Complete guide for Americans: Investing in real estate and moving to France

France, and particularly the Côte d'Azur, with its rich history, diverse culture and enviable quality of life, is attracting more and more Americans looking to invest in real estate and settle in our beautiful region. However, before taking the leap across the Atlantic, it's essential to be well prepared and to understand the specifics of the French real estate market, as well as the practicalities of living in France.

Here's a guide to help you get started on your real estate project in France.

How to buy real estate in France for an American?

Before you get started, it's essential to understand the French real estate market. The Côte d'Azur, in particular, can vary considerably in terms of price, depending on the city, proximity to the sea, and other factors. Do your research thoroughly and, if possible, consult an experienced local real estate agent.

To find out more and get help with your search, contact one of our expert Côte d'Azur agents.

Defining your real estate investment objectives

It's important to identify the objectives of your real estate purchase. Do you want to buy a second home, invest in a rental property or consider a long-term relocation? Your objectives will influence the type of property you're looking to buy.

In fact, we might talk about a "coup de coeur" purchase for a relocation, whereas we'll pay much more attention to the technical and economic aspects of a property if it's a second home that we'll be offering for rent outside the periods when it's occupied.

Surround yourself with professionals: lawyers, chartered accountants and real estate agents

French real estate legislation is complex, so it's advisable to consult a lawyer specializing in real estate law and a chartered accountant to guide you through the purchase process, including the tax implications.

Familiarize yourself with the buying process in France, which includes signing a compromis de vente, legal verifications and closing the transaction. A clear understanding will avoid surprises.

The main surprise for a foreigner lies in the procedure and the parties involved in the transaction. In France, for example, it seems unavoidable to use a notaire to buy or sell a property. This is not the case everywhere in the world, far from it. In the United States, for example, all this is unrestricted, and a buyer can also call on the services of a lawyer. The steps involved in the real estate transaction itself are the same as for a French buyer.

Our experts at Côte d'Azur Sotheby's International Realty have the necessary experience to support any real estate transaction, whatever your nationality or country of residence for tax purposes.

One of the strengths of the Sotheby's International Realty network is its international character. These professionals will also be there to help you better understand the costs associated with buying real estate in France.

Indeed, you need to take into account additional costs such as real estate agency fees, notary fees, property and housing taxes, and condominium fees if you're buying in a condominium building.

Obtaining a bank loan in France for foreigners

If you need financing for your purchase, explore your mortgage options. Interest rates in France may differ from those in the U.S., so check with several local banks.

We can also refer you to banking professionals like Fortier Finance, with whom we work in partnership and who can do this comparison work for you.

How do you know exactly where to invest?

Choose your property location wisely. The Côte d'Azur offers a variety of options, from bustling cities like Nice, Saint-Tropez or Cannes to picturesque villages in the hinterland.

If you don't have a specific location in mind for your property purchase project on the Côte d'Azur, don't hesitate to discuss your expectations with your real estate agent. As an expert in the region, he or she will be able to advise you on the type of property and location that best suits your expectations and lifestyle.

To be accompanied in your search, contact one of our Côte d'Azur experts.

What are the tax rules for Americans buying in France

France has specific tax rules for foreign owners. You will be subject to property tax and housing tax. It's important to understand these tax obligations and budget for payments. The purchase of real estate in France by Americans is subject to certain tax rules. Please note that tax laws evolve, so it's essential to consult a tax expert or lawyer specializing in this area for up-to-date advice specific to your situation.

However, here are some general points to consider:

1. Capital gains tax: When a property is sold in France, any capital gains realized may be subject to capital gains tax. Tax rates vary according to the length of time the property has been held. For non-residents, a rate of 19% is generally applied.

2. Impôt sur la fortune immobilière (IFI): If the net value of your real estate assets in France exceeds a certain threshold (usually 1.3 million euros), you may be liable for the IFI, a tax on real estate wealth in France.

3. Rental income tax: If you rent out your property in France, you will be subject to rental income tax. Rental income is generally taxed at the progressive French income tax rate.

4. U.S.-France tax treaty: The U.S. has signed a tax treaty with France to avoid double taxation. This treaty may have an impact on how your real estate income and gains are taxed. It is important to understand the provisions of this treaty and to determine whether you are eligible for specific tax credits or exemptions under it.

5. Tax declaration in France: You will need to declare your real estate income and gains in France. If you are a non-French tax resident, you will generally need to file a specific non-resident tax return.

6. Other local taxes: In addition to capital gains tax and IFI, you may be subject to other local taxes, such as taxe foncière and taxe d'habitation. These taxes are based on the cadastral rental value of the property.

It is strongly recommended that you consult a tax expert or lawyer specializing in international tax issues for advice specific to your situation. Tax rules can be complex, and proper tax planning can help you minimize your tax burden while remaining compliant with French and US laws.

What about the exchange rate?

Since you'll be making financial transactions in euros, keep a close eye on exchange rates. You might consider using specialized foreign exchange services to minimize costs.

How can you ensure the security of your property in France?

Finally, make sure you protect your investment by taking out appropriate home and civil liability insurance. What's more, think about securing your property in your absence by having your property fitted with a security system or taking out a security guard contract.

Living in France after your property purchase

Before settling in France, it's important to familiarize yourself with the formalities of residency rights on French territory as well as daily life in France.

What are the visa rules for Americans buying in France

Americans staying in France for more than 90 days need a long-stay visa or titre de séjour. Make sure you understand the requirements and deadlines for obtaining these documents.

If you are buying a second home in France and plan to come for periods of less than 90 days per 6-month period, you do not need a visa.

For more information on visas and their prerequisites, contact the French embassy in Washington or New York.

Bank account

To facilitate your day-to-day expenses in France as well as the payment of your bills, we recommend opening a bank account in France. Here again, our agents will be there to guide you through this process.

The French language

The main language spoken in France is French. Although many people speak English, especially in a tourist region like the Côte d'Azur, learning French will make your integration much easier.

The healthcare system

In France, the healthcare system is generally of a high standard, but it is compulsory to take out health insurance. You can either opt for French Social Security (if you work in France), or obtain private insurance if you don't qualify for Social Security.

If you are eligible for Social Security, it is advisable to also take out a mutuelle, i.e. additional private insurance to cover all your health expenses more extensively.

Culture and customs

Learn about French culture, including social norms, food customs and local celebrations. You'll soon develop a taste for café terraces and morning market strolls.

Education

In France school is compulsory from age 3 until the age of 16. If you have children, find out more about the French education system and local schools.

There are both public (state-funded and therefore free) and private (and therefore fee-paying) schools in France. In fact, the Côte d'Azur boasts a large number of renowned international schools, including the world-famous Mougins school.

Driving license

If you plan to drive in France, make sure you understand the local driving rules and check whether your US driver's license is valid in France.

Buying property on the French Riviera is an exciting adventure, but it requires careful planning and a thorough understanding of the process. By following these tips, you'll be better prepared to realize your real estate dream in France while minimizing potential risks.

Contact us to start your research and your real estate project on the Côte d'Azur.

+33 4 92 92 12 88

info@cotedazur-sothebysrealty.com

Article written in September 2023