When it comes to buying property in France, more often than not, people find themselves paying more than they should. Unexpected additional costs, buying at the wrong time, or being unsure of the local market can all drive costs up.
So we’ve looked at how to make your money go further with our tips on how to save money when buying property in France.
Know the Local Market and Negotiate the Best Price
While property prices in France are traditionally cheap (at least compared with the UK), this of course depends greatly on where in the country you’re looking, and prices can vary significantly from one region to another.
For instance, while the average national house price was €2,276 per square metre in 2020, this rises to over €10,000 per square metre in the areas around Paris.
While you might have your heart set on a particular region, you may find a property for a fraction of the price in a comparable area, so be sure to thoroughly research your options.
Doing your due diligence as you research the local market will also stand you in good stead when it comes to negotiating the best price with a seller. You may not be able to net a massive reduction, but it’s always worth trying.
Avoid New Builds
It’s worth noting that buying a property in France that is less than five years old is subject to VAT, which amounts to just over 20% of the value of the property.
Some properties of this type will be listed as HT, or ‘hors taxes’, which means this VAT is not included in the price, while those with TTC or ‘toutes taxes comprises’ means this has already been included.
Conversely, you can save money by buying a property more than five years old to avoid the added VAT cost, but be aware these are subject to separate taxes which generally run at about 9%.
Consider the Fees Involved when Budgeting
In France, the buyer covers all the fees when purchasing a property and you should always account for these in your budget.
If you’re going through an estate agent to buy your French property, you can expect to pay commission of around 6-10% of the property price. While this is normally included in the listed price, it’s always worth checking to be sure.
Buyers are also required to cover the notaire’s fees, which are generally between 6% and 8% of the property’s value, and are rarely included in the listed price.
As a foreign buyer, you may also want to hire your own legal representation and a local translator to help you navigate the buying process, which you’ll also need to add in your budget.
Use a Specialist Transfer Provider
Getting a more competitive exchange rate and timing your transfer is an effective way to maximise your budget for buying a property in France. Currency markets are notoriously volatile and can have a big impact on your money transfer abroad.
For instance, at the start of January 2021 the GBP/EUR exchange rate was €1.10. If you transferred £300,000 to buy a property you would have received €330,000.
However, four months later the Pound Euro exchange rate hit €1.17. Seven cents may not sound like much but on the same transfer you would have received €351,000, a difference of €21,000.
When making an international money transfer, many people mistakenly use their high-street bank, unaware that they could get more for their money with the help of a leading currency specialist like TorFX.
By using an expert currency provider you can avoid the additional transfer fees banks often charge, and TorFX can help you secure a more competitive exchange rate to get the best return on your transfer.
In addition, TorFX also offers a range of services which can help your money go even further.
For example, a forward contract allows you to fix an exchange rate for up for a year, which would protect you from any unfavourable shifts in the currency market, although you’d miss out if the exchange rate strengthened.
Limit orders are another popular service, where you target an exchange rate above the current market rate and the transfer is made automatically if the exchange rate hits that level. This is useful if you don’t need to make a transfer immediately and have time to hold out for a better exchange rate
Always to be sure to consider your transfer options early so you have the best chance to maximize your returns when moving money to France to purchase your dream property.
This article was provided by TorFX – a leading international currency transfer specialist, winner of Moneyfacts Consumer Award, ‘Best International Money Transfer Provider of the Year’ for 6 years running (2016-2021).
TorFX have been helping people save time and money on currency transfers to France since 2004 and they have an ‘Excellent’ rating on Trustpilot. Find out how much you could save by getting a free quote now.