Buying guide: France

The French dream of sipping sumptuous red wines, endless walks through vine filled country lanes, enjoying a taste of the good life, in a slow paced idyllic setting is what thousands of us Brits crave every year. The choices of locations are endless, from country retreats to city pads, beach side villas to millionaire’s row. Whatever you’re after in your new life this guide can take you that one step closer.

In a country where stress is at the bottom of their priorities you’ll be happy to know that the French property buying process is actually relatively straight forward and hundreds of thousands of foreign investors successfully buy without a problem every year. Of course mishaps can happen but more often then not these issues could have been avoided if the necessary background and research work was done prior to a sell going through. Remember, in France the sale becomes binding much earlier on then in the UK, which means you can happily secure a property and return home to the UK safe in the knowledge the house is yours; ‘Gazumping’ isn’t usually a problem.

France is split into regions and enjoys cool winters with generally mild summers. Most of its market revolves in and around its capital city and tourist regions such as the South West, Mediterranean coast and main ski resorts.

This feature is designed to guide you step by step through the process of buying your home in France, all the information needed from choosing your area to securing the sale can be found in the following sections.

• Country overview
• Property facts
• Buying process
• Area guides

Country overview

Fast facts
Population: 62,150,775 in metropolitan France (July 2008 EST.)
Currency: Euro
Capital city: Paris
Major cities: Marseille, Lyon, Toulouse, Nice, Nantes, Strasbourg, Montpellier, Bordeaux, Lille, Rennes
Languages: French
Climate /Weather: generally cool winters and mild summers
Location: Western Europe, bordering the Bay of Biscay and English Channel, between Belgium and Spain, southeast of the UK; bordering the Mediterranean Sea/Atlantic Ocean, between Italy and Spain
Utility costs: Most French utility costs are state run which means they are among the cheapest in Europe and set up is fairly straight forward.

Generally French power is supplied by EDF.

Water has been privatised and is expensive what ever region you live in. The supplier is Generale des Eaux. Many rural homes have opted for the cheaper septic tank version.

Economy
* Inflation rate (consumer prices): 1.7 percent (2005 EST.)
* GDP (official exchange rate): $2.055 trillion (2005 EST.)
* GDP (purchasing power parity): $1.816 trillion (2005 EST.)
* GDP (real) growth rate: 1.4 percent (2005 EST.)
* Foreign Direct Investment: 19.6 percent of GDP (Investment gross fixed, 2005 EST.)

The French government has featured extensively in the ownership of the economy. They have fully or partially privatized many large companies, banks and insurers. They have also taken stakes in large firms such as Air France, France Telecon, Renault and Thales. However, France is going through a transitional period and even though the government still maintains a strong presence in some sectors such as public transport, power and defence industries, the telecommunications sector is beginning to be opened to competition. France is the most visited country in the world and maintains the third largest income from tourism.

Property facts
* Main Property Markets
* Ownership and Restrictions
* How Safe is my Contract
* Mortgages

Main property markets
The majority of Frances property market is in and around its capital, with the coastal regions coming in a close second.

Forms of ownership/restrictions
Many French properties are owned on a freehold basis. Leaseholds of up to 99 years are available but are less common.

There are many ways in which you can own a property in France, each however, with different tax and legal implications.

A major factor to always consider is the inheritance law as it can have a major impact depending on which purchase route you choose.

Estate agents vs. private vendor
The main ways to buy a property in France are either through an estate agent or via a private vendor- Most foreigners favour the estate agent as you are more likely to deal with an English speaking professional. When looking for estate agents do ensure they are a member of the governing body FNAIM, SNIP or UNPI. The correct certificates should be displayed within the office- Always insist on meeting your realtor at their offices initially to ensure compliance and authenticity. An estate agent will quite often ask you to sign a ‘Bon de Visite’ this will tell the vendor they are acting on your behalf, and avoids any unwanted conflicts between agents.

