All information given on PurchasePropertyinFrance.com or SolasFinancial.com is for general guidance only. We encourage you to seek professional legal advice on all questions relating to property, inheritance and tax law.
Solas Financial provides specialist independent brokerage services via a strategic partnership with France Home Finance, who have a long standing, proven track record of serving non-residents and expatriates purchasing buy to let, classic real estate and leasebacks in France.
You will have access to all the best French mortgage products with the lowest interest rates on the market, not just the products from one or two banks.
You will have expert advice to help you choose the best mortgage product, open your French bank account and to obtain the obligatory life insurance.
You will have Solas Financial and France Home Finance as your assistant to coordinate communication between your bank, real estate agent, notaire and all other parties involved.
You don't need to worry about misunderstanding the process due to the language barrier. As you are buying in France, some banks provide all documents to you only in French. Our experienced bilingual advisors will clearly explain all the terms and requirements in English, as well as walk you through the process step by step. We provide this service to you for as long as you have your mortgage!
You will save time and frustration: having backgrounds in French banking as well as banking in many other countries ourselves, we know how to navigate the French system efficiently, and how to explain it to you in terms familiar to you.
You will have peace of mind because we understand the concept of customer service, we will answer queries quickly and competently. You are our number one priority.
Solas Financial can assist you with regular mortgages, leaseback mortgages, re-mortgages and equity release on properties in France. Click HERE for more information on the various types of mortgages offered.
What kind of property can I get financed to buy in France?
You can obtain financing for almost any kind of residential property on mainland France and Corsica, including new constructions, leasebacks and buy-to-lets. Restrictions may apply in the case of chateaux or properties needing extensive renovation to become habitable. Your home can be for personal or investment purposes.
Can I finance renovation expenses for my new home?
Yes, it is possible to include renovation expenses in the mortgage for your new property. The bank will require estimates from licensed French contractors and will disperse the funds to them directly upon completion of the work. It is not possible to obtain funds to pay foreign workers for renovation.
Can I buy property in France with my company or trust?
Yes, it is possible with some of our lenders for your foreign company, French company or trust to take out a mortgage in France. Please note that the parties on the title of the property must normally be the same parties on the mortgage so you cannot take a mortgage individually for a property your company owns.
In general, you can borrow up to 70-80% of the total of the appraised value of your home), agency fees, renovation costs and mortgage fees. Depending on your situation and the property to be purchased, the banks may lend up to 90% of the appraised value. If you are a tax resident outside of Europe, North America and Australia, you may be required to pay a larger down payment.
We can obtain financing for both self-employed and salaried individuals. As a guideline, your new mortgage payment plus other monthly credit payments should not exceed one third of your gross monthly income. If you are married, your spouses loan payments and revenues are taken into account.
You must be between 18 and 65 years old at time you apply for the mortgage. Ideally your mortgage must end before your 75th birthday as the obligatory life insurance becomes very expensive after this date. It is possible to obtain a mortgage without life insurance if you are willing to let the bank manage a sufficient amount of investments for you (stocks, bonds, funds) and sign over those investments to the bank to pay off your mortgage if needed in the event of your death.
An SCI (socit civile immobilier) is a company established under French law, which is set up to manage and rent out property. If the property is purchased by an SCI, the members of the SCI own shares in the company, which then owns the property.
Families sometime set up an SCI together to be able to pass shares between members of the SCI. SCIs are therefore particularly interesting ownership vehicles for non-residents buying property in France.
The cost to set up an SCI can be as little as 2000 and the company must have its own bank account and maintain certain legal formalities. It's important to get trusted legal advice if you plan to purchase through an SCI to be sure you will be able to take advantage of the benefits, and to correctly structure the purchase and the loan. Solas Financial can put you in touch with experienced legal advisors to assist you in making the right choice.
Who is the notaire and what does he/she do to help complete the purchase of my property?
A Notaire is the most qualified lawyer of the French legal system, studying seven years to qualify. The notaire is both a Public Officer and a legal counselor in specific areas of the law, including real estate, family and corporate law.
The notaire has the power to authenticate certain agreements, such as real estate sales, which cannot be enforced by any other means. The law imposes a broad personal liability on the notaire for professional acts. Notaires subscribe to a common insurance, which provides an immediate financial guarantee to the client in case of their error. Thus you have the security of working with a specialized lawyer to ensure that your transaction is property completed. Please note that the notaire does not ordinarily provide legal advice on the transaction.
