caramellos
6/15/2016 01:09 EST
Hi again,
My partner and I are homeowners in the UK, and while he grew up with the concept that flat living was the way to go and big cities were preferable, after having found enjoyment in the sleepy village near a big city nature of our current location and feeling the frustration of confined UK housing, we are certainly keen to purchase a house outside of Paris in a relatively nearby town or city.
We would like to know what sort of costs and hurdles we face in acquiring a mortgage, we are still a relatively young couple so while we are selling our house at a profit, we will still need a mortgage and would like to save some of the money we get for our daughter and other life events.
When playing with estimators online, we saw there was some ridiculous fee like 25,000 euros for a 300,000 euro home in Paris, does this hold true in the surrounding areas? Are we misinterpreting something? We viewed it as akin to a particularly egregious version of Stamp Duty at the time, but may just be ignorant of the process in general. How do mortgages and the process work in France?
We will also look to potentially add on to a property we purchase. In the UK this is relatively easy due to the popularity of former council housing and the lack of space otherwise, but my partner's parents mentioned struggling intensely to get a small building added to their vacation property in the west of France - is it difficult and expensive to simply get permission to extend one's house or modify the structure?
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Diane2263
6/24/2016 05:09 EST
I can't help you out with the mortgage part, as we are buying a house in Bourgogne but paying cash (we took out a loan in the States). But I've been told to be careful of adding a room (even if that room is currently in place, such as an attic remodel) because if it adds livable square meters to the house, your annual property tax will go up.
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OldPro
7/4/2016 12:04 EST
You may want to re-think your plans in light of Brexit.
Both the UK and EU politicians have already started backpedalling on their assurances that no EU immigrants in the UK or UK immigrants in the EU will be affected.
Until the dust settles after the official exit date finally arrives, the outcome for you if you moved now will remain an unknown.
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caramellos
7/4/2016 12:46 EST
I agree and it is a point we're worried about, but my partner is French, our daughter has three nationalities, and I am American just having finally gotten dual uk-us citizenship a year ago, so no matter which way we look we are confronting the possibility of needing a visa. In this way france may be the easiest of the options, particularly if UK doesn't end up leaving the EU and France having a more lenient and less costly visa system.
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RubyTooz
7/5/2016 05:30 EST
Hi Carmellos,
Luckily, mortgage rates are ridiculously low right now - you can get a fixed rate of around 2% at the moment, without insurance. Elements to consider in terms of mortgages from French banks are: 1) they will want a 15-20% down payment or "apport personnel" 2) the total cost of the purchase will include: the price (which usually includes the estate agent's commission), the notary fees/taxes (probably the fee you saw earlier, as it's 7% of the price for existing structures, replaced by VAT on new buildings), cost to guarantee the loan (either a "hypothèque" or a "caution"), and the bank's "frais de dossier" 3) the bank considers your down payment AFTER paying the notary fees! they very rarely ever finance the notary fees 4) they will not accept a dossier where the total monthly cost of the purchase would represent more than 33% of your monthly income 4) you will have to take out life insurance attached to the loan, either a percentage of the initial purchase or of the remaining principle due and on average about .5% (if you are both young and healthy, this won't be a big hurdle for you).
When a bank offers you a mortgage, they will send it via registered post, and you must wait 10 days before accepting it - it will be valid one month.
The Droit d'Urbanisme regulates construction and extension of buildings, and the amount of difficulty in extending your house will depend entirely upon where it is located, both the commune and the plot. If it is located in an urban zone covered by a PLU, you will be able to add 40 m2 (20 m2 if not in urban zone) to the ground surface without a permit, provided 1) the maximum constructible surface area of the plot allows for it, 2) this does not bring the total surface of the structure over 170 m2, 3) no opening in an exterior wall is being created or enlarged, and 4) no supporting structures are being modified along with a change of usage (e.g. from commercial to residential). If the project fits within those parameters, you will only need to submit a "déclaration préalable de travaux" to the city hall or "mairie." If you are adding a new structure over 20 m2 (or 40 m2 in urban zone), you will need a "permis de construire," and if it brings the total surface over 170 m2, you'll need to hire an architect to oversee the project.
Hope that helps. Best of luck with your project!
Dennelle
www.renestance.com
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caramellos
7/5/2016 08:23 EST
Wow super info thank you! We have decided to buy land and construct a house on it, do you know if the 7% notary fees are applicable in this situation?
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OldPro
7/5/2016 11:49 EST
As your husband is French, you will have no problem getting residency and so the Brexit will not impact your plans in that way.
I would however give some thought to how it will impact property prices in the next couple of years. I can't see property prices going up, only down. I can also see some bargains coming onto the French market from Brits returning to the UK.
On the other side, it can impact your finances since you will be converting the capital you get out of your current house from GBP into Euros. So when to convert? Buy Euros right away on the belief that the Pound is going to fall even lower or hold off and hope the Pound rebounds to a higher level before you need the Euros?
I would be doing some reading over the next few months on what the consensus (if there is any) says is likely to happen.
https://www.google.ca/search?q=brexit+impact+on+french+real+estate+prices&ie=&oe=
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RubyTooz
7/5/2016 12:14 EST
No, that's the rate for a building that is over 5 yrs old. If you buy new, you need to pay VAT plus a different rate for notaries (which is mostly a tax that goes to the government). If you buy your land from a professional, you'll have to pay VAT on that as well. There are little calculators on line to see how much you'd pay in "frais d'acquisition," but in general you'd see:
- taxes going to the Trésor Public (for new or VEFA buildings 20% VAT plus .714% publicité foncière plus .10% salaire du conservateur des hypothèques
- the notaire's remuneration (roughly 5% of the value up to 45,735 euros and 2.5% of the value over that)
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