Real estate property investment in France

While it is not possible to give an absolute indication of the price levels in each region, the most expensive properties are found along the Cote d’Azur – with beach properties in thriving coastal cities offering spectacular scenery and nightlife. Those with a budget at the lower end of the spectrum may find it worth looking in the Normandy region.

Important Things To Consider When Investing In French Real Estate

One of the fascinating differences with property purchase is that different countries have different rules and regulations on all aspects of the property transaction lifespan. For example, in the UK a verbal offer to purchase a contract is not binding. In france, it is and this is one fact to be aware of while considering an offer on a French property.

Here are some more important considerations that you should consider prior to purchasing a property in France:

· As with purchasing property in any region where the language is not your own it is important to hire a bilingual lawyer to ensure that the contract appears to be legitimate and in accordance with your requirements.

· Estate agents in France are known as “agent immobilier” and most will have a professional licence to practice.

· One way of ensuring that you are dealing with a legitimate agency is by seeing if they are members of the FNAIM (Federation Nationale des Agents Immobiliers et Mandataries) as well as the SNPI (Syndicat Nationales des Professionnels Immobilier).

· The “compromis de vente” is a preliminary contract – it effectively ties in both parties to the property transaction.

· In some countries, the seller of the property is bound to disclose any major problems in the details of sale. However, this provision does not exist in france hence it is particularly important to ensure that the property is thoroughly inspected for any defects.

· It’s advisable to carry out a survey on any potential property purchase. There are two types of surveys broadly available – one is the expertise and the other is the bilan de sante (which is a more detailed structural survey).

· Property investors looking for guaranteed yields may well benefit from the leaseback scheme. Here, the investor would purchase a suitable leaseback approved property and get a certain guaranteed rental income (ordinarily between 5% to 6%) for a minimum number of years (ordinarily nine). This is a good way of investing in a property and enjoying longer term capital growth while cutting the risks in not being able to get in rental income over the period.

· In France, it is a legal requirement to have home insurance in place. Non residents have to be a little wary as some insurance policies will only provider cover up to a certain time for holiday homes. It is therefore vital to ensure in advance that any police covers your requirements adequately.

The level of healthcare that is provided in France depends a lot on your status as a citizen. Those contributing through standard income taxes get access to healthcare that is subsidised (to the tune of 65% to 80% depending on what is being treated).

Mortgage Information In France

While it is not impossible to get a 100% mortgage in France most lenders stop at the 80% mark. Here are some things to remember when shopping for your French mortgage:

· There tends to be a lower limit for loan values (it may vary but the ballpark figure is approximately $30,000.

· Repayment deals tend to be the norm, however interest only is also an option.

· Most mortgage terms are either for 15 or 25 years.

There are debt provisions in France that are in place to prevent lenders from issuing more debt than can be comfortably serviced by the borrower.

Property Related Taxes In France

As always, a legal tax expert can show you how to plan your activities in a tax efficient way. The following are some of the main taxes that relate to French properties:

· “taxe d’habitation” is a tax that is paid by anyone occupying a property. However, it is usually paid by the person that lives in the property rather than the actual property owner.

· “taxe fonciere” is the tax that is payable on a property itself regardless of occupancy (i.e. it is payable even if the property is empty). Some provisions may be made for properties being refurbished, or those that have elderly relatives in them.

· France has a “wealth tax” that is levied on extremely high valued properties. Very few properties would actually qualify for this tax.

· Income tax is payable on all second homes in France (even by non residents).

· Other forms of taxes that need to be considered are capital gains tax, inheritance tax and gift tax.

Useful Contact Groups For Buying French Real Estate

Estate Agents & Other Contacts

www.snpi.comn SNPI (Syndicat Nationals des Professionnels Immobilier)

www.architectes.org CNOA (Counseil National de l’Ordre des Architectes)

www.experts-fnaim.org FNAIM (Chambre des Experts Immobilliers)

Other Useful Sites