France
A destination of choice for holiday makers in France for over 100 years, due to its warm coastal climate, natural beauty and accessible skiing in the French Alps, the south of France in particular and France generally remains a hugely popular investment option.
Costs
Aside from the agent's fees, which are normally built into the purchase price of your property, you will also need to have about 10% available to cover the cost of the notaire (solicitor) and taxes.
Notaire's fee: The good news is that when you're buying a property off plans or under five years old the notaire's fees are considerably cheaper, typically between 2.5% & 3.5%. This however jumps to anything between 6.5% and 8% for property over five years old.
Taxe fonciere: There are two taxes on all residential property, collected by the state for the local authorities, which vary according to the location of your property. More good news for buyers of new homes, for the first year you are exempt from this taxe fonciere, which is basically a rate paid to the government annually.
Taxe d'habitation: This is a local tax paid to your locality for services such as the supply of water and electricity.
Maintenance charges: If you buy a property within a complex you will be in most cases expected to pay a service/maintenance charge. This will vary depending on the facilities on site and the size of your property.
Process of buying
When you buy a new property in France, they are sold at the asking price and there is rarely negotiation. As with many new schemes, you may have to wait anything up to two years to see the development completed.
Contract: Once the sale has been agreed you will need to sign the initial contract (compromis) this will have all the details of the sale, including any conditions or clauses which have to be met, and a date by which the sale must be completed.
Cooling off period: After the compromis has been signed, both parties then have, by law, a cooling off period - seven working days - in which to change their mind. During this period you can withdraw from the agreement without any penalty. It is a good idea to chase up your mortgage agreement to make sure everything is in place at this stage.
Tip
If you are not sure which name will go on the deeds, make sure that you put in a clause of substitution into the contract. This allows you to change the name of ownership at the final signing.
Deposit: This is usually 10% of the purchase price on a second hand property, but on new properties it is usually between 2% and 5%. You need to send this to the notaire.
Completion: You will now have to sign the acte de vente, this the final stage so you need to make sure that all the required funds are in the notaire's account as cleared funds by the morning of the signing. Do note that the period of time from the initial signing of the compromis until completion can be anything from 3-4 months.
If the funds are not cleared, you cannot complete the sale. Buyer beware there is a lot of paperwork to sign, most documents are in triplicate and all have to be signed and countersigned at completion. It's a slow process, but thorough so you can be sure that all aspects of the sale have been checked.
Tip
If you are getting a mortgage through a French bank then be aware that once you receive your loan offer, you have by law, to wait 11 days before signing and accepting the offer. On new properties you pay the initial payment and then the banks take over the stage payments, only releasing funds after they seek approval from you that work is progressing well.
Final Tips
Tip 1: Accessibility - both from a practical and investment point of view, any property over an hour from the nearest transport link should be considered carefully.
Tip 2: Notaire fees differ for different regions, so be aware what the variation is. The same is true of the taxe fonciere and taxe d'habitation.
Tip 3: There's no escape, you need to do the legwork before signing on the dotted line, have a good look around your chosen location - act in haste - repent at leisure.