There are two ways to own a property in France:

* Personal ownership
* Corporate ownership

Personal ownership
Owning a property in one name has no real difference in owning one in a joint venture. The main real benefit is if one of the parties involved has children and the other does not. If the owner dies and has no children or predeceases their partner who has children the property automatically passes to the survivor

Joint ownership
There are two types of joint ownership- Firstly ‘on division’ this means on your death the property will automatically be passed down through French inheritance laws- the beneficiary has the legal right to force a sale leaving the surviving joint owner to leave. Secondly is ‘en tontine’ where 50 percent automatically gets passed to the surviving joint owner on your death.

Timesharing (La MultiPropriete) is the most common form of fractional ownership.

Corporate ownership
SCI (corporate ownership) this is a French company set up to hold property. It is beneficial for those wishing to remain a UK resident and avoid the succession laws. This is because you will own shares in the company as ‘moveable assets’ and these are not liable for French succession laws in the hands of non-French residents. This is well worth considering if you are buying to let, purchasing a large property or for business purposes. Although they can be expensive at set up this purchase structure can be well worth the tax benefits.

Restrictions
There are very few restrictions when it comes to buying a property in France. The law only favours a third party when, for example a residential tenant of an unfurnished premise will have the right to purchase the premises if the owner refuses to renew the rental contract with the intention of selling. On occasions some municipal authorities have a right of pre-emption. There are no other restrictions for non-French buying properties here.

How safe is it?
It is a well known fact that contractual agreements in France are very secure. The French public sector is very competent and professional.

Mortgages
To secure your house in France one of two options are available and they are obtaining a loan from a French provider in Euros or remortgaging your UK property and gaining a loan in Sterling. Checking the current economic climate will help determine which of the two is the financially better option.

The buying process
Traditionally Frenchmen buy their new country retreats by hearing of the sale by word of mouth, they then wander on down to the notaires office and the rest is history. Now I would never suggest that this is by any means a bad way to do business in fact, it works rather well in the rural areas. Estate agents have only really become popular in these regions in the past decades. If you speak French as well as the French do and know property buying in France as well as the French, then this is a great way of getting on the French ladder. The draw backs? You are completely on your own apart from the notaire who will handle the legal issues. This can make the whole experience that little bit harder and, more stressful then it really needs to be. The easiest way is to undeniably use an agent.

* Choosing an area
* Viewings
* Legal representation
* The sale
* Legal matters
* Total costs

Choosing an area
One of the first questions you should ask yourself is why are you buying, is it for purely investment, relocation or a holiday home. This should give you a good idea of what type of property and location you are searching for. Your research should be thorough and visiting a few regions is always advisable. As a general rule, French property is cheaper then that in England, of course with exceptions such as Paris and the Riviera. Other areas are becoming increasingly more expensive as they become more popular with both the French and foreign investors.

Viewings
Once you have selected a few properties off your agents list you will be taken to view them. It has been heard of that agents are fierce and hungry for a sale due to competition for the same property and while this is largely true, they also simply don’t want you to use a different agency for the same house at a lesser cost. That is when the ‘bon de visite’ will come into play, stating that you cannot use anyone else’s services to buy this house.

Legal representation
A notaire (a highly regarded French Lawyer) is generally used to handle the tax and legal issues but acting as an independent person- not acting on behalf of neither the vendor or buyer’s interests. The main role of notaire is to ensure that all taxes are paid and to register the sale with the French land registry. It is advisable to recruit a second notaire (there will be at no extra cost as the standard notaire fee is for all notaires working on the same case). It is advisable that your notaire can speak English and translate the deeds for you. Knowledge in both English and French law would also be very useful. It is fairly uncommon to find a notaire that has this knowledge and therefore many English investors recruit a bilingual English lawyer to handle their interests.

The sale
As with all sales it is vital that both the vendor and buyer are clear about the details, what’s included in the sale and what, if anything will be left in the property etc. This should all be stated clearly in writing. Once a price has been agreed an oral agreement will be made- this is not legally binding.

Once both parties have agreed the terms, a contract will be drawn up; it’s not uncommon for a preliminary contract to be signed first which is non binding. However, once the main contract has been signed- you are committed to buy. There is a 7 day cooling off period. Unlike England where a buyer can pull out without any reason, in France there is moral obligation and the vendor will fully expect you to go through with the sale unless there is extreme circumstances beyond the buyer’s control. So always make sure any unanswered questions are finalised prior to signing. A deposit will also be required at this point.

