Buyers’ FAQs for France

You can borrow up to 85% of the purchased price for a freehold property. EU citizens can borrow up to 80% for leasehold. If you are a non-EU citizen (which applies to UK buyers) the maximum is 70%.

As with all lenders, French mortgage interest rates continually change, depending on the wider economic situation. There is a wide range of mortgage types available.

The majority of French mortgages usually last between 15-25 years, although you may be able to secure a longer repayment period depending on the lender and your circumstances.

Typical mortgage types you’ll find in France include: Variable rate Fixed rate Capped rate Capital repayment Interest only

To rent out your property in France you must first inform the local town hall, before applying for a non-professional Siret number which proves you are officially registered to rent your property. You can then contact a reputable agent who can help you market the property and find suitable tenants. Any rent income you receive will incur taxes that must be paid every year.

If you buy a leaseback property, you will have a rental obligation attached to your property and will be limited in the amount of time you can spend in your apartment each year.

France has a thriving property market and with the right investment, property owners can enjoy stable, long-term yields on their properties.

France enjoyed a strong recovery from the COVID-19 pandemic, growing 7% in 2021 and virtually erasing the economic crisis faced by the country a year earlier. Historically, France has one of the strongest economies in the world and can provide a lot of interesting opportunities for property investors.

There are no restrictions on buying a property in a company name in France. An SCI (‘société civile immobilière’) is the most common method used, but it is advised to speak with a reputable agent who can help choose the right option from the likes of EURLs, SARL and SARL de famille.

Costs vary but, for example, you can expect to pay around 1,000€ for an SCI, along with an 800€ maintenance fee every year.

Buying a property in France in a company name is tax efficient, giving you a 10% reduction in the taxable amount of the property for Inheritance Tax (if you plan to transfer ownership) and Wealth Tax. You can transfer ownership tax fee by transferring shares and you must have at least 2 business partners to purchase the property.

Local property taxes in France require you to pay ‘taxe d’habitation’ and ‘taxe foncière’ which are both due around October/November. These are based on the property’s cadastral value and differ depending on the region it is located in.

If you are non-resident you can expect to pay a flat rate of 20% on your property income. However, there are some deductions to be considered

VAT refunds are available, although only under certain conditions. For example, you can reclaim the 20% VAT on the price of a new-build property if you sign up to a professional rental management service.

Capital gains tax in France stands at a flat rate of 19%, with social changes applied at a flat rate of 17.2%, which equals a total of 36.2%. However, a reduced social change rate is available for EU and UK residents and after 22 years of ownership your property will no longer be subject to capital gains tax. Between 6 and 21 years of ownership, a progressive allowance increasing by 6% each is allowed, capped at 96%.

Wealth tax is another tax to be aware of, although non-residents in France only need to pay this on physical assets rather than financial investments. When net real estate wealth exceeds 1.3 million euros, tax is then payable and is applied on net assets above 800,000€. As an example, if you borrowed 80% to purchase the property and it is valued at more than 4 million euros, tax will be payable if the equity is more than 800,000€.

You can become a resident in France if you want to stay in your property for more than 90 days a year. This requires you to apply for a visa/residency and after 10 years you can apply to become a citizen. Depending on the level of investment you have made, this could be shorted to 5 years.

For UK citizens, once you have purchased a property you can stay in the country for a maximum of 90 days within a 180-day period. You will need to apply for a long-term visa if you wish to stay for longer.