Moving to France: Should you rent or buy property?

Many expats moving to France have idyllic dreams of buying and renovating an old farmhouse deep in the countryside. Others are attracted to the culture and hustle and bustle of Paris. No matter what your dream is – it’s important you familiarise yourself with the renting and buying processes in France to ensure you are making the right decision.

Should you rent or buy property in France?

Renting in France

If you are planning on living in Paris, where prices can be very high, it may be more practical to rent, rather than buy. Fortunately property law in France tends to favour the tenant. The downside is that it can be difficult to find suitable properties to rent in popular cities and neighbourhoods – which can push the rental prices up higher. The latest 2018 figures show that renting can range from 2, 200 to 4, 500 Euros a month for a three-bedroom apartment in Paris, while in a smaller city like Strasbourg the same properties can be available for 900 to 2000 Euros.

• Furnished versus unfurnished: Unfurnished properties are generally let for a minimum three-year lease term and you can often give three month’s notice to leave early, Tenancies for furnished properties are shorter with an average one-year lease term.
• Paperwork: Renting is relatively straightforward, you will tend to deal with the estate agent rather than the landlord and will be expected to provide your passport and proof of employment as well as evidence of a means of financial support (e.g. payslips, pension, tax returns). You may also be asked for a rental reference from your previous country of residence.
• Insurance: As a tenant in France, you will be required to take out home insurance against damage from water, fire and explosions. Tenants also have responsibility for minor repairs and routine maintenance.

Buying in France

The buying system in France is better regulated than in many other countries, which makes the purchase safer but more expensive. Agents charge the seller around 5-7% of the sale price – and this is usually included in the advertised price. On top of the purchase price, you need to allow for 7-10% in fees and taxes, including the notaire’s fee of around 1%.

• Agents: It is recommended you only use licensed agents who have a Carte Professionnelle and will be professionally insured and work under the Loi Hoguet – their code of conduct. These agents will be generally affiliated with a professional body.
• Mortgages: Mortgages of up to 85% are available from the big French banks as well as some international banks like HSBC and Barclays.
• Making an offer: Be aware that even a verbal offer is generally regarded as binding – but it is best to make the offer in writing. Many French buyers won’t use lawyers, but as an expat, it is safer to have an independent lawyer or your own notaire.
• Tests: Before the sale proceeds the seller will need to pay for certain tests like the Dossier de Diagnostic Technique (DDT) – covering such concerns as asbestos, energy efficiency and termite infestations.
• Next steps: Once the offer is accepted and the tests completed, you will be asked to sign the compromis de vente, drafted by the agent or notaire and pay a 5-10% deposit. The compromis will be binding, subject to agreed conditions like your mortgage being secured or planning approval. Once you have signed, you have a seven-day cooling-off period, during which you can withdraw via a registered letter and get your deposit back.
• Completion: Around 8 to 12 weeks later, the acte de vente should be ready. Once the remainder of the purchase price is transferred, this will be signed at the notaire’s On signing, you will be given the keys.

If you are a South African living in France and would like to know more about how you can maximise your finances through financial emigration, accessing your South African retirement annuity and our tailor-made tax solutions for South Africans around the world, contact FinGlobal today.