"Notaire fees" is the term given to all the taxes and registration charges that a buyer incurs when purchasing a property. Usually this amounts to between 6-8% of the purchase price, depending on the price of the property for an existing property. These fees consist of 5.5% tax on the purchase, costs to register and authenticate certain documents, putting the mortgage or lien on the property, costs to verify certain matters related to the purchase, and the fees to the notaire for doing this work. The notaire fees are only 3-4% for a new construction or a property less than 5 years old.
The actual fees that the notaire earns for his work are fixed by law. Neither the notaire nor the clients may modify these specific fees. For instance the fees for a purchase of an apartment in Paris total 0.825% of the price plus VAT (19.6%). Be aware that, if there are two notaires, the fees are shared between them. Thus retaining your own notaire will not increase the professional fees. It is always advisable to have your own notaire, so that he or she is working on your behalf and providing you with his full attention and advice on the transaction. Solas Financial can put you in contact with English speaking notaires who can expertly guide you through the buying process.
While for some buyers initially the notaire fees can seem high, it is worth remembering that property taxes in France are substantially lower than in many other countries such as Ireland. For example, Irish investment property Stamp duty can be as high as 9% plus c 2% closing (legal fees and misc outlay), which is significantly more expensive than France.
What other charges and taxes should I be aware of when buying home in France?
For apartments or condominiums, you can expect to pay charges de coproprite. These are monthly or quarterly maintenance and service charges that relate to the common areas of the building.
You will also be responsible for taxe foncire,or the land tax. It is payable the last quarter of the year. This expense is often split between the buyer and seller in the case of a mid-year purchase.If you live in the property, you will also be responsible to pay a taxe dhabitation which covers services and maintenance provided by the local government. If you rent out the property, this tax is paid by the renter. This tax is also payable the last quarter of each year.
If you have rental income on your French property, you will need to file income tax and possibly VAT tax declarations in France each year and in some cases your home country as well. Be sure to seek professional tax advice to be able to take advantage of all relevant deductions.
What are the pitfalls to watch out for when obtaining a French mortgage?
Based on experience with hundreds of clients, here a few tips:
Never sign a promesse or compromise de vente without a "clause suspensive". This clause in your contract allows you to recoup your deposit should you not be able to obtain financing on the terms you require. There are many reasons you may need to pull out of the sale: the life insurance exam turned up some surprise information and the rate offered is too high, you don't obtain a mortgage or you don't obtain the terms you want from the first round of banks applied to, you suddenly have an unexpected expense that will eat up your down payment money, etc.
Let us know about any serious health issues you have up front. This could affect our strategy to help you obtain the obligatory French life insurance at a reasonable rate and in the deadline required. Remember that we do not know what rate you will be charged until the insurance company studies your full application and health information.
Remember important deadlines
Once you sign a reservation contract, promesse or compromise de vente, you have seven days to retract and get your deposit back. After that, you can only get out if your clause suspensive is fulfilled otherwise you lose your deposit. It usually takes a minimum of two bank rejects on the exact lending conditions stated in the clause suspensive for the notaire to refund your money. Banks are not allowed to provide a reject letter unless they have fully studied your application. If a bank did not have time to come to a decision, they will not provide a reject letter so be sure to get your applications in early. You may ask, if time is an issue why not send the application to 8 banks at once? It is not a good idea to send the application to more than 2 banks at a time. We often learn important information based on the reaction of the first banks that may change the way we present your application to the next banks to obtain a better result.
Once you sign the reservation contract, promesse or compromise de vente, you typically have 30 to 45 days to obtain financing or activate your clause suspensive. Since the banks can take anywhere from 3 days to 6 weeks to study a mortgage application) you need to get your application in as early as possible.
Once you have accepted a mortgage offer, you typically have 4 months to complete the sale. After 4 months, the bank is not required to honour the terms.
Ask your notaire about inheritance implications. This is especially important if you are divorced and remarried with children.
Remember, a notaire is not obliged to act as your lawyer to represent your best interests. Their job is to carry out the act correctly. They are very knowledgeable individuals that can answer almost any question you have however you need to know what questions to ask. For full protection, you may want to engage a lawyer to represent you in your transaction.
The tax implications between France and other countries can be complicated. Be sure to seek professional tax advice to be compliant and to take advantages of all deductions.
Get the update on the down payment required and final closing costs from your notaire as early as possible so you have enough advance notice to arrange your funds.
Be sure to deposit a minimum of 3000 in your French bank account when you open it. Your account will be direct debited for the mortgage bank fees before the bank will release funds, the monthly life insurance payments and eventually the mortgage payments. Due to the multiple parties involved with interdependent processes, it is difficult to know exactly when all of this will happen. The best is to put the money in the account as soon as possible.
