Property in France, and Living In France
This page has been designed to give you a
general overview of how buying a French property and living
and retiring in France is probably very different from what
you are used to. We hope you find it useful…
Buying Property in France
Once your offer has been accepted by the vendor, the Estate
Agent or Notaire will complete the Compromis de Vente or Preliminary
Sales Agreement. This written document is a binding agreement
between the vendor and the buyer. Note there is a cooling
off period of 7 days. You must normally pay a 10% deposit
of the agreed price which will be kept by the Notaire in a
special notarial account as a guarantee until the purchase
is completed or cancelled. The property will then be taken
off the market. After signature of this document, a loan will
need to be obtained where necessary.
It takes between six and twelve weeks for
the Acte de Vente or Deed of Sale to be complete and ready
for signature. As well as drafting the Acte de Vente, conducting
planning and other searches and enquiries with the local authorities,
the Notaire will also act on behalf of the lender if a loan
is being used for the purchase of the French property.
Signature is made at the Notaire's office
and the buyer pays the balance of the purchase price and the
legal fees and taxes to the Notaire. When all the extensive
paperwork is completed and the house is insured you can receive
the keys of your new home. Once you have purchased a property
in France it is essential to take out a French will.
Role of the Notaire
Many non-French purchasers of property in France are confused
when only one French lawyer is involved in a transaction.
The Notaire’s duty is to ensure the correctness of the
transaction. He is appointed by the State to receive for authentication
all deeds and documents to which the parties wish to give
the character of authenticity.
The purchaser always has the right to select
a Notaire for the transaction but in practice if you are buying
from a French individual or builder, he will generally instruct
the Notaire. There is nothing to prevent the purchaser having
a separate Notaire to look after his interests and this does
not generally result in an increase in costs in relation to
the purchase as the Notaires must share these fees between
them. However, in practice this can cause delays and the use
of a suitably experienced lawyer may be quicker.
Taxes on your property in France
Local taxes are decided and calculated by local authorities
and are levied on a yearly basis. There is a local property
tax called taxe fonciere and also a tax d’habitation
which is similar to the UK’s council tax. These are
payable and split on a pro-rata basis between the buyer and
the seller on completion of the French property.
Household Insurance - A
brief guide to insuring your property in France
French household insurance policies normally include third
party liability, building and contents insurance. These are
usually contained in a multi-risk household insurance policy
called “assurance multirisques habitation”.
Whether you are relocating with your family
using your second home in France as a family retreat or holiday
let for investment income, it is essential that you arrange
suitable insurance cover. When completing, the Notaire will
require proof that you have an insurance policy in place for
your French property. Before you choose a policy it is important
that you read the small print so that you understand the scope
and restrictions of the cover.
Visas
If you are a UK national, then as a member of the EU you automatically
have the right to live and work in France. Since 2003, EU
members have been allowed to enter France to live and work
without the need for a “Carte de Séjour”,
which is the French resident permit. It may be a good idea
to still apply for a “Carte de Séjour”
which acts as your French ID, be aware this takes about 2-3
months to be processed. If you are a non-EU citizen then you
will need to contact the French embassy in your country of
residence before you arrive. Procedures vary for different
nationalities and depend on your reasons for wanting to enter
and reside in France.
Driving in France
The very good French road network is the envy of Europe and
a source of pride among its drivers with near empty motorways
and quiet country roads. Driving is most definitely the best
and most convenient way to visit and discover France. If you
do not wish to drive all the way, an alternative is to fly
to your destination and hire a car from the many car rental
companies there. If you are settling in France permanently
you have 3 months to change to French number plates and obtain
a French car insurance policy.
Retiring in France
Make sure you sort out your pension arrangements
If you are retiring permanently in France you should inform
your D.S.S. office a few weeks before your intended date of
departure. You will need to fill in the appropriate forms
according to your personal situation and should be able to
claim any pension you are entitled to as well as be able to
register with the French health system (see French health
system).
Anyone seriously thinking of buying a French
property and retiring in France should consult a professional
dealing in taxation and property issues beforehand. You should
also investigate your pension arrangements prior to moving
to France.
People generally think of France as a place
with high taxes. Compared to the UK, which has only 3 levels
of tax rates, France has seven. The top rate of tax in France
is 49.8%, while in the UK it is 40%, however unless the income
of a retired couple exceeds 70,000 euro they will be better
off taking up residence in France.
You must however be aware that all French
residents are liable for tax on their worldwide income, so
a pension being drawn in another country must be declared
in France. France has a double taxation agreement with many
countries, including EU member states and the USA, so the
tax paid in one country acts as a tax credit in the other.
The French healthcare system
Most people know that France has one of the highest world
rankings for the quality of its health service, but few are
prepared for the complex processes and rules involved for
new residents seeking to benefit from the French health service.
In January 2000 there was an event of great significance for
all French residents as the “Couverture Maladie Universelle”
(CMU) came into place. The law states that all French residents
of mainland France have the right to State healthcare at a
relatively low cost and that it will even be free and complete
for the poorer.
When residing in France you are obliged by
law to apply for affiliation to the State healthcare system
or CPAM. The cover provided by the State may not be replaced
by private health insurance policies and you are advised to
make an application with the CPAM as soon as you reasonably
can. The public health service does not impose any age limit
or any medical test and any French resident will be accepted
without question regardless of their physical condition. You
will normally not have to wait for treatment or for a bed.
Unless you are hospitalised in an emergency, you can go into
a private clinic or a general hospital of your choice, treatment
is freely available at both these type of establishments.
CPAM settles its share of hospital bills directly and re-imbursement
of cash payments for routine visits are automatic and generally
made within a few days.
