Payments in a French Property Purchase: Managing your Payments With a Currency Specialist

Buying a property in France exposes you to multiple payments, from paying the deposit and notaire’s fees to maintenance and mortgage payments. With residence and your funds in another country, paying these aren’t as straight forward due to the added element of currency exchange. Below we follow the different payments you will be exposed to, and the different tools a currency specialist offers you to manage these payments efficiently. 

How to manage your payments towards your property purchase in France: 

Moneycorp will help you to plan ahead of the payments you need to make (listed below) by giving you access to tools to manage your risk against currency fluctuations and volatility.  

 

1. The Deposit 

The deposit is your first payment and requires a 5-10% payment once the compromise de vente –or purchase contract- has been signed and the 10 days cooling off period has expired. 

The best tool for this is a spot contract.  

Spot Contract 

This is the most simple tool and is essentially seeing a rate and transferring your funds. Buyers will often use this method when they need to make a one off smaller payment or they have little time to transfer the funds such as paying the deposit or Taxes. 

 

2. The Completion of Funds 

As an average completion tends to take place 2-3 months after the compromise de vente. The signature of the Title Deeds takes place in front of a French Notaire in France. The final funds will have to be wired directly to the Notaire’s account. 

To mitigate the risk you will face with the exchange rate fluctuation during this period, it is best to utilise a forward contract or a market order. 

Forward Contracts: 

One of the most useful tools for a property buyer is a forward contract. Forward contracts will allow you to fix the rate of exchange ahead of a future payment. There are mainly 2 reasons for a property buyer to fix the exchange rate ahead of completion. One, to take advantage of a rate move –even if you don’t have full availability of funds- and second to fix the price, protecting it from any negative rate fluctuations, giving you the peace of mind and the certainty on how much the property will cost you.  

The way to decide to manage your exposure will depend entirely on your attitude to risk and your circumstances. This is why it is important to get some guidance. Your dedicated market specialist will discuss your individual requirement with you and guide you on the best approach for you. 

Market orders: 

A market order is popular amongst property buyers who have a few month before their completion date. It allows you target a desired rate and set up an automated payment conditional to that rate. Therefore if your target is achieved we will automatically buy your euros at the agreed rate. 

Alternatively, if you are very sensitive to certain rate movements you can set a stop loss order. Here, you have the ability create a safety net for your budget, executing your transfer before the market drops below that level you request, protecting the value of your transaction and your budget. 

Buyers will often use this when waiting to pay the remaining balance for their completion funds. 

 

3. Taxes and Fees  

Notaire fees – You will need to add this to the completion funds payable at the time of signing the Title Deeds. 

Taxe foncière – The French taxe foncière is an annual property ownership tax which is payable in October every year. 

Charges de copropriété – If you purchase a property within a private complex, you will be required to pay monthly or quarterly maintenance and service charges. You will be made aware of these charges prior to your purchase and they are usually based on the amenities available in your complex. Properties with swimming pools, tennis courts, concierges or other facilities will typically have higher charges. 

Taxe d’habitation – The taxe d’habitation is an annual residency tax which is imposed on the individual who is resident in the property on the 1st January 

Taxes and notaire fees are usually one off payments and are much smaller amounts. These can be easily sorted with a spot contract. 

 

4. Buying Off-Plan 

Buying off-plan you will be subject to pay for the property in instalments. The process is known as l’échelonnement du paiement du prix. Depending on whether you are purchasing an apartment or a house, the payment percentages due at each stage will vary. Below is a guide. 

• Foundation (Apartment – 35% | House – 20%) 
• Superstructure (Apartment – 70% | House – 45%) 
• Final completion (Apartment – 95% | House – 85%) 

• Handover (Apartment – 5% | House – 15%) 

When buying off-plan, you should be managing your risk with a forward contract and the help of a market specialist who will help you to plan your finances ahead of each payment.  

 

5. Aftercare, Maintenance and Mortgages 

Once you own the property you may continue to be exposed to the fluctuations of the exchange rates. Maybe you decide to embark in a lengthy renovation project or you are thinking of renting the property out and bring the proceeds back to your home country. Perhaps you have decided to retire in France but your pension is still being paid at your local account or you have taken a Euro mortgage and face monthly payments. 

In any case, there is likely to be some maintenance expenses –utility bills and local taxes- that you might need to cover. You can manage these payments with regular payment plans or via the Moneycorp app. 

Regular Payment Plans 

After you purchase your property you will be subject to ongoing payment such as mortgages and maintenance fees etc. In these cases Moneycorp can still help you cover these costs in the most cost effective way. You can use their online platform to manage small payments.  Plus in some cases you can access a regular payment plan which will allow you to set up a direct debit and even fix the rate on small frequent payments for a period up to two years.