Many people dream of retiring to France and living out their golden years in the sun, however investing in a property in the nation can be a daunting prospect for many, especially when you don’t know where to begin.
For those toying with the possibility of making the plunge, here are three things that everyone should know before thinking about buying a house in France.
Many people thinking of moving to France romanticise a life in the countryside, with the notion of maybe picking up an old or ruined property and then doing it up and converting it into a quaint rural retreat.
While on paper this may sound wonderful, in reality it can become something of a nightmare if you haven’t properly researched and prepared for all the work and lifestyle changes such a project can require.
France has hundreds of old farms, chateaus and rural houses in various states of disrepair thanks to the massive population shift to urban areas in the 19th and 20th centuries, and you may find that you can snap one for what seems like a bargain.
Be wary however as the country is littered with half-finished restoration projects that started out with the best intentions but were abandoned as buyers underestimated the work involved, with issues such as a shortage of funds and difficulty finding reliable contractors in a country which doesn’t speak your native tongue being serious stumbling blocks to overcome.
You should also be wary of using expat builders to try and skirt the language issue, if they aren’t fully trained and registered you can fined for hiring a professional for services they are not qualified to do.
Many older properties are also not connected to France’s sewerage system and you will need to make sure that a septic tank is installed and working correctly, something that can come with its own set of hurdles.
It’s also worth noting that in some rural locations you may find that your internet connection is slow or even non-existent, although you may be able to have a satellite connection installed to get around this.
Just like purchasing a property in the UK (or anywhere else in the world) purchasing a property in France requires conducting a lot of various checks and jumping through a number of legal hoops.
When preparing to sign any legal documents in another country it is well worth hiring a reliable local solicitor even if you are fluent in the language. Legal terms can be difficult enough to understand when in English let alone a second language, and many terms or policies may simply not translate.
The UK government keeps a handy list of English speaking lawyers in France and other French oversea territories which you can check out here.
While the French government has been tightening up its law regarding survey requirements over the last few years, you will still likely want to hire your own reliable surveyor to make sure that the property is up to code as there are still some concerns about the control and professional competence of some of those hired to survey properties by unscrupulous estate agents and sellers.
Likewise, while the seller will provide a notaire (notary) for the transaction, it is worth hiring your own just to make sure that you are not at a disadvantage in negotiations.
Also be sure to take into account France’s inheritance laws as these could have an impact in the event of your passing. It would be worth seeking expert advice on getting a couples en Tontine (a French marriage contract) in order to ensure that your spouse is not caught out by France’s historical inheritance laws or liable to pay tax on the inheritance of the property.
Remember, once you sign the Compromis de Vente (Sale Agreement) you are given a 10 day ‘cooling off’ period after which the sale is then final and you will no longer be able to back out of the deal without forfeiting your deposit.
On the financial end of things, be sure to pay attention to the various taxes you may be required to pay, such as foreign income tax and annual wealth tax if your property is over a certain value.
You will also need to ensure that you have easy access to at least 10% of the asking price so that you are ready to put down a deposit if negotiations between yourself and the buyer proceed.
You will also be required to pay the legal fees and registration taxes which generally amount to around 7.5% of the sale price. These fees must be paid to the notaire when you sign the final contract and are paid together with the final transfer payment.
Opening a bank account in France is also a good idea. While not absolutely essential, you may find that you run into difficulties paying bills and making mortgage payments without one.
Many banks in France now offer services for foreign nationals with English speaking staff available to help you set up your account and facilitate transactions.
Of course there are many other things to consider when buying a house in France and it is advisable that you thoroughly research every aspect of the process before leaping in feet first.
However, to help make the purchase a little easier (and a lot more cost effective) you may want to consider using a reputable currency broker to transfer the money you need to fund it.
While your first thought may be to use your bank, the more competitive exchange rates brokers are able to offer could save you thousands. You’d also avoid the fees that are often tacked on by banks and have access to a range of transfer services that can be tailored to suit individual requirements.
If you’re considering purchasing property in France in the near future, find out more about your currency transfer options.
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