Revealed: The 'hidden' extra costs when buying property in France
Hidden extras can make that 'bargain' a bit more expensive than you first thought, while the French property-buying system contains several costs that you may not be expecting.
Properties in France, especially rural France, often look - on the face of it - very affordable. And many of them really are.
But unexpected fees can soon see the total cost rise pretty sharply to a figure much higher than the one you were boasting about to your friends.
Knowing what additional expenses to expect will - if not cushion the blow then at least ground your dreams in financial reality.
Notaire Fees
This is the big one and the name is confusing, leading many people to think this is just a few hundred euro for legal fees.
In fact, a notaire fee can be up to 10 percent of the price of the property and most of it is really a one-off property tax, similar to stamp duty in the UK.
The full amount generally comes to about seven percent of the purchase price - though this varies depending on the purchase price and the type and location of the property.
CALCULATOR: How to work out your notaire fees
The largest portion of the fee is taken up by the droits d'enregistrement, a tax on property purchases in France. This is usually around five percent of the property’s value.
The rest includes land registry costs and the notaire’s charges.
Property expert Adrian Leeds explained: "It's quite detailed, as you can imagine - this is France, right? The taxes and fees are complicated in the way they are assessed - but if there's a mortgage, then there are additional taxes and fees based on having a mortgage. That's aside from what ever the mortgage broker or bank is charging as an origination fee.
"Notaires charge additional taxes and fees if there's a mortgage involved."
The loan registration fee amounts to up to 2 percent of the loan value.
A full explanation of how notaires' fees are made up, and where all that money actually goes is available on the Notaires de France website.
Deposits
When you sign the Compromis de Vente - an agreement committing the buyer and seller to the sale of a property in principle, similar to a property in England and Wales being sold ‘subject to contract’ - the buyers are expected to pay the notaire a deposit of between five percent and 10 percent of the purchase price.
Mortgage fees
Buyers - if they need a mortgage - will probably have to put down a deposit against that, too, and it can be quite a lot - up to 20 percent of the value of the property.
Once you have arranged your mortgage there will be a fee to pay, but unlike some countries where the mortgage fee is included in the total amount you're borrowing, many French banks will expect you to pay it up front. Of course this works out cheaper in the long term as you're not paying interest on your fee, but it's another expense that you need to budget for.
Repayment terms
It’s a good idea to understand the repayment terms of your mortgage, if you have one. The higher the interest rate, the more you’ll end up paying, after all…
READ ALSO EXPLAINED: Time-frame for buying and selling property in France
Real estate agent’s commission
In France, the buyer usually - but not always - pays the real estate agent, rather than the seller. The price of the property includes the agent’s commission, which can range from 5 percent to 10 percent of the property value.
Leeds said: "Agency fees are included in the price of the property, but the mandate between the seller and the agency dictates who pays these fees, whether it's the buyer or the seller.
"When this fee is paid by the buyer, it reduces the price of the property on the deed by that amount. Notarial taxes and fees are assessed based on the net, so it reduces the notarial fees if these fees are paid by the buyer.
"But if there's a mortgage involved, the bank will not mortgage the notarial fees nor the agency fees if the buyer pays.
"If the seller pays the agency commission, the full price is shown on the deed, notarial taxes and fees will be based on the gross price and the bank will mortgage the total amount."
Look out for property adds with the mystic three-letter initialisation FAI. This stands for frais d’agence inclus, which means the agent’s fees are included in the listed price, meaning the seller will pay the agent.
Building fees
If you're buying an apartment you may also need to pay a charge - which is the building fee that covers things like external maintenance and the salary of the concierge if you have one.
Likewise if your building has a Syndic de copropriété (home-owners association) you may also need to pay a fee to join that.
Renovation fees
If you're intended to do a renovation, bear in mind that costs for building materials and tradesmen may be higher than you are expecting. The advice of pretty much anyone who has ever done a renovation project is 'double your budget'.
If you're from the UK, remember that post-Brexit restrictions on imports means it is much more difficult to save money by buying items like bathroom suites in the UK and bringing them over to France.
Property taxes
Once you are the proud owner of your beautiful home in France you’ll be responsible for a tax known as taxe foncière, a land tax paid for by the property owner. How much this is depends on the size of the property and its location.
You may also, if this is a second home, for example, face a second tax based in part on its rental value, known as taxe d’habitation. This is being phased out for main properties, but second homeowners don’t have that luxury.
