Horizon Property Investments
Luxury property in France

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Frequently asked questions

Welcome to the Horizon Property Investments Help page. You can browse through some of the most popular questions below or read our detailed Luxury Property Buying Guide for France in our Advice section. If we have not covered your question below, or in not enough detail, please take a look at our Advice section for more information, or please feel free to contact us with the question you have and we’ll be happy to answer.

What restrictions are there on foreigners purchasing and owning luxury property for sale in France or Monaco ?

Anyone can buy a property in France or Monaco, without restriction

Do I have to pay tax on any rental income if I buy a luxury villa or luxury apartment in France ?

Yes you do. All rental income in France is subject to tax and you must declare this to the French Tax Office by 30th April each year. For amounts under 75,000 Euro’s, per annum, you can simply pay tax on 30% of the gross income, the other 70% being allowed to cover your expenses.

For amounts greater than 75,000 Euro’s, all your business expenses including running costs, mortgage interest payments, insurance and depreciation are included, with your final net income taxed at a minimum level of 25%.

Am I liable to pay Capital Gains Tax on reselling, if I buy a luxury property in France 

Yes you are. All owners of French property, be they residing in France or not, are liable to Capital Gains Tax when they come to sell.

Your Capital Gains Tax is calculated as the difference between purchase price (plus any renovation work completed) and the sale price. The gain is then taxable at a set rate of 16% for European’s (extra 10% Social tax for French Residents) or flat 33% for non Europeans. The new rules state, renovation work is that completed by a French artisan, having produced an invoice for the work.

There are however deductions based on how long you own the property. There is no deduction for the first 5 years of ownership, but every year from then on allows you to deduct 10% off your Capital Gain.

If you own your property for more than 30 years, you are free of Capital Gains Tax, but you will still be liable for tax in the UK.

What are the annual running costs and taxes of owning a luxury property in France?

For your taxes, there are two local property taxes in France levied towards the end of each year and are based on the administrative value of your property, calculated by the Public Administrator at the beginning of each year (“Cadastral value”)

  • “taxe fonciere” (exempt for the first 2 years in a new build)
  • “taxe d’habitation”

If you plan to buy a re-sale property, these tax figures are readily available and can be obtained for you when you decide on the property you wish to purchase.

It is very difficult to calculate and provide an estimated general “rule of thumb” figure for the annual service charges, as this depends on the size of the apartment/chalet you purchase, as well as extraneous costs such as lift, any shared swimming pool, caretaker and need for a grounds man (snow clearing / grass cutting).

We would be happy to provide an estimate of these costs on the specific French property you are interested in, to assist you with your decision making process.

Can you rent a property you purchase in France to help with the annual running costs & taxes?

Yes you can, there are no restrictions on renting a property in France.

Tourism and travel remains a top industry of the country, where an ever growing number of individuals and families are heading for holiday and vacation purposes.

Your rentals can be done either on a 'short-term' or long term basis. If you opt for the short term, this is usually weekend(s) and/or a week at a time, especially holiday weeks. Long term would be for the entire season (such as all summer or fall).

Generally rentals are based on how many 'beds'/ number of people that can sleep at your property as well as any amenity that the property has...like swimming pool, outside entertainment area, hot tub, convenience to a resort, etc.

It is important however to remember that both French  and non French residents must pay income tax on rental income annually.

Can a verbal offer be made on a property in Monaco?

No negotiation can start in Monaco without a written offer.

Are there any regulations on what I can and can’t purchase in France?

No.

Can a non French resident get a mortgage to buy a luxury French apartment or chalet?

Yes it is possible for you as a non France resident to obtain a mortgage through one of the many banks in France. Interest rates have historically been lower in France than the UK, making it actually good sense as part of your purchase process.

Normal LTV’s range between 60 – 70%, however thanks to our good working relationship with a number of different brokers, mortgages with a LTV of up to 80% are possible to you, depending on the property and your financial circumstances.

A mortgage registration levy of 1% will be charged on all mortages, on top of any notary fees.

What is the purchase procedure for buying luxury properties in France?

Once you have found the French property for sale you wish to purchase and you’ve paid a deposit (where applicable), you will appoint a Public Notary who acts on behalf of both yourself and the seller.

He or she will draw up all the legal documents needed for the purchase, which will be in two parts. Firstly you sign an Compromis du Vente ( or reservation agreement if an off plan property ), which is then countersigned by the seller and returned to you. At this stage a 7 Day Cooling Off period begins, where you can withdraw from the sale and have you deposit fully refunded, for any reason whatsover.

The second stage, which usually follows approximately 3 months later is the Deed of Sale, which is the final contract, confirming you as the owner of the property.

Should you not be able to return easily to sign the Deed of Sale and wish to sign by proxy, you can either complete the necessary paperwork in either your own country of origin or when visiting France at the time of looking for property.

If arranging a Proxy in the UK, you will need to go to your local Notary Public (not a Lawyer) with the relevant documents (these will be sent to you) and sign in their presence, as well as providing copies of passport(s). In the UK, the Foreign Office is legally required to counter stamp these documents, validating the Notary Public.

How much deposit is normally requested once an offer has been accepted in Monaco?

10% is the usual amount requested.

In Europe, measurements of property are in m², while I am used to Sq ft. How do I convert one to the other?

This is very easy to do. For quick conversions, switching from Sq ft to m², you simply divide by 10 and from m² to Sq Ft multiply by 10. For more accurate conversions, you can use the formula 1m² = 10.76ft².

What information do I need to provide to help with my search for a luxury property in France?

To ensure any time you spend reading property details and any subsequent inspection visit you make is worthwhile, you need to ensure you provide as detailed a profile as possible of what you are looking for. Questions that you should have answers to include:

  • How much do you want to spend?
  • Any specific resorts you are interested in?
  • How far you want the resort to be from an airport?
  • Location and proximity in the resort (close to a beach, views of the sea etc)?
  • Do you want a family orientated resort?
  • Type of property you want (Villa/House or apartment )?
  • Number of bedrooms/bathrooms you require?
  • Size of the property you desire?
  • Do you want to rent when not using it?

These answers then allow us to provide you only with properties that are right for your search requirements in the correct locations.

Disclaimer

Please note these questions / answers have been documented as a guide only. Each Country, State, Province, Canton and Region applies different rules and regulations pertaining to the purchase of property. It is not possible to cover every single circumstance in these pages.

We recommend you take further advice with the Lawyer / Notary handling your purchase, as well as the relevant Accountant, Tax Specialist or Rental Agency on anything you wish clarified, before signing any contract of sale as we cannot be held legally responsible.

For more information on our properties in the South of  France and Paris please visit our properties for sale.