How to buy property in France
France’s property purchase process is protected by strict but straightforward real estate laws, making it an attractive country to buy a home in. These laws include instructing a notary – this role guards the interests of both parties and ensures laws are upheld. Buyers can appoint their preferred representative – notaries may then undertake relevant searches or highlight any liens.
An offer letter, or offre d’intention d’achat, confirms the price and timeline for the transaction to take place. Once everything is agreed, a purchase contract, or compromis de vente, typically sets a three-month period for checks to be made before completion. This document is usually accompanied by a 10% deposit, held in escrow. Once both parties sign it, there is a 10-day cooling-off period where the buyer can withdraw without penalty.
Completion takes place at the notary’s office, where the purchase balance, fees and taxes are paid.
Financing your property in France
When looking to buy a property in France, it helps to have an Accord de Principe – an agreement that sets out how much you are able to borrow from a lender. This can have a significant bearing on the acceptance of an offer and puts you in a strong position as a prospective buyer.
Some sellers won’t accept a mortgage clause within the compromis de vente. In this scenario, speaking to a mortgage broker like Traverse International Finance, our chosen partner for mortgages in France, early on means they can include a mortgage clause within the compromis de vente.
In some instances, it’s possible to borrow up to 100% of the property purchase price using a combination of a mortgage and a Lombard loan. Get in touch with Traverse to discuss the financing options available to you.
Taxes and ownership
Property purchase fees are roughly 7.5% of the purchase price, although some fees and costs can vary slightly.
The French wealth tax starts at 0.5% for properties between €800,000 and €1.3 million, rising progressively to 1.5% for property over €10 million.
Capital gains taxes also decrease with length of ownership, so it’s recommended to seek advice on the best way to structure your property purchase.
For more information on property in France, please contact us.