Historically France has been a very popular location for second homes / holiday homes, with well over 70 million tourists a year.  While the majority of overseas or foreign national buyers purchasing property from France have been Expats from the UK , interest from other areas of Europe is starting to pick up.  The country itself is perfectly placed for easy access to many parts of Europe and the country offers a array of climates and landscapes to suit all.

The country has a very liberal property market with no restrictions on foreign ownership, although there are restrictions on the resale of certain types of property, e.g. Vineyards, etc (these should be checked with a French based solicitor who is in touch with local laws).  The process for actually buying a property is fairly straight forward, with buyer and seller agreeing a price, then a solicitor is appointed to take the deal forward.

A 10% deposit will be held in a secure account by the solicitor (notary) prior to various checks and paperwork being  completed.  If for some reason the buyer pulls out without good reasons then the 10% deposit will be lost. 

Contents: Property Market Performance in France | Property Costs in France

French Property Market Performance

While the French property market is still very active, the increase in house prices has slowed some what over the last 3 years.  A rise of 15% in 2004 was replaced by a rise of 11% in 2005, with 2006 seeing a rise of only 7%.  This trend is expected to continue with many observers worried abut a general slowdown in the world economy, with the UK market a strong contributor to French house prices.  While many UK citizens have relocated to France full time, the market for cross channel flights and ferries is strong, with many people choosing to work in France through the week and commute at weekends.  

As you would expect in a country which takes in the mountainous regions of the Alps and the more sunny climbs of St. Tropez, the variation in house prices is quite marked.  Areas such as Paris, and its many suburbs, are still very popular with employment being a great pull for this area.  The county does however have an excellent transport network, allowing more foreign nationals to acquire property on the outskirts of the area and travel by public transport.

Whether the ongoing French election will impact on the property market in the short term remains to be seen, although France’s location in the centre of Europe and the firm demand for property in the holiday regions should offer some support for the market.

Property Costs in France

France appears to be one of the most expensive property markets in Europe, with charges including :-

Solicitor (Notary) Fees 3%

Estate Agent Fee up to 15% (normally between 7% and 8%)

Transfer Tax 7.5% (under 1% for new builds)

Registration Fees 6%

The capital gains tax system is also fairly severe with nationals being charged 26% of their profit after taking onto account various allowances from the Authorities.  It is slightly different for non-resident members of the EU who are charged in the region of 16%.The charge for non EU residents is a massive 33.3%, which is payable on the overall profit.

In order to control the turnover of properties, which has become a problem over the years, the Authorities have introduced a taper relief system whereby the basic Capital Gains tax charge will be reduced the longer the property is retained.