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Buying property and living in France - What You Need to Know

Buying a French property

•  Agree price and terms of contract, including get-out clauses (clauses suspensives)
•  A Notaire draws the preliminary sales contract (compromise de vente), which must be signed by both parties. The buyer pays a deposit (5 -10%) to the notaire, a 7-day cooling-off period follows during which the buyer (not the vendor) can withdraw. If the buyer withdraws after the 7 days the deposit is not refundable.
•  Conveyancing will take up to 3 months and is carried out by the notaire, who will advise all parties of the date and time of signing of the purchase agreement (acte de vente)
• Balance is transferred to the notaire prior to completion
• On the day of signing key and proof of purchase  (attestation de vente) are handed over to the buyer. The deed of sale (acte de vente) will be sent to the owner in the following 6 months.

Remember!

• Always ask the estate agents if the ”frais d’agence sont inclus / FAI” (estate agent’s commission included). This is sometimes indicated on the sales notice. If it is not included, ensure the seller pays for them.
• Get quotes for any building work you want to carry out, before committing yourself. If you need a structural survey either go to a British surveyor, or do it the French way and use an architect or builder
• Do not sign anything you don’t understand. Make sure that any clauses agreed with the vendor are included in the sales contract.
• The notaire represents both parties and must act impartially. There is no extra cost if you want to appoint your own notaire. You can also appoint an independent legal advisor (at a cost) if you are unsure of what you are doing.
•  Household Insurance must be set-up, in your name, on the completion date. The notaire will want to see proof of this.
• Check plans before making an offer, be clear on boundaries, rights of way and access
• Take advice regarding inheritance law
• View the property on the completion day, as it is sold as seen on signing date
• Shop around for the best currency exchange rate deals, if you are moving cash between countries
• Open a French bank account
• The notaire’s fees are an additional 2.5 to 8% of the purchase price. This is fixed by law, the rate depends on the actual price (the more expensive the property, the lower the rate)
• Use an interpreter if you are not 100% confident you will understand everything that is being said and agreed.

What you need to know about mortgages

·          Non-status and self-certification mortgages are not available

·          Interest only mortgages are rare

·          A 30% deposit is the norm

·          Your total monthly loan repayments (i.e. your French mortgage and other loans you might have) cannot exceed 33% of your monthly income

·          Ask a French mortgage advisor to calculate your budget to avoid disappointments

·          Some UK high-street lenders have subsidiaries in France; they do however follow the French banking rules when calculating affordability

·          Dealing with a French mortgage lender directly can be difficult if there are communications difficulties. Chose a lender that speaks English or get some help.

Exchange rate

·          If you are going to obtain a French mortgage, even fixed rate for life, don’t forget that the actual monthly repayments will not remain the same. The exchange rate will see to that. Use a specialist currency provider to minimise fluctuations.

www.hifx.co.uk – Foreign currency specialist

Local property taxes

Taxes payable by residents and non-residents alike

·          Taxe d’habitation: payable yearly by the occupiers of the property on 1^st January each year. If the property is a holiday home, or let on a part-time basis, it is payable by the owner. In the case of long-term let it is payable by the tenant. This is a local tax, raised by the town hall (mairie), and used / spent locally. The amount of the tax is based on the notional rental value of the property, calculated from the land registry plans (cadastre) as follows: rental value x tax rate for your locality

·          Taxe foncière: payable yearly by the owners of the property. It is made up of tax on buildings, paid on any habitable property (even if not occupied), and tax on land.

If the property is a second home taxes may be reduced as you are using less of the amenities. A 10% penalty is imposed for failure to pay.

The combined total is low, generally ranging from £100 to £400 depending on the size of the property

En tontine or Indivision?

French succession laws are different to that of the UK. Taking that into account and being aware of the options will help you anticipate potential problems in the future. Go to the following Prettys webpage for further information on the subject.

http://www.prettys.co.uk/personal_law/french_property/tontine.shtml

French inheritance tax

Check out the following link  to Prettys solicitors which will provide you with the information necessary to understand the issues

http://www.prettys.co.uk/personal_law/french_property/french_inheritance_tax.shtml

Renewable energy

With the cost of fuel, gas and electricity going up everywhere the installation of alternative, renewable, energy supplies is fast becoming an attractive alternative

Below is a quick overview of the technologies / solutions available:

·          Solar power: can be used for the creation of electrical power (photovoltaic) or heating / hot water (thermal). Solar power is a proven and safe technology It requires a strong enough roof as for water heating 2 to 5squm of panels are required.

·          Biomass/wood: large choice of stoves, boilers, cookers available; using wood produces ash which can be used on the garden

·          Ground source heat pumps: uses “free” round heat; the payback period is only 3 to 5 years with a longer lifespan than conventional systems; can provide a cooling element. Space is needed for the trench or borehole and the compressor and pump require electricity

·          Wind: a practical solution for remote locations wind is potentially a large source of energy Turbines can last up to 20 years and do require service checks

·          Water: Obviously not everybody has water on their land, but power can be generated from a small stream. Although the installation costs are high they are still lower than grid connection in remote areas.

Taking your children to France

Expectant mothers

• France does provide excellent medical care. To claim all your benefits you must declare your pregnancy before the third month and have all required medical examinations.. Your own doctor will tell you what paperwork there is and provide you with a list of obstetricians and gynaecologists in your area.
• Message (www.messageparis.org): association for English speakers expecting a baby or with young children

Home schooling

In order to be allowed to home school your children you will have to do the following:

• From the age of 6, register at the mairie (town hall) and the Inspection Academique
• From the age of 8 children must sit a twice yearly test to determine progress. These tests are carried out by the Inspection Academique, at home or at local premises
• Curriculum requirements are: French (language) written and spoken, French literature; mathematics; one foreign language, history and geography, Science, Art, Physical Education