Buy­ing prop­erty

Things to think about be­fore you sign on the dot­ted line

French Property News - - Contents - Emily South­combe is an in­de­pen­dent prop­erty fin­der and relocation agent Tel: 01727 841884 south­man­prop­

With the rise of on­line prop­erty por­tals, it has never been eas­ier to find a home in France on­line, whether through an agent or via a pri­vate ven­dor.

Pri­vate sales have been com­mon­place for years in France and are now very of­ten mar­keted via so­cial me­dia too.

Once you have found the right prop­erty for your in­vest­ment or sec­ond home, you will nat­u­rally want to seal the deal as soon as pos­si­ble. How­ever, it is worth tak­ing a step back and con­sid­er­ing a num­ber of is­sues be­fore sign­ing any­thing on the dot­ted line.

Bank on it

If you are look­ing for fi­nance, French banks have long been lend­ing to UK non-res­i­dents, and mort­gage rates in France are lower than they have been for many years. How­ever, the lend­ing cri­te­ria can be strict, so it is worth talk­ing your project through with a bank or bro­ker be­fore en­ter­ing into price ne­go­ti­a­tions.

If you are not from the UK, it is worth ver­i­fy­ing which banks have a pol­icy of lend­ing to peo­ple from your coun­try and whether their cri­te­ria are likely to change. For ex­am­ple, BNP Paribas has re­cently be­gun to lend to res­i­dents of Aus­tralia, New Zealand and South Africa.

Flat deals

When look­ing to buy an apart­ment, an im­por­tant thing to do be­fore ne­go­ti­at­ing on price is to ask to see the min­utes of the meet­ings be­tween other own­ers and the man­age­ment body – le syn­dic de co­pro­priété.

In th­ese doc­u­ments you will find de­tails of any prob­lems with the struc­ture of the over­all block and any dis­cus­sions on fu­ture works. If there are works that will need to be car­ried out – the build­ing needs re-ren­der­ing, for ex­am­ple – the cost will be shared out among the own­ers and you will need to make sure that you have al­lo­cated funds.

Once you have a full pic­ture of any spend­ing you might be li­able for in the com­ing months and years, you can ne­go­ti­ate the sale price ac­cord­ingly.

Ter­mite tests

For both apart­ments and houses, the ven­dor must pro­vide a num­ber of di­ag­nos­tique tests. Th­ese pro­vide clar­ity on cer­tain as­pects of the prop­erty, such as whether it has any se­ri­ous is­sues with as­bestos, ter­mites, lead in the paint or pipes etc.

Th­ese do not amount to a struc­tural sur­vey though; you will have to ap­point a sur­veyor should you wish to have a struc­tural re­port car­ried out.

Sig­na­ture here

One of the first things you will be asked to do once the price has been agreed is to sign a com­pro­mis de vente or a promesse de vente. Th­ese are pre­lim­i­nary con­tracts and you can lose your de­posit if you do not pro­ceed for rea­sons that have not been out­lined in the clauses sus­pen­sives or getout-clauses.

Un­less you are flu­ent in French, it is highly ad­vis­able to ap­point an English-speak­ing no­taire to make sure you fully un­der­stand your rights and any doc­u­ments you are sign­ing.

Tax­ing times

Tax and in­her­i­tance plan­ning are worth con­sid­er­ing from the out­set; an English-speak­ing spe­cial­ist will be able to take you through the var­i­ous ways of buy­ing and the is­sues to con­sider from an in­her­i­tance per­spec­tive.

There are also stan­dard taxes to take into con­sid­er­a­tion as the owner of a French prop­erty; th­ese are known as taxe fon­cière (land tax) and taxe d’habi­ta­tion (res­i­dent tax). The agent or ven­dor will be able to pro­vide you with his­toric fig­ures so that you can fac­tor th­ese into your fu­ture run­ning costs.

Taxe fon­cière is payable by the prop­erty owner re­gard­less of whether or not it is be­ing let whereas taxe d’habi­ta­tion is paid by ten­ants if the prop­erty is let on a long lease.

To let or not to let

Look­ing ahead to man­ag­ing the prop­erty once you have bought it, it is well worth do­ing re­search into lo­cal rental agents. If you do not in­tend to let, is there a lo­cal key­holder who would be able to keep an eye on the prop­erty while you are not there?

There have re­cently been re­stric­tions on let­tings made through Airbnb and sim­i­lar web­sites in Paris and Lyon, with other cities fol­low­ing suit, and this is worth tak­ing into ac­count if you were con­sid­er­ing this rental model and are look­ing at in­vest­ing in the larger cities.

If you are con­sid­er­ing a lease­back in­vest­ment, it is wise to look into who will man­age the prop­erty once it has been built, just to make sure that you have full con­fi­dence in the project and trust that the man­age­ment com­pany will de­liver on their rental re­turn prom­ises.

Fi­nan­cial services

When you are get­ting closer to com­ple­tion, you will need to think about in­sur­ing the prop­erty. It is worth seek­ing out English­s­peak­ing French prop­erty in­sur­ance services in or­der to make sure that you fully un­der­stand the con­tract.

Cur­rency ex­change will also be at the top of your agenda; there is a wide of­fer­ing of for­eign ex­change com­pa­nies who will guide you in trad­ing into eu­ros as and when nec­es­sary.

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