A founder member of the EU, France is the UK’s nearest European neighbour and a popular holiday destination and place for investment.
It’s coastline borders the English Channel, Bay of Biscay and Mediterranean while it has land borders with Switzerland, Italy, Belgium, Luxemburg, Germany, and Spain.
The country is divided into twenty two regions and ninety six departments. Alsace, Aquitaine, Auvergne, Basse-Normandie, Bourgogne, Bretagne, Centre, Champagne-Ardenne, Corse, Franche-Comte, Haute-Normandie, Ile-de-France, Languedoc-Roussillon, Limousin, Lorraine, Midi-Pyrenees, Nord-Pas-de-Calais, Pays de la Loire, Picardie, Poitou-Charentes, Provence-Alpes-Cote d’Azur, Rhone-Alpes. The landscape and climate varies considerably across the country, from the rugged crispness of the Alps to the gentle atmosphere of Provence.
Famously agricultural, France also has a variety of modern and hi-tech industries. The Government has stakes in a number of major companies and a significant proportion of the workforce comprises public sector employees who enjoy relatively generous benefits and pension arrangements. There is a current national debate about the sustainability of current pension arrangements.
Northern France – especially Normandy and Brittany, and the Dordogne – have been especially popular with a growing number of Britons buying property in France. That number has increased significantly over the last five years and it is estimated that there are now as many as 500,000 British owners of French properties. The increase has coincided with rises in French house prices and has been reported as causing friction in some areas.
According to the Royal Institute of Chartered Surveyor’s 2005 European Housing Review, France was one of the three European countries in which house prices maintained double digit rates of inflation throughout last year – the others were Spain and Ireland. Prices of existing housing rose by about sixteen per cent over the year and new housing by about ten per cent.
There is no restriction on UK citizens buying property in France although care has to be taken over tax, legal and inheritance issues. In general realised short term capital gains are likely to be taxed more heavily than in the UK, while inheritance rules require a proportion of the value of property to be passed on to children (although there are legal devices available to delay this in favour of a spouse or partner).
In transferring a property both the buyer and seller must use a notaire (a state appointed lawyer who usually acts for both sides) although they can if they wish also seek additional legal advice. The notaire’s fees plus stamp duty are likely to come to between six per cent and eight per cent of the price. In some instances estate agents’ fees, which can be as high as ten per cent, are also payable by the buyer.
Buyers should be warned not to commit themselves to a purchase before they intend. A compromise de vente, often presented by an estate agent, is a legally binding agreement to purchase – although there is a brief cooling off period allowed after signing during which the agreement can be nullified. A deposit of about ten per cent of the purchase price will be required at this stage.
Completion of the purchase transaction will usually involve attending the notaire’s office to hear the contract read through (very quickly).