Buying 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 for sale 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.

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 properties 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 property 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.

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 property buyers.

The Process of Buying Property in France

- Once the buyer has found a property in France 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 property 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 in France 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 in France 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.

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 in France 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 property in France 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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