Should you buy property in France?
While several European housing markets have suffered severe fluctuations from the financial crisis, the French property market has emerged as one of Europe’s core performing property markets, with considerable real estate investment in 2015 particularly in Paris. Other popular areas included the Alps, the Côte d’Azur, Aquitaine, Languedoc-Roussillon and Cognac.
For British expats in France, although the UK has indicated its intent to withdraw from the EU, the actual exit process could take as long as two years to formalise. In the interim British expats should be unaffected, with the exception of the devaluation of the pound making French property more expensive. But the French have long welcomed foreign investment in their real estate markets, and some local authorities have called for France to offer British expats some sort of deal.
While some potential buyers may be motivated to pull back from the market, many French are becoming increasingly optimistic as property prices stablise. According to the 2016 real estate association FNAIM, 7 out of 10 French ‘feel that the time is right to purchase real estate’. FNAIM experts estimate average property prices in France could decrease by 1–5 percent by the end of 2016, except in major cities where they will likely see price increases between 3 percent and 8 percent.
Foreigners, however, should be aware that property transaction fees total around 10–15 percent of the purchase price and capital gains tax applies if you sell the property (around 35–40 percent), factors particularly important for those planning stays of less than five years who might not be able to offset the costs in a short time.