Thinking of investing in France? Here’s a summary of the main points to remember and consider.
The French Property Law is very strict when it comes to property purchase. Only licensed property brokers with a “Carte Professionnelle” and notaries are allowed to buy and sell properties. If you are purchasing a new property , you will be signing a pre-sale agreement called contrat de réservation and in the case of a resale property, you will sign a compromise de vente.
You will have a cooling off period of 7 days after the signature of the contracts which means that the contracts become contractual only after that period over. A deposit of 5 to 10% will be required by the notary to confirm the reservation. If you are applying for a mortgage, you will need to organise your mortgage offer within 45 days (in average). If you can’t obtain your French mortgage, you will be able to cancel the sale and get your deposit back. It usually takes between 2 to 4 months to finalize a sale and sign the deed of sale (acte de vente).
You will be liable to pay for the notary fees which are between 2 to 3% for a new property and around 7% for a resale property.
If you are financing your acquisition with a French Mortgage, you will also have to pay for a mortgage charge (hypothèque) which will be around 1 to 2% of the borrowed amount.
TYPES OF PURCHASE
Classic purchase – you buy a property either off plan, new or resale as a freehold classic purchase . This is the most common type of acquisition in France. It applies to your main home, second home or investment property. You are free to use your property as you wish and you can rent it if necessary.
SCPI & SICAV SIF : used mainly by property investors, it is a way to invest into commercial real estate (offices, retails spaces etc.) while spreading the risks as you are buying in property funds with a guaranteed return. It is a good way to consolidate a property portfolio while generating a regular income. Return are between 5 to 7%. Investment starts as low as 5 000€ for SCPI to 150 000€ for the SICAV SIF.
Leasebacks : see our dedicated section
BareOwnership: see our dedicated section