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Buying a holiday home in France? Do your homework with these Tips and Advice!

Buying a holiday home in France as an alternative investment

Is buying a holiday home in France on top of your to do list? Then don’t decide on impulse and do your homework with these tips! At the bottom of this page you can also find an overview of interesting investment properties in France.

As a foreigner, you may be used to grey weather, rain and other types of winter precipitation. After the summer period, the weather can turn drastically and saddle us with inclement weather during autumn, winter (and even spring).

One consequence of this is that a lot of foreigners are looking for sunnier places every year!

These can be carefully planned trips to faraway places or impulsively booked last-minute trips to warmer and sunnier places in the South.

Buying a holiday home in France is HOT

Given the changeable weather in other countries, it is no wonder that every year thousands of foreigners are buying a holiday home in France, still the number one tourist attraction in Western Europe!

And even though France is next door and not on the other side of the world, you should not act impulsively when investing in French property!

Below you can read some guidelines and tips that you should take into account during your search for a holiday home for sale in France! You will also find an overview of interesting property investments in France at the bottom of this page.

Don’t be blinded by a dream holiday

The smell of fresh coffee and fresh French baguette, cricket sounds in the background, a swallow flying over the water of the swimming pool, a clear blue sky and a gentle breeze that blows from time to time, a few lounge chairs by the swimming pool for sunbathers and fantastic sunshine.

Such a scene in la Douce France is obviously a dream scenario for many. And once you’ve experienced such a holiday, chances are you’ll crave even more quality time in France…

After visiting the local and some of the surrounding villages, chances are that you will also “linger” for a while in front of a showcase of a local real estate agent.

And then you suddenly realise that such a dream scenario of buying a holiday home in France, as described above, can be quite reasonable and affordable in terms of price tag..

Of course, in such an affordable situation, it becomes even more attractive for many foreigners with a brick in their stomach to dream about buying a holiday home in France and acquiring their own holiday home!

If you choose certain beautiful regions in France (but not the fashionable Côte d’Azur), you are guaranteed to get more value for your money than on the foreign coast in terms of square metres for your euros. In some cases, these are even completely new buildings with a host of additional benefits and facilities.

Don’t forget autumn, winter and spring!

Don’t let yourself be blinded by summer scenes or a blissful and satisfying super holiday! However enthusiastic and convinced you may be, it can be smart not to make an impulse buy. We are not talking about buying clothes or everyday consumer goods such as food, but about buying a holiday home in France (abroad).

Take note of your/your desire to acquire French property as a holiday home. And then go exploring during the different seasons! Visit the region and the village during different seasons to get a good impression of what is going on.

This way, you will find out what is or is not going on locally during the off-season! Is there still room for relaxation in the area? Are there fun things to do and activities to do even in the low season?

So do locals live there and keep it lively (versus a ghost village where it is mainly empty holiday homes during the winter?). Are there facilities, restaurants, cafes, shops, medical care, etc. nearby?

Go on site to establish the reality

During this research phase, you will also have enough time and energy to compare the different offers of holiday homes for sale in France. While comparing, you will also discover step by step what suits you and what does not. And exactly what you want from your French holiday home under the sun!

Local inspections during the different seasons also give you the opportunity to see some of the offers in detail. So you can find out whether what seems at first sight to be an unlikely super-deal really is a super-deal… In almost all cases, a price that is too good to be true is a poisoned gift.

When bargain prices are involved, they are most likely to be for properties in unfavourable locations, old properties that need renovation, or unstylish blocks with no privacy and shared gardens.

Call on experts – Buying a holiday home in France

Would you like to call on the opinion and analysis of an architectural expert? To take a close look at the state of the property? Please contact the locally competent regional association of architects. Such an association can easily put you in touch with a local expert who will be able to look after your interests during an inspection.

Apart from the construction aspect, you should also carefully consider the administrative, legal and fiscal impact of buying a holiday home in France… For this, you need to speak to two experts: A local French expert and an expert in your home country.