Health Insurance
The French health service is not a completely free service,
so even if you are registered with the CPAM you do need a
top-up insurance policy. The notion that private insurance
and private treatment is superior to public treatment is not
a valid concept in France. The State health system supplemented
by a good top-up is superior in many respects, to any health
insurance that the private sector could offer in any country.
Entitlement to State healthcare
If you are employed or retired and are registered with a European
form E121, you will be covered by the State health insurance
anyway. Otherwise a proposition under French law exists to
enable you to join the French health system. To qualify you
must have been living in a stable and regular residence for
not less than three months and satisfy the legal regulations
of residence by applying for a “Carte de Séjour”.
If you move before you start receiving your State pension
and are already receiving your private pension, you should
apply for a E106 form which entitles you to medical cover
for up to 2 years. A private insurance scheme or voluntary
contributions should be considered when the E106 expires or
if you have not reached the age of State retirement.
People receiving a UK state pension
only
If you are a UK pensioner who does not receive a pension from
France, the UK will accept costs. A form E121GB will be issued
on request to allow you to register for healthcare in France.
People receiving both a UK and French pension
The French sickness insurance institution will be responsible
for the healthcare costs and you will receive the same healthcare
treatment as a French pensioner.
People receiving a UK pension who will receive another EU
pension at a later date.
A form E121GB will be issued on request. When the French or
other EU country pension becomes payable, the healthcare liabilities
will be reviewed.
The French banking system
If you live in France or use your French bank account on a
regular basis, make sure you are aware of the differences
between the French and UK bank system in order to avoid bank
charges and in some (more serious) cases, prosecution. It
is important to have a French bank account, especially if
you are looking to relocate and/or work, in order to receive
you salary but also to pay your bills. You will require a
French account if you have a French mortgage so that the repayments
can be made to your lender. As in the UK and indeed any other
country, mortgage repayments must always be respected or your
French property may be at risk.
You must ensure that sufficient funds are
available against any cheque you write as it is against the
law to write a cheque if you have insufficient funds to cover
for it. Bouncing a cheque in France can lead to your name
being entered on the blacklist of the Banque de France. This
may prevent you from having a credit/debit card and cheque-book
for up to 5 years, and make opening another account elsewhere
more difficult in the future, regardless of the amount on
which the cheque was drawn.
Opening a French bank account
If you are a French resident, you will require a valid ID
such as a passport or “Carte de Séjour”
as well as a proof of address (French utility bill in your
name) that is not older than three months.
If a non-resident in France, as well as the above, you will
need a credit card or bank statement from a reputable bank
showing your address, or a utility bill at your home address,
none more than three months old. If you are opening an account
from overseas and cannot be there in person, you will then
need to provide copies of two pieces of ID and two proofs
of address, all certified by your bank and with a letter of
recommendation.
The French education system - an introduction
The French State education is well organized and funded with
generally average to high standards in comparison to other
European countries. Attending school has been compulsory for
all children between the ages of 6 and 16 since 1967. The
State system is complemented by a comprehensive network of
private schools that includes international schools, most
of which are supervised by the Ministry of Education. Although
the curriculum and processes in State schools are reformed
regularly, the system benefits from a high degree of consistency
across the country.
The general structure of schools, secondary
schools and lycées was established in the 1960’s
and 1970’s. Since then, France has witnessed a significant
development in pre-school education where all children aged
between three and five years can attend nursery schools. The
French system is divided into nursery schools (ecole maternelle),
primary schools (ecole primaire) and secondary schools commencing
with college (college) until the age of 15 when the next step
is decided by examination. The top students will then be able
to attend a High School (lycée) to study for the Baccalaureat.
Those who do not make the necessary grades at this stage may
follow more vocation educational options.
To learn more about local schooling you should
contact your Mairie. Further information can be obtained on
www.education.gouv.fr or by contacting your French embassy.
Pets
If you are planning to take your favorite pet across the Channel,
it is important that you find out what the latest regulations
are. Make sure you have the correct papers, not only for France
but for the other countries you will travel through to reach
your final destination. If you are considering exporting a
pet from a country with strict quarantine regulations, ensure
you have given particular consideration beforehand. Note,
that some animals may require special import permits from
the French Ministry of Agriculture. If living permanently
in France, you may wish to take out an insurance cover for
your cat or dog.
Top Tips for Buying a French Property
Decide which area of France you would like
to live in. France is a large country so research the different
areas to help you decide which region is the one for you.
Your choice may be motivated by many criteria such as accessibility,
tourist or sporting activities, business opportunities, history
and culture. It is a good idea to pop over for a few days
to get a feel for the area you have chosen.
Be ready to secure your French property before you set off
on your viewing or buying trip. Check what options you have
to finance your purchase and if you are not a “cash”
buyer, investigate the various mortgages and rates on offer.
Consider obtaining an agreement “in principle”
from your lender. The last thing you want is to see your dream
property being snapped up by someone else after all the time
and money you have invested.
Do not leave it too late! Property prices in most French regions
are still cheap compared to the UK and other EU countries.
However, with 35,000 properties bought by Brits every year
and an estimated 2,3 million to retire abroad over the next
10 years, we expect more people will want to buy, pushing
up property prices. France is very popular with the Brits
but be aware that the Parisians, the Dutch, Germans, Scandinavians,
Swiss and even Italians have been buying up property for some
time.
Research the legal and tax implications to avoid any surprises
at a later stage. The conveyancing process in France will
be different to that of your home country. For instance, are
you looking to purchase a second home to use for holidays?
Perhaps you should consider buying with family and friends
through a SCI (société civile immobilière).
Doing this with professional legal advice will most certainly
help you to avoid future tax and inheritance tax issues.
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