French Property Frequently Asked Questions

 

Before making your purchase on the Cote D'Azur, I am sure you will have many questions about such things as the buying process, the property market in France and costs involved.

 

We have the experience and the expertise to help you find the answers.

 

Why choose the Cote D'Azur?

Since the late 60's, the Côte d'Azur has been a favorite destination for holidays and for people looking for a holiday or retirement home ~ well nothing has changed!

 

With the vibrant city of Nice, France's 5th largest, the beautiful ports of St Tropez and Antibes, the classy city of Cannes, home to the world famous film festival and the unrivalled principality of Monaco, to its name, people for decades have fallen in love with its breathtaking scenery and typically relaxed French way of life.

 

Whether it is sun, golf or water sports you are seeking, a vibrant or tranquil setting, the French Riviera has it all. Nowadays you can add to that an excellent capital appreciation on your property and a rental market second to none ~ come and see for yourself.

 

New / Old Apartment / Villa?

Whether you choose new or old, apartment, house or villa, you can be certain of two things, firstly that your property will go up in value and secondly that you will be able to rent it out, should you wish, for a very good rental return ~ so which do you choose?

 

New or Off Plan

A new apartment or villa is generally one which is either being built or about to be built and while modern properties may lack the charm and character of older buildings, they do offer attractive financial and other advantages, i.e.

• A lower deposit ( 5% rather than 10%)
• Lower buying costs (new 4 / 5% ~ old 8 / 10%)
• Lower registration taxes ( new 0.6% ~ old 4.89%)
• 2 years exemption from property tax ( foncière tax)
• A 10 year guarantee
• Higher construction standards and therefore lower maintenance costs
• Better insulation and therefore lower heating bills
• Greater resale potential, especially to the French who prefer newer buildings.
  

 

With a new property, the building price is fixed and it is often cheaper to buy a new home than restore an old one because when you decide to renovate or buy an older property, the maintenance and restoration costs are not set and can often soar.

 

Security is also a prime consideration in all new properties in France and the majority of new developments have security gates, security blinds and other security features.

 

The standard of all new properties in France is strictly regulated and as well as a 10 year guarantee you also get a 2 year snagging guarantee it is against the law to sell a house in France without a warranty.

 

Resale Property

A resale property is more often than not, one that is built and you are buying from the present owner. The advantages of this are:

• The property is ready now
• There is not VAT of 19.6% to pay
• Resale properties built a few years ago are usually bigger than modern ones
• The garden and grounds are more mature
• The garage is usually included unlike a new property where you pay for it separately
• The kitchen is already fitted in the price If newly bought you choose your own fittings
  

 

With a resale property you are seeing exactly what you will get and the previous owner may have made improvements to the property.

 

Whichever type of property you decide to buy, you can be sure of one thing with our help, the capital appreciation in the South of France and the extremely high demand for rental property, you are definitely making the right decision.

 

On returning home you then have 3 to 4 days to transfer the rest of your 5% reservation deposit to the developer in France. At this stage you have entered a "compromis de vente" (an agreement to purchase) and this money is put directly into an ecru account in your name and is totally safe.

 

The next stage is when you go to the notaries, usually within 1 to 3 months of signing the reservation contract, and sign your contract or "acte de vente". A notaire is a French government official whose sole aim is to make sure the contract is signed and carried out according to French law and usually makes up 3% of the buying costs.

 

From then on you are contracted to make regular stage payments, which are laid down by French law and are tied in to the stages of construction, up to and including the final 5% which is due when you receive the keys to your new property. It is worth noting here that if you are buying the property with the help of a mortgage, again French law protects you the consumer, by guaranteeing every payment so that should something happen to the developer during construction, the bank will appoint another developer to ensure completion of the project.

 

What is an Investment Trip?

An inspection flight usually lasts 2 to 4 days and involves a trip to the South of France to view properties and become familiar with the area in which you are going to purchase. A professional from our marketing department, based in Corporate Head Quarters, will arrange every last detail for you, based on the information you give us.

 

You will be met at Nice airport, usually on a Thursday or a Monday and taken to your accommodation in a local hotel. The next 2 or 3 days would involve viewing properties that suit your requirements, leaving you the evenings to enjoy the way of life in one of the world's most beautiful and famous areas. In 99% of these trips our clients have usually found their perfect property within 1 ½ days of arriving.

 

The price of the inspection flight varies depending on the time of year but is usually between €140 to €250. The clients are then driven back to the airport for their flight home. Rest assured that all the hotels chosen for our clients have been inspected by our staff and are never lower than 3*. Also you will be shown properties in the comfort of an air-conditioned vehicle, by one of our enthusiastic and professional representatives.

 

Click here to book an inspection trip to the south of France.

 

Is my money safe?

France is probably the safest place in the world to buy property as there are so many strict laws in place, all with one aim ~ to protect you the buyer. As I have already mentioned your 5% reservation deposit is not paid into the developers account but into an ecru account in your name so that if anything happens to the developer, your money is safe and still in your name.

 

Even once you have been to the notaire and signed your "acte de vente", your money is protected because every stage payment carries a bank guarantee to ensure completion of your property. Should you wish to take the guaranteed rental route you are even protected with that because all the guaranteed rental payments have to be underwritten in French law by an insurance company. So as you can see, there could not be a safer place to invest in the property market than France.

 

How can I rent my property out?

There are two main ways of renting out the property you buy in France:

 

Guaranteed rentals

At present in the South of France there are not enough properties to satisfy the demand for the area, such is the popularity of the Cote D'Azur.

 

Therefore with virtually every development we will show you, there are local agencies who will offer you a guaranteed rent on your property for a term of 3, 6, or 9 years and take the worry and hassle of renting privately off you. The South of France has 12 to 14 weeks of high season but in places like Cannes or Monaco which play host to the Film Festival and the Grand Prix respectively, this can extend to 16 to 18.

 

The amount of rent you could receive is between €800 to €1200 per month as an average but higher in the peak season, which can comfortably cover the cost of any mortgage you take out and you still have the use of your property for certain weeks of the year. The agency will take care of the cleaning of your apartment and make sure it is correctly maintained.

 

Obviously they charge for these services, usually between 8 / 15%, but for the piece of mind and the guaranteed regular income, it is worth considering this option.

 

Private rentals

Obviously if the guaranteed rental agencies are offering you a monthly amount for renting your property, they are not doing it for free and are making a profit themselves. Therefore a lot of people decide to arrange their own rental customers.

 

This can be done through newspaper advertising, friends and family, notes in shop windows and for the adventurous, setting up your own web site. If it works you will obviously get a much better return by cutting out the middle man but it is a lot more time consuming and risky way of doing it.

 

While you can employ a management company to look after the running of the apartment, you still have to get your clients and if the property is not rented for a week or two, you are not earning.

 

You will pay tax in France on any rental income you receive but against this you can offset the interest element of your mortgage, not the capital, as well as depreciation on your furniture and refurbishments.

 

Whichever type of renting you choose, guaranteed or private, it will be a very profitable way of making money out of your investment in the South of France, while still having the opportunity of spending a few weeks yourself soaking up the sun, atmosphere and lifestyle of one of the most beautiful regions in the world.