Whether you have always dreamt of buying a house in France or are looking to invest in French real estate, the French property market is an attractive prospect for foreign buyers. But can you still snap up a bargain in France? How much can you really expect to pay and what hidden costs, fees, and taxes should you be aware of? Let’s break down the cost of buying a property in France.
French Property Prices: How to Know if the Price is Right
France has long been known for its low house prices and although this is still true in comparison to the UK property market, for example, it still depends very much on where and what you are looking to buy.
Average house prices vary dramatically depending on the region—from €80,000 in more isolated rural areas to over €400,000 along the Côte d’Azur—and they are steadily increasing year upon year. In 2020, the FNAIM, France’s National Association of Estate Agents, reported average national house prices of €2,276 per square metre, while this soars to over €10,000 per square metre in the Paris region. In short, location is the biggest factor affecting property prices.
There are a number of factors to consider when assessing the price of a property. The age and condition of a property, proximity to sights and amenities, land rights, and the local neighbourhood of a property can all influence the price. Take a look at what similar properties have sold for in recent years, the prices of current properties are on the market and ask the advice of your estate agent, notaire, or property advisor.
Ultimately, the most important thing is deciding on the right property and the right price for you.
Making an Offer: How to Negotiate the Best Price on your French Property
Many buyers successfully negotiate the price of their French property and it is always worth putting forward a well-considered offer. However, don’t expect to bag a huge reduction—most properties still sell for close to the asking price and making an offer considerably less than the asking price can sometimes cause offence in France, essentially putting an end to negotiations.
When it comes to making an offer, it’s a good idea to talk to your estate agent or notaire. Ask them how long the property has been on the market, why the owners are selling, and whether or not they think they would be open to negotiations. They will know the region, property, and sellers, and should be able to advise on a suitable figure.
Setting Your Budget: What’s the Real Cost of Buying a Property in France?
Deciding on your budget is the first thing you should do when embarking on your journey to buy a French property. This is where it pays to do your research. In France, it’s the buyer that pays all the fees when purchasing a property and these can be quite considerable (as much as 20% of the property price in some cases). So make sure you account for all of these in advance and deduct them from your initial budget when property searching.
Let’s take a look at the different fees and taxes involved in a French property purchase.
French Estate Agency Fees and Commission
If you purchase your French property through an estate agent, expect to pay agency fees/commission of around 6-10% of the property price. Oftentimes these fees are included in the listed price, but it’s important to confirm that this is the case. Typically a listed price will be marked as FAI (Frais d’Agence Inclus) or HAI (Honoraires d’Agence Inclus) if the fees are included.
These fees obviously don’t apply if you are purchasing through a private seller.
All property purchases in France are conducted through a notaire and the buyer is also responsible for paying the notaire’s fees. This is a legal requirement and the fees apply to any property, whether bought privately or through an agency. Fees are typically between 6% and 8% depending on the property’s value and whether there is a mortgage involved, but they can occasionally be more, so be sure to check.
Notaire’s fees are rarely included in the listed price, so it’s important to factor them in. Ask your estate agent for an estimation before making an offer on the property.
VAT or TVA on a French Property Purchase
VAT is not charged on the property itself, assuming that it is more than five years old. New-build properties, however, are subject to VAT, so be sure to add 20% to the list price. Most prices will show whether or not the VAT has been added—HT or ‘hors taxes’ means that the taxes are not included, while TTC or ‘toutes taxes comprises’ means taxes are included. If in doubt, it’s always best to ask.
20% VAT (TVA) will also be added to any fees and services involved in your property purchase, including estate agent’s and notaire’s fees. Typically this is will already have been added to the quoted price, but it’s always worth double checking.
Diagnostic and Buildings Surveys
Diagnostic surveys are legally required to be carried on a French property at the time of the sale. These are one of the few expenses that are covered by the seller. However, if you choose to hire a surveyor to carry out building or structural surveys, or elect to have a builder or architect look over the property, this will be at your own expense.
Additional Fees for Foreign Property Buyers
As a foreign buyer, you might find that you want to use your own legal representative or seek advice on property ownership and French inheritance law from a legal advisor or French law specialist. You may also require the use of a professional translator to translate legal documents and contracts (which will all be in French) into English. The FrenchEntrée directory has listings of English-speaking specialists in all of these areas.
If you used a property finder or property advisor to help with your property search and planning your French property viewing trip, many of these also charge a fee. Add to this the costs of travel and accommodation for multiple viewing trips to France and the extra costs quickly add up. It’s a good idea to make a list of all the associated costs before you start property hunting, especially if you are on a tight budget.
The good news is that FrenchEntrée’s property service, advice, and support is all completely free—you can sign up to become a member here. We are renumerated by our partners, so the price you pay is no more than going directly through an estate agent.
Property Taxes and Insurance When Buying a House in France
While there are no additional taxes on the purchase of your property, remember that as a new French homeowner you will now be liable to pay the local property taxes—the taxe fonciére and the taxe d’habitation—on the property. However, during the year of the property sale, it is the seller who is responsible for paying the taxe fonciére. See our FAQ Who pays the taxes, the buyer or the seller for more on this.
As the new homeowner, you will now also need to take out home insurance on your property. Often the notaire will want to see proof of this before completion, especially if you have a mortgage on the property.
Currency Conversion: Get the Best Rate for your French Property Purchase
Possibly the biggest consideration for foreign buyers investing in French property is that of currency conversion. Currency exchange rates fluctuate and transfer fees can quickly add to the cost of buying a property in France, especially if you don’t plan ahead.
As a buyer, you will need to have a 10% deposit ready to pay to the notaire in order to sign the initial Compromis de Vente. You will also need to transfer the rest of the balance to the notaire before the signing of the final Acte de Vente, just a few months later. If mortgages are involved, either in France or in your country of origin, the need for a long-term currency conversion strategy is even more important.
Our advice is to get in touch with a specialist currency broker, like our partners at Moneycorp. Not only can they potentially save you hundreds of Euros when transferring funds to France, but they can also explain the different options available to protect against shifting exchange rates and minimise associated transfer fees. You should look to do this before setting out on your first property viewing trip to France.
Buying a Property in France?
From planning your property-hunting trip to collecting the keys—FrenchEntrée is here to guide you, advise you, and hold your hand through the entire process. Ready to get started on your property search? Browse our property for sale in locations all over France and become a FrenchEntrée member to receive property alerts and insider tips from our experts.
Want to make your French property dream a reality? Start by reading our Beginner’s Guide to Buying French Property, then follow our step by step articles detailing every stage of the purchase process.
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