Cheaper and faster traveling, cheap finance, underperforming pensions and a volatile stockmarket make buying a property abroad an attractive proposition. But buying abroad is VERY DIFFERENT from buying one in the UK and also varies considerably from country to country. So, whatever you do, NEVER buy or sign anything on impulse and ALWAYS use a solicitor. Also, some of the biggest mistakes are made because of language misunderstandings, so it’s a very good idea to use an interpreter.
DO YOUR HOMEWORK
Before you even start to look for a property, you need the answers to some important questions –
- Why are you buying a property abroad? Will it just be a holiday home you use 2 or 3 times a year and let it out for the rest of the time?
- Do you intend to live there for a significant part of the year or do you intend to move there permanently?
- How much can you afford to spend without stretching your finances too much? Will you be getting a mortgage or paying cash?
- If you intend to let it out, will you be finding tenants/collecting rents/organising repairs yourself or will you be getting a Managing Agent to look after everything for you?
- Do you want a new or existing property?
- Do you want to be on a community development?
The answers to these questions will have a big influence on the type, size and location of suitable properties. For example, if you will be letting the property, it needs to be in a tourist area and close to shops, restaurants, bars etc but if you intend to live or retire there, you’ll want to be away from these areas but still close to amenities, shops etc. Also, remember that it does rain in France and it can also get quite chilly, but not all properties are suitable for year round living because they may have inadequate heating and insulation, so choose carefully.
THE BUYING PROCESS
The law relating to property purchase depends, to some extent, on the type of property you intend to buy. The details below apply to a property up to 1 hectare. If the area is greater than 1ha, then the Societe d’Amenagement Foncier et d’Establissement Rural (SAFER) may intervene in order to preserve land that it feels should continue or remain in agricultural use. When you find a property you want to buy, an agreement is negotiated between buyer and seller and the initial contract – (‘Sous-seing Prive’ if drawn up by an Estate Agent or ‘Compromis de Vente’ if prepared by the Notaire) is signed by both parties. The buyer pays a deposit (minimum 10%) which remains in a special account at the Notaires office until completion takes place or the purchase is aborted. Once the ‘Compromis’ or ‘Sous-seing Prive’ has been signed, there is then a period of between 6-8 weeks in which the searches are carried out to ensure that the property is not subject to any environmental changes and during which time the purchaser must sort out the financing arrangements. The searches and other contractual matters are dealt with by the Notaire who is a public official answerable to the State. His job is to ensure that the purchase is undertaken legally, accurately and in full accordance with the law. It is, therefore, unnecessary for you to use a second Notaire, although you may wish to use a Lawyer to explain the procedures and offer advise if required. If you are getting a mortgage, this must be declared at the time of the agreement and a clause put in the ‘Compromis’ to protect you in case a loan is not granted. If this happens, the deposit is returned. The deposit is also returned if a ‘planned nuisance’ is discovered by the searches or the seller breaks the contract. If, however, you break the contract, then the deposit is paid to the seller. At the end of the 6-8 weeks, the ‘final contract’ (Acte de Vente) is signed at the Notaires office and the property passes to you on payment of the balance of the purchase monies. This money must be in the Notaires possession before the contract is signed. Also before completion, copies of your birth certificate and, if applicable, your marriage certificate (both in French) must be provided. As soon as the contract is signed, you are responsible for the insurance of all buildings. French ‘succession’ laws are very complex and do not allow you to leave your property to just anyone you want, even if you already have a Will, so take advice.
The buyer pays the legal fees and registration taxes (approx 7.5% of the purchase price). The seller pays the Agency commission. Also, don’t forget that there will be living costs as in the UK. These could include Local rates, Property tax, Insurances, Water and Electricity charges, telephone, Tax on rental income etc. This is not a complete list of all the matters you will have to deal with, but it will give you some idea of what you will face if you buy property in France – Good luck!