Legal matters
There is then a period of about 10-12 weeks where any legal searches are conducted including local authority, planning permission and land registry. After this period the remaining monies must be paid to the vendor plus any fees, less the deposit. The final contract is signed by the vendor and buyer in front of the notaire and ownership is passed over.

Taxes
A double taxation agreement exists between both the UK and France which means that you only pay tax in one or the other countries.

*Land tax (Tax Fonciere)
Land Tax is paid on built or on land that will built on. This is paid regardless of whether you are living in France or not. It is charged annually between 28 and 60 percent depending on location.

*Community tax (tax d’habitation)
Community Tax is paid on 1st January for the year in its entirety irrespective of when the owner vacates the property in that year. There is generally no option to pay a percentage of this tax.

Total costs
* Registration fees 4.99 percent – 5.09 percent
* Notarys Fees 1 percent (+19.6 VAT)
* Land Registry Salary 0.10 percent
* Miscellaneous Registry Fees(Stamps) 0.20 percent-1 percent
* Agents Fees 2 percent-5 percent (+19.6 VAT)

Area guide
* Northeast
* Southwest
* Central
* Mediterranean
* North and East

North east
If you don’t fancy a long journey to your new place in France then a hop, skip and jump over the channel and you will have arrived in North West France. This location is ideal if you still wish to commute back to the UK. With regular ferries and of course the Euro star, it has never been so accessible. 

Houses are traditionally brick and colombage (half timbering); however there is an influx in new builds or the option to build your own home is becoming increasingly popular.

Pretty towns such as the quintessentially beautiful 1920s Le Touquet are on your doorstep, although commanding rather high house prices nowadays, however drive inland and equally beautiful rural villages can be found boasting houses at a fraction of the cost of its coastal neighbour.

Journey south and into the vibrant city of Lille- with its Euro-star connections and its own airport- this metropolis really is a fabulous city choice.

Picardie, with its WW1 battlegrounds, churches, abbeys and access right on to the A16 which powers you straight into Paris is a popular choice with neighbouring Europeans.

We continue east and into the champagne-Ardenne region famous for its champagne, medieval castles and breathtakingly beautiful scenery.

Other cities and towns: Colmar, Strasbourg, Metz, Nancy, Epinal, Troyes, Arras, Lille, Amiens, Beauvais, Laon, Bar-le-Duc, Chaumont, Châlons-sur-Marne.

South west
The South west of France spans outwards from Toulouse, the regions largest city towards the Massif Central and the Pyrenees. The dramatic beauty of the snow capped mountains contrasted with the vineyards of Bordeaux, supplemented by the wild Atlantic coast only to be tamed by the turquoise blue seas of the Mediterranean; this region certainly has it all on offer.

Other cities and towns: Lourdes, Bordeaux, Pau, Arcachon, Perpignon

Central
The heart of France is fairly untouched by tourists and therefore if you choose to buy in this area you will be buying into a true piece of unspoilt rural France. The continental climate usually means very warm springs, summers and autumns. The laid back pace of life, extremely friendly faces and nestled away from the crowd’s makes central France an ideal candidate to take life back to basics.

Other cities and towns: Indre, Creuse, Allier and Cher.

Regions: Centre-Loire, Limousin and Auvergne

Mediterranean
The south with its balmy summers and moderate winters plays host to some of the most expensive property in France. It’s a playground for a chic and jet set crowd- Cannes and St Tropez leading the glitterati, with Nice a little bit more moderately priced.

Not forgetting the Alps; A winter wonderland for those who love the alpine. Gone are the days of shabby chic, replaced by cosy chalets and 5 * hotels nestled into the mountains. Log warmed cabins and après ski are never far away.

Other cities and Towns: Marseille, Cannes, Nice, St Raphael, Montpellier

North and east
France’s north eastern section again is an ideal choice if you don’t want to travel too far from your UK base- with ferries regularly arriving into Le Harve you can be at your new home with 24 hours. The weather in Normandy and Brittany is some what warmer then that of the south of England.

Other cities and Towns: Le Harve, Caen, Cherbourg, Brets, St Malo, Dieppe