Property taxes are usually not paid up front, but charged in the year after you move in, so this isn't an up-front expense but one to add to the usual costs like utilities and insurance when you are budgeting for the running costs of your new place.
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Properties in France, especially rural France, often look - on the face of it - very affordable. And many of them really are.
But unexpected fees can soon see the total cost rise pretty sharply to a figure much higher than the one you were boasting about to your friends.
Knowing what additional expenses to expect will - if not cushion the blow then at least ground your dreams in financial reality.
Notaire Fees
This is the big one and the name is confusing, leading many people to think this is just a few hundred euro for legal fees.
In fact, a notaire fee can be up to 10 percent of the price of the property and most of it is really a one-off property tax, similar to stamp duty in the UK.
The full amount generally comes to about seven percent of the purchase price - though this varies depending on the purchase price and the type and location of the property.
CALCULATOR: How to work out your notaire fees
The largest portion of the fee is taken up by the droits d'enregistrement, a tax on property purchases in France. This is usually around five percent of the property’s value.
The rest includes land registry costs and the notaire’s charges.
Property expert Adrian Leeds explained: "It's quite detailed, as you can imagine - this is France, right? The taxes and fees are complicated in the way they are assessed - but if there's a mortgage, then there are additional taxes and fees based on having a mortgage. That's aside from what ever the mortgage broker or bank is charging as an origination fee.
"Notaires charge additional taxes and fees if there's a mortgage involved."
The loan registration fee amounts to up to 2 percent of the loan value.
A full explanation of how notaires' fees are made up, and where all that money actually goes is available on the Notaires de France website.
Deposits
When you sign the Compromis de Vente - an agreement committing the buyer and seller to the sale of a property in principle, similar to a property in England and Wales being sold ‘subject to contract’ - the buyers are expected to pay the notaire a deposit of between five percent and 10 percent of the purchase price.
Mortgage fees
Buyers - if they need a mortgage - will probably have to put down a deposit against that, too, and it can be quite a lot - up to 20 percent of the value of the property.
Once you have arranged your mortgage there will be a fee to pay, but unlike some countries where the mortgage fee is included in the total amount you're borrowing, many French banks will expect you to pay it up front. Of course this works out cheaper in the long term as you're not paying interest on your fee, but it's another expense that you need to budget for.
Repayment terms
It’s a good idea to understand the repayment terms of your mortgage, if you have one. The higher the interest rate, the more you’ll end up paying, after all…
READ ALSO EXPLAINED: Time-frame for buying and selling property in France
Real estate agent’s commission
In France, the buyer usually - but not always - pays the real estate agent, rather than the seller. The price of the property includes the agent’s commission, which can range from 5 percent to 10 percent of the property value.
Leeds said: "Agency fees are included in the price of the property, but the mandate between the seller and the agency dictates who pays these fees, whether it's the buyer or the seller.
"When this fee is paid by the buyer, it reduces the price of the property on the deed by that amount. Notarial taxes and fees are assessed based on the net, so it reduces the notarial fees if these fees are paid by the buyer.
"But if there's a mortgage involved, the bank will not mortgage the notarial fees nor the agency fees if the buyer pays.
"If the seller pays the agency commission, the full price is shown on the deed, notarial taxes and fees will be based on the gross price and the bank will mortgage the total amount."
Look out for property adds with the mystic three-letter initialisation FAI. This stands for frais d’agence inclus, which means the agent’s fees are included in the listed price, meaning the seller will pay the agent.
Building fees
If you're buying an apartment you may also need to pay a charge - which is the building fee that covers things like external maintenance and the salary of the concierge if you have one.
Likewise if your building has a Syndic de copropriété (home-owners association) you may also need to pay a fee to join that.
Renovation fees
If you're intended to do a renovation, bear in mind that costs for building materials and tradesmen may be higher than you are expecting. The advice of pretty much anyone who has ever done a renovation project is 'double your budget'.
If you're from the UK, remember that post-Brexit restrictions on imports means it is much more difficult to save money by buying items like bathroom suites in the UK and bringing them over to France.
Property taxes
Once you are the proud owner of your beautiful home in France you’ll be responsible for a tax known as taxe foncière, a land tax paid for by the property owner. How much this is depends on the size of the property and its location.
You may also, if this is a second home, for example, face a second tax based in part on its rental value, known as taxe d’habitation. This is being phased out for main properties, but second homeowners don’t have that luxury.
Property taxes are usually not paid up front, but charged in the year after you move in, so this isn't an up-front expense but one to add to the usual costs like utilities and insurance when you are budgeting for the running costs of your new place.
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