General country information
A founder member of the EU, France is the UK’s nearest European neighbour and a popular holiday
destination and place for investment.
The French coastline borders the English Channel, Bay of Biscay and Mediterranean while it has land borders with Belgium, Luxemburg, Germany, Switzerland, Italy and Spain.
The country is divided into 22 regions and 96 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.
Although famously agricultural, France also has many 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.
During the housing boom (1997-2007) French house prices surged by 150% (112.5% inflation-adjusted). However, the housing market started to weaken in 2008, mainly due to the global crisis. House prices fell by 3.82% (-5.48% inflation-adjusted) in 2008 and by another 4.07% (-4.41% inflation-adjusted) in 2009.
Following a dip in 2008 and 2009 the housing market bounced back strongly in 2010, with house prices rising by 7.57% (5.82%). In 2011 however, the housing market started to slow, with house prices rising by just 3.66% (1.19% inflation-adjusted), mainly due to the adverse impact of the eurozone debt crisis.
In 2012, the total number of existing homes sold in France fell by 11.9% y-o-y to 709,000 units, according to the Conseil général de I’environnement et du développement durable (CGEDD).
Construction activity is also down. The total number of authorized houses in France fell by 7.3% to 495,496 units in 2012 from the previous year, according to the Ministère de l’Écologie, du Développement Durable et de l’Énergie. Likewise, the number of houses under construction also dropped 17.8%, to 346,463 units in 2012 from a year earlier.
France’s housing market is expected to remain depressed in 2013, as economic conditions worsen, though the economy is expected to grow again after seeing no growth in 2012 showing reasons for optimism..
Property purchase costs can be high in France ranging from 8.38% to 29.41%. New properties have the highest costs because of the 19.6% VAT but this is slightly offset by a lower registration fee. Real estate agent fees range from 3% to 10% typically split between buyer and seller.
Rental income tax is surprisingly low with the effective rate of tax on gross rental income accruing to non-resident foreigners likely to be around 10.00% on an income of €1,500/month. Capital gains are generally taxed at 19% for EU citizens, 33.33% for non-EU citizens.
There is no restriction on UK citizens buying property in France although care has to be taken over tax, legal and inheritance issues. 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 6 per cent and 8 per cent of the price. In some instances estate agents’ fees, which can be as high as 10 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 10 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 (at rapid rate).
With easy access from the UK, France will always be a popular choice for property investment and with prices currently subdued, 2013/2014 could be an opportune time.
Area: 543,965 sq km
Population: 65.44m (July 2012 est.)
Principal cities: Paris, Strasberg, Lyon, Bordeaux
Median age of population: total: 38.6 years, male: 37 years, female: 40.1 years (2004 est.)
Language: French 100%, rapidly declining regional dialects and languages (Provencal, Breton,Alsatian, Corsican, Catalan, Basque, Flemish)
Employment rate: 90.3%
Flying time from UK: Paris – 0.32hrs Bordeaux and Lyon – 1hrs
Currency: 1 euro (EUR) = 100 Cents
Time difference from UK: Paris – UTC/GMT +2 hour
Rate of inflation: 0.75% (2012 est.)
International dialling code: +33
GDP per person: $42,377
Climate: Average annual rainfall 587 mm