France’s property market has a long history of attracting foreign investors, particularly the British, who like the relaxed lifestyle and beautiful, varied landscape that the country offers. Fortunately, France’s real estate market and its property-purchasing process are well regulated and fairly easy to navigate, although regulations for non-citizens can be strict.
There are plenty of houses for sale in France at present, across a broad range of prices and regions. There are a few key things to be aware of, however, when buying a home in a foreign country, and specific things you should know when buying a home or purchasing property in France. Taking the time to research all the variables that go into buying a home overseas can save you time and money in the long run.
What is the Property Market Like in France?
In the wake of the Covid-19 pandemic, house prices rose in France as an increasing number of people moved out of cities and into provincial towns in the countryside, reducing housing supply in a number of regions. However, this growth began to slow down in 2022 and according to the French real estate union, the Fédération Nationale de l’Immobilier (FNAIM), properties are predicted to decline by an average of 5% in 2023.
Knowing the market you are interested in is important to making the best real estate investment decision to match your needs. You can check a country’s foreign property ownership laws at www.icrea.org, the International Consortium of Real Estate Association’s website. You can also visit the UK government or US state department’s website for more information on a country’s safety and stability.
For UK nationals wondering if they can still move to France after Brexit, the answer is yes. However, as with other non-EU citizens, you will need to apply for a long-stay visitor visa if you wish to stay in the country for a period longer than 90 days, which will require you to provide proof of income, have a valid passport and take out travel insurance, amongst other things. For more information, you should head to France-Visas, France’s official website for making applications, or speak to your local French consulate.
Define Your Goals
Deciding why you want to buy in France may sound obvious, but it could change the type of property you choose and the way you purchase it. Do you want a permanent home to live in immediately, a holiday home, a rental property that can supply steady cash flow, a fixer-upper or a future home for retirement? Your investment objective will help you determine other things as well – your price range, deposit amount, location and the property’s condition.
Once you have identified your investment objective, your next step is to start to identify the expenses that will come with that type of property purchase. For example, if you want to buy a fixer-upper, you need a clear understanding of the expenses for both the purchase and renovations. Expenses for renovations could include manual labour costs; supplies; permits you may need to apply and pay for; and even travel expenses if you plan to spend time travelling back and forth between your home country.
Consider the following factors during your property search: location and neighbourhood, quality of life metrics, safety, access to public transportation, schools, community resources and future development or government investment in the area. This isn’t meant to be a comprehensive list, but it’s a good starting point.
How to Buy Property in France
There are a number of ways to buy property in France, but the three most common purchase types are through a private, owner-to-owner sale; by buying off-plan; or by property auction. Most homes are bought through private sale or a buying-off plan. In a buying-off plan, the buyer purchases a property (not the land) from a developer that has yet to be built.
Property auctions are not widespread in France, and the country’s real estate market has strictly enforced regulations, as noted previously. Due to these strict regulations, which govern the purchase of real estate and land for both citizens and non-citizens, obtaining the services of specific professionals is required for real estate purchases.
Therefore, knowing who you will need to work with throughout the buying process is important. If you plan to buy through a private sale, you will want to engage the services of a notaire (public notary) or an immobilier (estate agent).
Finding a Real Estate Agent in France
Often, foreign investors use an estate agent, and working with one can make the process simpler. Many French estate agents are registered with French organisations such as FNAIM, the Union Nationale de la Propriété Immobilière and Syndicat National des Professionnels Immobilier.
These organisations ensure that French estate agents operate ethically and within the legal guidelines for French property purchases. Estate agents who are registered with any of these organisations typically disclose their registration upfront and abide by certain ethics and behaviour.
For example, it is common for estate agents to request that clients sign a confirmation called a ‘Bon de visite’ when showing a property. This can help alleviate any potential conflicts between different agents showing properties. The estate agent is also responsible for providing information on estimated fees and property charges, and carries professional insurance, which can help protect you if anything goes wrong with the transaction.
Preparing Legal Documents
You may also choose to work with a notaire (sometimes called the maître). The notaire is responsible for preparing all property documents, including the Compromis de vente (the sales contract). The notaire is responsible for confirming the seller’s title and ensuring there are no existing mortgages on the property, and the notaire also typically provides a financial guarantee to their client through indemnity assurance.
It is standard for the Compromis de vente to be written in French, though you can request an English translation. You can ask the estate agent or notaire for an independent translator recommendation. It’s always a good idea to have all documents professionally translated so that you know exactly what you’re reading and signing.
How to Transfer Money Overseas
Contacting a money transfer provider early in the process to find out your options for transferring money overseas to pay for your purchase is a good move. Sending money abroad always has risks, including the risk of currency fluctuations and many money transfer providers have ways they can help you reduce these risks. Strategies such as forward contracts, limit orders and hedging can help you manage foreign exchange currency risks.
Brokers can also help you to determine if it is financially beneficial to pay in your home currency or in euros. For more info about how FX can impact your French property purchase, take a look at our overseas property buying checklist or visit our historic exchange rates page for a big picture view of current currency market trends.
Research Financing Options
Property purchases in France can come with additional fees, such as estate agent fees (which typically range anywhere from 4-10% of the property purchasing price), notaire fees and other fees, depending on the type of property being purchased.
You will also be responsible for paying a VAT of 19.6%, so begin identifying all potential costs for your purchase, as well as researching your options for payment at the earliest opportunity.
Please keep in mind that having to finance a home purchase from overseas can add another layer of complication to an already complicated process. Although all-cash purchases are becoming more popular with foreign investors, there can be drawbacks to this approach.
During 2022, the French government introduced a new law that restricts new mortgage loans to a maximum of 25 years and the amount that can be borrowed (including for fees and insurance) to be capped at 35% of the borrower’s income. It’s important to bear this in mind if you are thinking of applying for a mortgage in the country.
In some cases, there may be special tax filing requirements or withholding taxes if/when you decide to sell the property. It’s a good idea to engage the services of an attorney who can offer guidance in this situation.
Use a Money Transfer Provider
Allow yourself enough time to research options and find a solution that works for you. Sometimes it takes just a quick search on a transfer service provider site to find FX brokers offering better foreign exchange rates and lower fees than you would find at a bank.
In addition, a foreign exchange broker can also provide a cost-effective way to send regular overseas payments. Foreign exchange brokers are experts in transferring money abroad and offer their clients:
- Far better exchange rates than you would get from a bank
- No fees or commission
- Security against exchange rate fluctuation (talk to providers about fixing a future exchange rate)
- Hedging your currency exposure
- Fast international payments
- A dedicated account manager tailored to your needs
Compare rates for pounds to euros now to see the difference and savings. Refer to the overseas property buying checklist to save on your overseas property.
Manage Expenses
Factoring in all costs associated with your property purchase, along with other, ongoing expenses (such as mortgage payments or monthly dues), will help you better manage your expenses.
For monthly payments, such as a monthly mortgage payment, it’s easy to set up a recurring payment plan with a money transfer provider, which can make the process much easier to manage, as well as saving you costly monthly bank wire transfer fees. It is important to shop around and compare different providers to find the best broker for your needs.
Learn More about Sending Money to France
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