Buying Property in France? Want to avoid the common pitfalls?
Buying property in France is an exciting but exhausting experience. This tailored article simplifies the process and ensures purchases are completed in the most cost-effective way for yourself and not the seller or the French agent.
Establish your Reasons
France is famous for its relaxed lifestyle, excellent food and quality of wine, and these often feature highly for Expats and retirees. The South of France offers these in abundance with the added advantage of enjoying them in a beautifully warm climate.
Whatever your reasons are for buying property in France, they must be clear and fresh in your mind. Flights to France are inexpensive so take the opportunity to get to know your region. Your passion to move will certainly make the more demanding phases of buying property in France all the easier.
Know your Budget
The biggest ‘non-financial investment’ will be your own time spent reviewing properties so knowing your budget is essential in using this effectively. One of the most common mistakes people make is to view properties beyond their finances.
This is not only an unproductive use of time but can leave you feeling unenthusiastic about those properties within your range. Clearly understanding your finances and available funds is crucial when buying property in France and you can accomplish this today by getting started with a hassle free assessment from the comfort of your own room.
Know the Costs
Your budget should include an additional buffer of 8-12% of the property purchase price to cover the following unavoidable costs of buying property in France:
- Transfer fees: 6-7.5%
- Notary fees: 1-1.5%
- Legal (solicitor) fees: 1%
- Property registration fee: 0.6-1%
There is also no getting away from Stamp Duty which the South East have fortunately retained at 5.09% unlike other departments who raised it to 5.8% in January 2014. Optional expenses include surveyors, mortgage fees and estate-agents.
The Côte d’Azur is a sought after region and so finding a property that will triple in value as your second home is unlikely. Crucially though, this demand in the property market affords buyers the safety net of stable and rising property prices.
Countless properties with stunning views and deep architecture can be found within the €300-500k bracket. Properties with a sea view often rise towards and beyond €1m. A popular alternative for couples and retirees are apartments which can be bought from as little as €160,000 in the some of the region’s most vibrant urban areas.
Mortgage Options & Taxation
If financing through a mortgage, important decisions must be taken in relation to the country and currency of the mortgage. Macro-economic factors such as projected base rates and currency stability need to be taken into account, but the decision is also largely an individual matter.
Thoughtful assessment of where your future sources of income may come from and your long-term plans for the property are essential in making the best long-term decision. It is rarely black and white though and varies dramatically with your personal financial arrangements, so seeking expert advice of your individual financial landscape is vital.
Taxation for Expats in France is a complex topic with numerous personal factors. An individual assessment is the only way of providing quality advice that is specific to your situation.
Taking Professional Assistance
It is not uncommon in France for purchases to proceed without appointment of a solicitor. This may save money, but it is not advisable. Even as a confident French speaker, an independent solicitor in your native language is the best option.
The Notary is a compulsory part purchasing property in France and acts under Minister of Justice authority. Although slightly more costly, always appoint your own Notary to act on your behalf as opposed to sharing one with the vendor.
Notaries exercise a monopoly in the market, but their fees are unavoidable so you are best to embrace their services and utilise their expert knowledge. Their local government knowledge on proposed motorways, rail links, constructions or other constraints is crucial in estimating the future value of your property.
Finally, a key area often overlooked in the excitement of finding your ‘perfect property’ is the competitiveness and timing of your exchange deal. Charges levied by high street banks can be extortionate and representatives are unlikely to have the expertise or incentive to help you attain the best possible rates.
Political events regularly cause exchange rates to fluctuate dramatically, while 1-2% may sound small, €10k can quickly evaporate from your transaction value. Harrison Brook specialise in such currency matters so speak with an advisor today.
How do you get started and take the first step?
Click Get Started for a free, no obligation, tailored analysis of your financial situation from Harrison Brook Advisor in France.