Buying Guide Details

Buying Property in France

Overview

Low-cost flights, ferries, the Channel Tunnel and an extensive road and rail network have opened up many parts to visitors and buyers of property in France
Countryside, coast, mountains and cities – there’s a massive choice of property for sale in France
There are many parts of France with very cheap properties
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 property in France is expensive, don't think that it can’t make a great investment

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 French Riviera, property buyers from the UK have had a penchant for buying property in France 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.

Avenue Champs Elysees at night, Paris France

Property Market in France

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 homes 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 home 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.

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Summary

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 a 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 home buyers.

French Property Hotspots

Bergerac – this corner of the Dordogne has a fantastic climate and scenery, as well as a significant expat population. Though property is not cheap, it offers an idyllic lifestyle and the tourist trade provides lots of potential tenants
Cote d’Azur – one of the most popular tourist spots in the whole of France, the resorts of the French Riviera speak of glamour and opulence – but you don’t have to be a millionaire to find a home on this Mediterranean coast
Normandy – just a short hop over the English Channel, UK and Irish buyers have long been fans of the unspoilt countryside and varied coastline of this northern region. There’s a wealth of inexpensive property to renovate too
Paris (North/Central) – the 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
Brittany – a 600-kilometre coastline, bustling ports, quiet hamlets and charming market towns: there is a huge range of reasonably priced property and a pleasant climate in a region that is just on the doorstep of the UK and Ireland
Biarritz – the most fashionable beach resort along the coast of southwestern France, a world-renowned watersports destination and ideally placed for the rural splendour of the Basque country and the Pyrenees
Grenoble – the venue for the 1968 Winter Olympics is a busy commercial and university town as well as being well-connected to the rest of France and perfectly situated to reach many ski resorts in the Alps.

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Property Buying Process

Once the buyer has found a property and made an offer, both parties must sign a compromis; 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 then 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 notary’s account. Failure to do this on time could mean the 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.

Homes Overseas Property Club
Homes Overseas has joined forces with a collection of IFA specialists to form the Homes Overseas Property Club (HOPC), designed for existing and prospective overseas property homeowners.

The Club – which has access to international lawyers in no fewer than 43 different countries - has been set up in order to guide people through some of the various issues relating to buying and maintaining a property overseas. It offers advice on a range of topics, including financial, legal, insurance, taxation, property management and foreign currency matters.

For further information please telephone 0845 838 7142 or email info@homesoverseaspropertyclub.com

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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For more information on buying property in the different regions of France, please select from the following list: