If you have been dreaming about buying an apartment or house in France but have hesitated, thinking that it must be too difficult for a foreigner, it is time to think again. The process of buying property in France is a lot easier than most people believe. Here are a few basic factors that you should consider if you are indeed interested in acquiring real estate in France.
1. It is no harder to buy a property in France than in the USA
Despite popular images of a complicated Napoleonic legal code, modern French property laws make it easy for anyone, even a foreigner, to buy property. Thanks to the Notaire system, government regulation of closing costs and the reliability of sales deeds, the process of buying property in France can be less nerve-wracking than transactions in other countries.
2. The Notaire System is a key factor in all French property transactions
A Notaire is the French lawyer, trained specifically in French real property law, who prepares the compromis de vente (purchase agreement) and all other documents, including the final sales deed, relating to the transfer of real property in France. Without exception, all buying and selling of property in France must be done under the auspices of a Notaire. The Notaire system is the main reason that real estate transactions generally go so smoothly in France.
3. You don’t have to speak French to buy a property
France has changed a lot in the past thirty years. Gone are the days when you would have trouble finding someone in France who would even say a word to you in English. France has moved on from this parochial attitude, and the change is especially visible in the field of real estate.
A competent property acquisition company can provide bilingual staff to help you with the purchase of a property in France. On the buyer’s behalf the company can also engage a Notaire who is fluent in English and experienced with purchases made by overseas buyers.
Of course it is great to learn French to enhance your long-term enjoyment of France, but you don’t have to do it immediately.
4. You need to open a bank account in France in order to buy property
To purchase a property you must have an account with a French bank, optimally with a bank that can accept and convert currency from other countries. The account should be a normal checking account so that you can arrange for automatic withdrawals to pay recurring charges like utility bills and mortgage payments.
It is not difficult to open a French bank account. The whole process takes only a few minutes. The account may be opened by presenting proof of identity (generally a passport will do), and signing a few documents, including a signature card.
5. You can get a mortgage in France
If you require a mortgage you can get one from a French bank. A good property acquisition company can suggest qualified lenders who are accustomed to working with foreign buyers.
As French law requires life insurance on the loan so that the lender is paid in case of the borrower’s death, older buyers may have to meet certain medical requirements and may have slightly higher payments.
Interest rates are currently around 4-4.5 percent on a fixed-rate loan. This rate includes the cost of life insurance on the loan. For this reason, buyers over the age of 60 will pay a slightly higher rate.
Down payments range from 10 to 50%, but if you are not a French citizen the down payment will generally be at least 20%.
One strategy for financing the purchase of a property in France is to take a second mortgage on a property in your own country and then use the proceeds to pay for your property in France.
6. Property taxes and insurance are no higher than in the United States or United Kingdom
Property taxes in France are generally lower – in some cases considerably so – than those paid by property owners in the United States.
By way of example, annual taxes (including property taxes and a local inhabitant’s tax) on a property valued at EUR 600,000 in Provence in the département of Vaucluse are around 1,400 EUR annually. Taxes will vary according to the local jurisdiction.
Similarly, insurance costs are also reasonable. Take, for example, the cost of a homeowner’s insurance policy on a 300 m2 (3,200 sq. ft.) house in Provence with a pool and contents insured for 40,000 EUR. The annual premium is around 800 EUR. The premium for an apartment of 100 m2 (1,075 sq. ft.) in the 7th arrondissement of Paris with contents insured for 25,000 EUR is 650 EUR.
So, don’t let preconceptions get in the way of acquiring your dream property in France. Find a reliable bilingual property acquisition company to help you, and start looking for the house or apartment that is just right for you.