contract. Plus, it takes time to detect the ideal investment.

Which Taxes and Fees Are Foreign Buyers Supposed to Pay?

In addition to paying the full price of your new property, factor in these expenses:

  • Fee of your real estate agent — up to 8%,

  • Stamp duty — around 6%,

  • Notaire fees — up to 4%.

Those who apply for a mortgage pay €250 for a valuation survey and a 1% arrangement fee. The land tax varies from 1% to 3%.

How Difficult Is It to Get the Mortgage?

When a local applies for a mortgage, they can expect to receive from 70% to 85% of the property's cost (sometimes even 100%). Being a non-EU resident, you can expect to get from 50% to 75% of the cost. Your pension, salary, business revenue, dividends and other sources of income will be taken into account to make the ultimate decision.

According to the law, the maximum sum that you'll be required to pay back to the bank each month can't exceed 35% of your household income per month. The minimum sum that a bank can give to those who apply for a mortgage usually falls within the range of €50,000 to €100,000. However, it might be higher for clients who lack an EU residency.

What Are the Most Common Pitfalls When Buying Land and Real Estate in France?

Here are the most frequent blunders that foreigners make when investing in French land and properties:

  • Fail to factor in all the expenses involved.

  • Get accused of being accomplices to tax evasion for paying cash to the seller.

  • Neglect the inheritance laws.

  • Invest in off-plan houses (if the developer fails to finish the project, the buyer might never be able to move in).

  • Don't inspect the house or apartment properly (you don't have to arrange expertise but it's essential for revealing flaws that the new owner will have to fix).

  • Invest in a property that requires renovation (without understanding the specifics of the local market, they can hardly estimate the costs that the works will incur).

  • Forget to consult the local authorities about their plans for the building that the foreigner purchases and the surrounding area (some elements of the surrounding landscape might be scheduled for demolition or reconstruction, which may affect the property that the foreigner buys).

Without the support of a professional who knows the market inside out, it might be tricky to detect the pitfalls and avoid them.

Step by Step Process Buying a Property in France as an American

When buying a house in France as a non-resident, stick to this algorithm:

  1. Pick a region and the object that you'd love to acquire.

  2. Hire an experienced agent who specializes in providing services to foreigners.

  3. Inspect the property in person.

  4. Compose your offer in written and verbal form.

  5. Ask a notaire to draft a preliminary agreement for you.

  6. Make a deposit (normally, it should be 10% of the total price).

  7. Edit the text of the final version of the contract.

  8. Decide on a payment option.

  9. Hand over the documents to the notaire.

  10. Sign the sales contract in the notaire's office and let the seller hand over the keys to you.

  11. In up to 6 months after the date of signing the contract, the notaire will send you a copy of the purchase deed.

That's it! Feel free to consider France your second home!

Which Questions to Ask Before Signing a Contract with the Property Seller?

When inspecting the property before the purchase, it would be reasonable to clarify the following aspects:

  • Why did the owner decide to put it on sale?

  • How long have they been using this house or apartment?

  • Is it equally good as a full-time and part-time house? If it's good only for part-time living, then why?

  • Has the owner ever rented out this house or apartment? How much money did they make on it? Was it a seasonal rental or not?

  • How long have they been looking for a buyer?

  • How many potential buyers have approached them? Why did they refuse to purchase it?

  • How much money should the new owner be ready to pay in taxes?

  • What is and what is not included in the property price (such as fittings, fixtures and furniture)?

  • How much will the new owner need to invest to improve the property?

  • Which reconstruction works need to be done?

  • When did the owner replace the roof for the last time? Is it in good condition now?

  • How old is the septic tank, if there is one?

  • How old is the swimming pool and how good is its condition?

  • Is cable Internet or Wi-Fi available? How fast and reliable is it?

  • Has the owner ever tried to add extensions to the property or modify its initial plan? If yes, did they manage to get permission? What did they do? Which documents can confirm that all the alterations were legal? If they weren't granted permission, what was the reason for that?

  • What's the status of the land where the property is located? Can the new owner build something on it?

  • Who are the neighbors and what is their lifestyle? Have they ever had any disputes with the property's owner?

  • Where are the boundaries with all the adjacent properties? Are they marked, is it easy to find them?

  • Where is the closest supermarket, pharmacy, restaurant and so on? How easy is it to get there?

  • What's the best school, cafe, beach and so on in the area?

  • Are the authorities planning to build any large-scale projects nearby, like new roads?

The longer the owner has been trying to sell the property and the more funds you'll need to invest in its reconstruction, the larger discount you can ask for. Avoid purchasing houses and apartments that underwent alternations that might be not 100% legal. In addition to getting the owner's answers, conduct independent research about the area and the plans for its development.

What Are the Current Real Estate Market Perspectives in France?

The French economy has recovered from the pandemic faster than most of its European counterparts. It came back to the pre-COVID level in Autumn 2021. Property prices are only expected to grow in the next few years.

The Bordeaux region witnessed a nearly 50% growth in property prices over the last decade. In selected regions, the prices dropped over the same period but not too drastically — such as 5% in Rouen. If you purchase a high-quality property in a popular French location now, its price is projected to grow significantly.

What Are the Specifics of the Local Inheritance Laws?

The local legislation protects the rights of the kids and spouses of those who are legally married. In a family with no kids, 25% of the property will belong to your spouse and the rest will be freely disposable. If you have kids, they will inherit from 50% to 75% of the estate (the more children you have, the larger the part that they inherit).

This rule isn't relevant for couples who haven't tied the knot officially. If one partner dies being the only owner of the property, their better half will be able to stay there for up to a year but won't inherit it.

How to Transfer Funds to France?

Users from outside the EU opt for three methods of transferring funds to recipients in France:

  1. Banks. Banks are reliable, so you can safely entrust large sums to them. Barclays and HSBC are the two institutions that are omnipresent in France. If the transaction involves a correspondent bank, it might take longer and incur extra fees. The biggest drawback of this method is low exchange rates. For instance, the sender who wants a French recipient to get $1,000 from them might have to send around $1,070.

  2. Online transfers. You rely on a provider that is not a conventional banking institution, such as TransferWise or Currencies Direct. They operate faster than banks. They are accessible as websites and mobile apps. After you sign up, you can deposit funds to your account through a bank transfer, direct debit, credit card or debit card (others options are possible too). As soon as the system verifies your transaction, the recipient in France will get it in a few minutes. They will be able to get the money as banknotes in an offline branch of the service provider or in digital format.

  3. Cash transfers. Western Union and MoneyGram are the most prominent brands in the niche. They accept bank transfers, credit or debit cards and cash. You'll send funds from a store of the selected provider and the recipient will get them in another store.

The crucial parameters to focus on are the exchange rates and the fees of the chosen payment option. Be ready to show your ID or passport to the payment provider. Besides, you should know the full name, phone number, physical address and bank details of the recipient.

Is It Challenging to Launch a Business in France?

Individuals who don’t have a EU residency may launch a business in France by registering a business address. It might be a virtual one or they may rent a brick-and-mortar premise. No residency will be granted to them simply because they run a business in this country — but they can earn money. You'll be required to show a business plan written in French to a local bank where you'll open your company's account. The aim of the business plan is not limited to proving the sustainability of the project. You also need to explain how it will integrate into the local economy and how the French people will benefit from it. Plus, you'll need to hire a local accountant.

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