Homes & Relocation Detail
Buying a French property
Whether you are dreaming of owning a rural retreat, or a city pad in France, the financial side to buying a property in France can be a maze - especially if you don't speak the language
Deciding on legal advice
Once you have thought about buying a property in France you should seriously consider consulting a lawyer. You will need to discuss; who should own the property bearing in mind French inheritance rules, financing your property, and tax and investment issues. You should employ a UK lawyer who specialises in dealing with France, and French notaries who specialise in dealing with British property-buyers. The notaire is a lawyer who represents both parties in a property transaction. His or her main function is to draft legal documents and register the property transaction.
Negotiating the price
When buying a property in France it usually pays to haggle over the price, even if you already think it's a bargain. Don't be put off by a high asking price as most sellers are willing to negotiate. If you make a low offer it's wise to indicate to the owner a few negative points that merit a reduction in price. If a property has been realistically priced, you shouldn't expect to obtain more than a 5 or 10 per cent reduction.
Surveyors report
Unless you are going to demolish your building and completely rebuild it, a survey is worth paying for. Costs vary depending on the size and complexity of the house and the depth of the report, but expect to pay £200–£500 for a basic report and up to as much as £500–£1,500 for a more complex report. And unless you speak fluent French, you will need to pay to have the report translated.Translation costs about £60–£100 per thousand words. There are a number of UK-based surveyors living in France who may be worth considering. Prices are generally more expensive then a French report, but it will be in English and so will therefore avoid translation costs.
Mortgages
Mortgages are available from all major French banks (even for non-residents) or from a British bank that does business in France. The basic concept of a mortgage is the same as in the UK, although French mortgages are usually created on a repayment basis. The loan and the interest on it are both gradually repaid by equal instalments over the period of the mortgage.
Preliminary contracts
The first stage of buying a property in France is the signing of a preliminary contract. There are a number of different types of contract depending on whether you're buying an existing property or an off-plan property.
Deposit
When you sign the preliminary contract, you must pay a reservation fee or deposit (acompte/dépot). This is usually 5 per cent when buying a property in France off-plan and 10 per cent for an existing property. The safest and fastest way of making a deposit is usually to make a bank-to-bank transfer from your bank to the notaire's or estate agent's bank account. If the deposit is described as a dédit, the buyer will lose their deposit if they withdraw; similarly, if the vendor pulls out, he must pay a penalty equal to the amount of the deposit. If the deposit is described as acompte, neither party can withdraw and the sale can be legally enforced. The deposit is sometimes refundable under strict conditions.
Completion
Upon completion all the necessary documents will be returned to the notaire. They will contact the buyer and request the balance of the purchase price minus the deposit. They will also send you a bill for their fees and all taxes, which must be paid on completion.
Currency and paying for your property
The balance of the price must be paid on completion. The money can be transferred directly to the notaire's bank account via a bank transfer, or you can pay by bankers draft. If the vendor and buyer are of the same nationality they can agree that the balance is paid in a currency other then euros.
Banking and insurance
When permanently residing in France you will need to open a bank account in order to service your mortgage repayments. You can open a current account with a French bank and it is wise to chose one local to your French property. Life insurance is a must to secure a mortgage. Like in the UK you will also need to insure the property and your personal belongings.
And finally
The above is a brief summary of the procedure involved in buying a property in France. It is designed for information purposes only and should not be taken as financial advice. You are strongly advised to obtain independent financial advice prior to entering into any contract.
Search for properties in France