Local French expert

A local expert in France who can assist you from A to Z in bringing the administrative and legal hurdles to a successful conclusion.

Think of legal snags and unpleasant surprises and try to avoid them with the help of a local expert:

  • Have all the town planning regulations been respected and is it not a non-zoned building (which could later lead to expropriation)?
  • Is the selling party of the property a party that has no debts to the French government? Or is this the case and can the government seize the property in question?
  • What are the annual tax declaration obligations and what are the annual accounting obligations for a holiday home in France? Do you need to open a local bank account to pay the property tax in France? And what tax forms do you need to fill out and submit every year? This is work for a local specialist in the field!
  • What exactly would you acquire if you were to make the purchase? Full ownership? Or is it some kind of ‘special’ construction that can have far-reaching (tax) consequences later on (think of leasehold or building rights)?

(Financial) estate planner / notary in your home country

Think about your succession planning before it is too late (even though death and dying is a sensitive subject that one would rather not think about).

A (tax) estate planner or notary in your home country (depending on where you are resident) can assist you in structuring the purchase to suit your wealth management and succession planning needs.

You may also contact a local accounting or tax office to help you with your annual personal income tax return. Buying a holiday home in France brings with it tax obligations in your home country where you are resident.

Tip: Do not forget your declaration obligations in France itself! Get assistance and dare to pay for it (you will avoid a lot of headaches and stress).

Study the tax system of France

Taxes are boring, complex and painful for the wallet. It is precisely for this reason that it is crucial to make the most of the opportunity and save taxes wherever possible.

You therefore need advice from an independent, neutral tax consultant in France. Alternatively, you may wish to consult a tax office in your own country that has considerable expertise in French property taxation.

Various types of taxes – Buying a holiday home in France

Taxes that should in any case be considered during your tax research phase of French real estate law are:

Taxes on the purchase (registration fees)

When purchasing a holiday home in France, a form of registration duty is payable, which may or may not be replaced by paying VAT on a new build. Don’t forget the ‘hidden costs’ such as notary fees and other administrative costs that you cannot avoid.

Taxes on the use and possible rental of the French holiday home

Are you going to keep the holiday home purely for your own use (which means that your capital will not produce a return)? Or do you think it would be interesting to rent out the property at times when you are not using it yourself?

What is the impact of such decisions on the tax treatment of the holiday home? Advice from a French expert on the subject is recommended!

And what about annual taxes at the national, regional and municipal levels? Think of land taxes, housing taxes, taxes for non-residents, local property taxes, eco-taxes, and so on.

Taxes on capital gains after sale

What if you sell the property in France in the future with a nice capital gain? Does a plus value tax apply then? If this is the case, how much will the French State run with?

Wealth tax in France – Buying a holiday home in France

During and after the passage of former President Hollande, France often made the international press with a rather curious wealth tax. Subsequent President Macron has since axed the drastic measure for being too damaging to France’s national economy…

But what about foreigners who want to buy a holiday home in France? Is there a wealth tax applicable to foreigners with large assets? And if this is the case, to what extent are such wealthy individuals being fleeced by the French State?

Do you go for profit or pleasure? Buying a holiday home in France

Are you about to strike? Have you set your mind on a holiday home in France? Then think carefully whether you would ever want to rent this property out?

The idea may be to recoup part of the annual costs (occasional rentals) or to achieve a decent return on your invested capital (regular rentals).

Research whether you are legally allowed to rent out

Before you sign the deed of purchase, it is a good idea to find out in detail whether any restrictions apply to renting out the holiday home.

Are there any local rules or laws that apply? Can you rent out freely as you wish? And what does the contract itself stipulate? If you are buying in a larger holiday park or resort, it is likely that restrictions will apply to the ratio of own use to rental.

