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French property market overview
France has long been a favourite second home destination for the British. Whether buying a derelict farmhouse in Brittany or a luxury villa on the Cote d'Azur, property buyers from the UK have had a penchant for buying French property for decades. Traditional ferry routes have been augmented by cross-channel road and rail links and a mushrooming of budget flights to an ever-increasing number of French airports. France’s road and rail networks are extensive and provide an efficient way of reaching the major destinations across the country.
- Low-cost flights, ferries, the Channel Tunnel and an extensive road and rail network have opened up many parts to visitors and those buying property in France
- Countryside, coast, mountains and cities – there’s a massive choice of property for sale in France
- There are many cheap French properties for sale outside of the best known areas
- The change in the ‘leaseback’ scheme means that buyers of new-build property in France can be exempt from paying VAT on their new home
- Just because a French property is expensive, don't think that it can’t make a great investment
The French Property Market
The French property market is extremely diverse, much like the country itself. There are many opportunities to buy land and property for renovation in France at low prices in the northern and central regions, a popular course of action for thousands of Brits already.
There are world class properties in France, with prices to match, in its fashionable resorts along the Côte d’Azur, in Paris and in the idyllic rural regions of Provence and the Dordogne. Mountain chalets, for skiing in winter and outdoor pursuits in summer, also command top prices in the major destinations.
The good news for buyers of property in France is that there is a wealth of property all over the country between the two extremes; restored farmhouses, smart new-build city pieds-à-terre, sprawling vineyards, winter sports apartments, family villas and other properties for every taste that will not cost the earth. Some areas have established international and expat communities, others demand absorbing the local culture wholeheartedly; both have their appeal to different types of property buyer.
Proximity to the UK is a big plus for holiday homers, millions of tourists and a healthy domestic property rental market are a big plus for investors in property in France looking for returns. Capital appreciation of home prices has been very good over the past few years. The ‘leaseback’ scheme guarantees rental returns and there is now exemption from VAT on new-build properties.
The Process for Buying Property in France
- Once the property buyer has found a property and made an offer, both parties must sign a Compromis de Vente; a legally binding agreement setting out all terms involved
- Financing will have to be sorted out by this stage as details regarding any loans must be clearly outlined in the Compromis
- There is then a seven-day cooling-off period, which gives the buyer (but not the seller) the opportunity to back out of the deal without penalty. A 10% deposit is then required and the notaire carries out all checks on the property (for clean title, wood rot, etc)
- Before the signing takes place, all funds must be transferred to the notaire’s account. Failure to do this on time could mean the property buyer loses both the property and the money
- If the buyer is not able to visit the property before signing the final contract, a representative should do so on their behalf to make sure that everything is in order. The contract clearly states that the property is accepted in its condition on the day of sale
- Finally the Acte de Vente is signed in front of the notary, and the sale is complete
Buying Property in France - Fees ' Taxes
- Vary hugely depending on the region and type of property, but set aside 12% to 15% of the selling price
- Allow around 6% to 8% per cent for notaire’s fees. This includes stamp duty, which varies from 0.6% for a new-build to 6% for any property over five years old
- Agents’ fees vary greatly and can be anywhere from 4% to 15%. Around 7% is the most common amount, but check when looking in agent’s windows for the letters FAI after the price – this indicates that their fees are already included
- IVA (VAT) of 19.6% is applicable on most fees and taxes, but is avoided on leasebacks. The price of new-build properties usually includes 19.6% IVA, but always verify this from the start
- If a French property is sold on within two years, capital gains tax is likely to be in excess of 33%
- Transfer tax varies greatly, but for properties over five years it tends to be around 7%
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Hotspots to Buy Property in France
Paris propertyThe capital has the highest property prices in the country, but there are some up-and-coming inner districts where a property bargain can still be found in one of the world’s greatest cities
Property in ProvenceThis area comprises both costal and inland areas so there'apos;apos;s a vast choice of property for sale in Provence. Generally, properties here are not cheap but foreign nationals can borrow up to 100 per cent loan-to-value (LTV) of the purchase price.
Cote d’Azur PropertyCôte d’Azur properties are second only to Paris in price. However, you don'apos;apos;t necessarily need a fortune to buy a Cote d’Azur property and with so many tourists, rental potential is good. Capital appreciation is also high, making a property here a sound investment.
Midi Pyrenees propertyMidi Pyrenees is an area of diverse landscapes and an increasing number of property buyers are drawn to the north of the region with it's dry, hot summer climate and short winters and many cheap character properties.
Languedoc propertyHaving 300 days of sunshine, it's no wonder that Languedoc is so popular with both tourists and buyers of holiday homes. Property in the charming harbours tend to be the most expensive – but you get a climate similar to that of Provence at a lower cost.
Though property appreciation has started to cool in France, there are still pockets where prices are rising at above-average rates. In many cases, buying property in France is a lifestyle choice rather than a dispassionate commercial decision and for this reason it is hard to see France declining in popularity with UK property buyers.
- Population: 60,876,136
- Capital: Paris
- Languages: French
- Area (km2): 547,030
- Currency: euro
- Exchange rate: £1 = €1.25
- Dialling Code: +33
- Emergency services: 112
- Embassy in UK: http://www.ambafrance-uk.org
The French health service is excellent. Waiting lists are short, doctor numbers are high, and a survey conducted in 2000 by the World Health Organisation ranked the French health service number one in the world. Every treatment has a fee, but patients contributing to social security through their wages can reclaim up to 70% of this cost.
As our closest continental neighbour, getting to France couldn’t be easier. Take your pick from a great selection of cheap flights, or opt for one of the many ferry crossings available. There’s also the Eurostar, which, depending on where you buy, will get you at least some of the way
Buying Property in France - Top Tip
French inheritance law can be a very complicated beast, so make sure you set out an inheritance provision in the initial contract before completing on the property. It could save whoever the house passes on to thousands of pounds in the future
Some information contained within this buying guide may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.