Buying in France


France has a lot to offer in terms of overseas investment:

  • The world’s most visited country- tourism generates the 3rd largest income globally
  • The 5th largest economy in the world
  • One of the most stable economies in the world
  • The 3rd largest host country for international investment
  • The 3rd most productive workforce
  • 7th largest by purchasing power parity in the world
  • France is the 6th largest exporter
  • 4th Largest importer of manufactured goods(according to the World Trade Organisation
  • It is highly accessible from Europe both by air and sea
  • Lending rates are low

France is politically very stable. It is one of the five permanent members of the UN Security Council and a prominent player in the EU.


The French economy has weathered the recession with its usual steadiness. No major highs no major lows. The construction industry is heavily regulated.

 

How do you go about buying a property in France?


Sales Process:

  • Stage 1: Buy today – Pay your 2%-5% deposit purchase price Sign the Reservation Contract. You can cancel within 7 days
  • Stage 2: Up to 85% Mortgage Arranged – can take up to 6 weeks. Tracker, variable and fixed rate mortgages are available
  • Stage 3: Three to nine months later – Sign Final Notaire Phased payments begin until house is complete
  • Stage 4: One year usually – Sale complete
  • Stage 5: Rental income commences – paid quarterly or annually in arrears

The Mortgage Process

 

The French Banks will lend for:

  • Classic Purchase
  • Leaseback
  • Buy to Let
  • Equity release & refinancing mortgages

Before we set out with any client who wishes to purchase in France we establish what is the likelihood of being approved for a mortgage together with how much are we going to be able to secure. This way none of our clients are disappointed and no-one’s time is wasted. So a pre-approval form is complete which will assess the client’s financial situation.

 

When you have selected the property you wish to purchase we will provide you with detailed costs outlining costs and fees and cashflow projections. We will also advise you of the loan amount,rate and term approved.

 

WE will then arrange Life insurance, open a French Bank account and arrange for a direct debit.

 

The property is owned by the client when the final contracts are signed.

 

The costs involved:

  • The Notaire’s fee is approximately 3% for new developments and 7-9% for refurbished properties. This includes stamp duties and all registration fees
  • The mortgage registration fee is approximately 1.5% of the amount borrowed
  • The bank charge a fee for arranging the mortgage, usually €1,000 - €1,500
  • Mortgage broker fee €595 upwards depending on the value of the property

Annual taxes and charges:

  • Land tax is payable every year based on the square meterage of the property 10/15 Euros/sqm/year. One is exempt of this for the first two years in the case of heavy renovation and new buildings
  • Life assurance will cost you approximately €30/€40 per month
  • You will need to employ an accountant to do your returns annually which will cost approximate €300 per annum
  • You may also wish to make a French will which will cost approx €400
  • When buying in France the power of attorney is stamped by the registered public Notary in Ireland and returned to the Notaire in France

 

Some Basic Tax Points:

  • Income Tax is payable but usually interest on the mortgage cancels out Rental Income.
  • In addition to being able to offset your french mortgage interest against your rental income you can also offset the following expenses:
    • Notary fees – currently 3%-9% depending on the property
    • Accountants fees
    • Depreciation on the property and the furniture
    • One trip to France per year to check your property
  • Capital Gains Tax – The Property may be sold free of capital gains tax after 15 years. If sold before the end of this period, the gain will be taxed at up to 16%. However, the level of gain is reduced on a pro rata basis by 10% from year 5-15. You should discuss this with a tax advisor
  • Inheritance tax you will need to discuss with your tax advisor
  • Property is owned by the client when the final contracts are signed, but they only have full ownership when the lease agreement ends. If you sell the property before the agreement ends the new owner must honour the agreement

Buying Through Your Pension

 

If you have a current pension or are about to start this could be a choice for you. Why? The benefits are:

  • You can choose your investment
  • Tax relief on funds used
  • Investment grows free of CGT Rental Income
  • Mortgage still available in France
  • French property market proven more resilient

Who is eligible?

  • Company Director/Professionals/Self Employed/Self Administered/Self Directed
  • ARF/AMRF’s/Defined Benefit/PRSA

How does it work?

 

At the moment you will have your pension with one of the Pension Trustee companies. You can invest from €30,000 upwards.

 

The Languedoc, where French Prestige Investments sell a considerable number of properties, is poised for growth. Property buyers from all over Europe, North & South America, China, Norway, Sweden, Belgium, Holland Australia and Africa are descending on this region of France looking for excellent property investments.

 

People buying new build properties in Languedoc’s many new property developments are investing in more than bricks and mortar. They’re investing in a way of life – the chance to buy property in Languedoc, the “new” South of France, an unspoilt French region that is a world away from the over-built-up nouveau-riche of the Cote d’Azur and Provence.

 

The Languedoc was named as one of the best destinations for 2009 – the Lonely Planet’s annual list of emerging destinations. The authors of the influential guide book series cited:

 

”The Cinderella of the south was once overshadowed by gorgeous Provence and the brash Cote d'Azur. Now, she stands as their equal, displaying a discreet charm that her more-visited siblings lost long ago.”

 

The region is the fourth most important tourist destination in France(after Paris, Cote d’Azur and the Alps) and tourism is the most important economic activity with over 100 million bed nights annually. Tourism at the upper end of the market and particularly from outside of France is growing rapidly. However the region suffers from a lack of quality accommodation to service this market, and as such demand for quality accommodation is high.

 

Languedoc-Roussillon, despite the many property developments popping up all over the region, is still relatively wild and under-populated, with huge expanses of beautiful vineyards and garrigue(shrub) stretching from the from Mediterranean beaches to the mountains of the Pyrenees and Cévennes The food is excellent and the region now produces some of France’s best wines. So property development investments here allow buyers to experience the south of France as it used to be, without having to pay bloated Provençal prices.

 

New builds investments in the Languedoc offer many advantages over those in other areas of France and Europe.

  • France, and especially the South of France has a cache that continues to make property there popular with wealthy buyers
  • The French government’s adroit handling of urban development (unlike Spain where development goes largely unchecked, ruining traditional villages and scarring the coast means that property developments in the Languedoc won’t one day lose their value due to over-building or the erosion of local culture
  • The French governments tight control over what is built. Property developments in the Languedoc are better built and more interesting architecturally
  • The Languedoc region is booming, with more people moving to it than any other region in France. Property values, which are still low compared to Provence, are rising faster than any other French region
  • Excellent roads: the A9 costal motorway is about to double in width, and the new A75 motorway means there are now three major outs
  • More flights Carcassonne, Béziers, Toulouse
  • Improved train links
  • Larger beaches than the Cote d’Azur
  • Easy to rent property