Buying a holiday home in France to let? 2 options

Do you prefer to earn a return and therefore to rent out regularly? And do you wish to organise this entirely yourself (remotely or with the help of a local representative)? Or do you prefer a ready-made solution with rental guarantee and no stress?

Below you will find more information on both investment paths in real estate:

Do-it-yourself rentals (buying a holiday home in France and renting it out yourself)

Are you going to be buying property in France to let yourself? Then think about the practicalities of such a venture. Who hands over the keys? Which person/organisation organises the cleaning? Who will guarantee safety and who will keep an eye out for theft by subcontractors or guests?

Is there a handyman on site to solve small problems if necessary? How will you promote your holiday home and put it online for rent on real estate websites? Are you going to build your own website or have it built?

Who will take enquiries from potential customers? Do you even feel like doing all these tasks?

In short: A lot of complications to think about… Because even though France is ‘next door’, the country is vast and it is not easy to intervene quickly when something urgent needs to be done..

Alternative: Carefree investment property in France with rental guarantee

The opposite of do-it-yourself renting is investing in a French holiday home with rental guarantee. Different formulas and options are possible, but in general, with such a formula you can count on ‘mixed use’ or continuous rental.

The continuous rental option is a pure investment. You can enjoy a carefree annual return, but you cannot use the holiday home yourself. For bon vivants and fans of France, this is less interesting (it can be interesting to at least have the option of using it occasionally)..

The ‘mixed use’ option is more flexible and offers more ‘fun and entertainment’ for the investor. These are often recreational houses that are part of a holiday park or resort.

The rule of thumb is that with such an investment in real estate, you can use your holiday home yourself for a number of weeks (free of charge or at a greatly reduced rate). The remaining weeks you rent the house to the manager of the holiday park or resort, in many cases at a fixed or variable interest rate calculated on the purchase price of the holiday home.

Example of such an investment possibility

An example of such an investment property in France is the mixed-use investment option at Wyndham Halcyon Retreat Golf & Spa Resort in the Limousin region of France:

  • 6 weeks of free private use per year, both in high and low season
  • The rest of the time is exclusively available to the resort for renting out to guests of the luxury resort – In return, you as the owner enjoy an increasing return, starting from a minimum of 7% annual return!
  • Various types of recreational homes for sale in this French luxury resort (studios, flats with 1, 2, 3 and 4 bedrooms as well as luxury tree houses)

There are quite a few variations on the theme available, so compare and think carefully about what you want (and what you definitely don’t want).

Taxation of rentals – Buying a holiday home in France

Have you decided to rent out your holiday cottage in France? Then keep in mind that the French state also wants a piece of the pie! If you earn rental income from renting out your holiday home in France, you are liable for taxes on it.

Take into account capital gains tax on plus value at sale

Who thinks of selling even before the holiday home is actually bought? Right, but few people… Nevertheless, it is important to consider capital gains taxes. In France, as in Spain and Italy, you owe a tax on the capital gain made by selling.

Did you know: In France, an individual with French nationality must provide a guarantee for a sale in case the notary responsible miscalculates.

Investigate inheritance tax and inheritance law in France

Do you have a premonition that the property in question will not be sold in the coming decades? Because it is to become the new French pied-à-terre of your family and grandchildren? Or are you the planning or worrying type and are you already anticipating the moment that you will (suddenly?) be gone?

In any case, find out what the applicable inheritance tax will be in France. Also, depending on where you are resident, contact a local tax lawyer to find out if there will be any inheritance tax due abroad. And whether there are ways to minimise them… After all, you want your descendants and not the State to receive your inheritance.

Buying a holiday home in France? It is important to plan well, for example, also in cases of blended families.

Did you know that France, for example, legally equates cohabitants with married couples? So depending on your personal wishes and goals, you can work out a sound solution (via a will, a donation or a special construction such as an SCI in France) in consultation with a tax planner (estate planner).

Recreational homes for sale in France with rental guarantee

Additional information about France

Other information about real estate in France: