Buying an Apartment in Paris: How to Become a Property Owner
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Bonjour, dreamers and future Parisians!
Do you often find yourself daydreaming about strolling along the scenic banks of the Seine, savoring a warm, flaky croissant at a quaint boulangerie, or basking in the shadow of the iconic Eiffel Tower? Have you ever imagined swapping your current reality for the charmed life of a Parisian, in a city where every corner oozes with culture, history, and an indefinable je ne sais quoi?
Well, get ready to turn those dreams into reality as we delve into the exciting world of moving to Paris and real estate in the City of Light.
Whether you’re a seasoned real estate professional, a first-time homebuyer or a romantic who’s been bewitched by the allure of Paris, this post on how to buy an apartment in Paris is your first step on the journey to owning your slice of this timeless city.
I’m currently looking to buy a home in Paris and want to take you along with me! Let’s demystify the process together: from understanding the Parisian property market’s ins and outs, to navigating the legal procedures and fees, right down to picking the perfect arrondissement for you.
Make no mistake, buying an apartment in Paris as an American isn’t easy. There are lots of administrative hoops to jump through, not to mention coming up with the cash. But I’m going to share how to do it if you’re up for the challenge!
Soon, you’ll be not just daydreaming about Parisian life, but truly living it. This comprehensive guide aims to be your trusted companion in making one of the most significant decisions of your life. Just to be clear though, none of this information should be considered legal advice!
So, let’s take the leap and dive deep into the heart of Paris. Prepare to unwrap the secrets of acquiring your dream Parisian apartment, a place where you’ll hang your hat, put up your feet, and enjoy French meals every day.
Stay tuned for an adventure full of exciting discoveries, useful tips, and, who knows, maybe even your future Parisian home.
Dreams really do come true – especially in Paris!
FAQ
Here are a few common questions about buying property in Paris before we get started.
You may be wondering if a foreigner can even buy property in Paris. The answer is yes! There are no restrictions on nonresidents or foreigners buying real estate in Paris, France.
Unfortunately, no! A common misconception about owning property in Paris is that you automatically have the right to live in France once you own property. This is not true. You still need to obtain a French residency visa if you want to live in France full-time. Of course, owning property there does make this process much easier!
Open a French Bank Account
I recommend opening a French bank account first so that this is ready to go. You’ll need to pay your taxes and electricity through this account so it’s best to have it set up and running before you acquire property in Paris!
Learn How to Transfer Money from the US to France
You need to be comfortable transferring money from the US to France. Open an account with a reputable foreign currency exchange firm such as Wise, Revolut, or Newbridge FX. Begin by transferring small sums so you know how the process works and how long it takes. Watch the exchange rate regularly so you know how much euros you’re getting at any one time.
Get to Know the Paris Neighborhoods
I advise you to take many trips to the city before buying an apartment in Paris! Get to know the various Paris neighborhoods and walk around as much as you possibly can! This will help you decide which neighborhood is best for you.
Knowing the city takes time. It took me 3 years of living in Paris before I really found the neighborhood I liked the most.
Do Your Own Search
The best way to buy an apartment in Paris is to do the search yourself!
There is no centralized MLS system for real estate listings in Paris. This means you have to look at websites like SeLoger, walk around your neighborhood and visit real estate agencies in the area, and check out the newspaper for listings ads.
Maybe Hire a Chasseur
If you don’t want to take on the (what feels like a) full-time job of finding an apartment to buy in Paris, then you might consider working with a chasseur, or apartment hunter. While I don’t want to recommend one if you do a search for “property hunter in Paris,” a number of companies will pop up. Obviously, there is a fee for using these types of services, but they are there if you are interested.
Understand the Prices
As you look at prices online, understand what needs to be paid.
First things first. The listing price of all apartments is legally binding, meaning that if you offer the list price to the seller, he or she is legally obligated to accept it. That’s very good to know.
Next, the real estate agent fees are also included in most prices listed online. This means you won’t need to come up with this commission out of pocket.
Lastly, the Notaire Fees of 7-8% of the purchase price are not included, which we’ll get to later.
Getting a Mortgage
If you’re a French citizen, then getting a mortgage will be much easier. Mortgage rates for Europeans are currently around 2%, which is much lower than in the USA.
If you’re a foreigner, then it will be tough as most US banks will not offer a mortgage on any foreign property. The reason is that they cannot send a property appraiser out to France to value the property.
Nevertheless, you can inquire with HSBC about getting a mortgage. In the past, they have worked with foreigners to deliver mortgages for foreign properties and even do the process in English. I am unsure if this program still exists.
As an American, you may be able to get a mortgage with a French bank if you can find one. I’ve heard of mortgage brokers financing properties for Americans with 30% down and a long-term rate of 3%, but they are tough to come across.
If you’re able to get a mortgage in France, then apply for one before you begin making offers. Depending on what you’re approved for, this could affect your budget and how much you’re able to offer. Many French people use mortgage brokers to find the best deal for their situation.
Set Up Viewings
Once you find a Parisian apartment you like, contact the agent to set up a viewing. Don’t be surprised if the seller is present during your apartment viewings. It’s totally normal.
Compare with Previous Sales
When considering the price, it’s helpful to look at previous sales.
Since Zillow can’t help you out with recent sales in the area, you’ll need to use the official Demande de Valeur Foncière government website to see what apartments are selling for in the building you’re interested in.
Meilleurs Agents is another resource that can tell you the approximate price per meter squared apartments go for in certain neighborhoods.
Verify the State of the Apartment
Property owners must declare the size of the apartment according to strict rules. They also must make you aware of any problems with the apartment such as lead exposure and other issues. They aren’t always required to fix them but simply make them known.
Just as you do a home inspection before buying an American property, your French property needs to be inspected as well to verify the information provided. Check to make sure the measurements of the apartment line up with what the owner has declared. Check the general state of the apartment, and test that things are working so you know what you’re getting into!
Calculate the Additional Costs
There are several important additional costs yu must factor into your budget. I’ve broken these down into one-time costs and ongoing annual costs below.
Additional One-Time Costs Beyond the Price
There are lots of extra fees and charges when buying an apartment or French property to watch out for. Here are the significant costs you’ll need to consider beyond the purchase price of the actual apartment.
Real Estate Agency Commission
The buyer pays a commission to the estate agent, not the seller as happens in the USA. Most of the time this will be included in the listing price of the apartment, so you don’t have to add that to your total costs. This commission can also be included in your mortgage, so you don’t need to pay it separately. However, if you do this, then the Notaire fees of 7-8% will be calculated on this amount.
Notaire Fees
You must legally work with a Notaire to buy an apartment in Paris, or any property in France. Notaires charge 7-8% of the total purchase price. The good news is that this fee covers your French property purchase sales tax and any Paris city admin fees.
Annual Property Ownership Costs
There are also several yearly fees and ongoing taxes you must consider if you plan to own property in Paris long-term.
Monthly Building Maintenance Charges
Watch out for extortionate monthly or annual building charges. Most properties don’t have tons of amenities like they do in the US, so charges should be low. Building charges cover the costs of having someone clean the communal areas, take out the trash once a week, and do some gardening if necessary. Expect these to be anywhere from 100-300€ per month.
Building Façade Renovation
There is a notoriously inconvenient French law that requires the facade of every building to be cleaned up and renovated every 15 years or so. If the apartment you buy has this event coming up soon, you’ll need to pony up the cash to get it done. This could cost up to €15,000 depending on the building. Ask when this is due before making an offer.
Property Tax (Taxe Foncière)
Annually, Paris property owners must pay a property tax between .1 and .3% of the value of their property to the government. While this may seem low at first glance, other types of taxes put annual taxes in Paris on par with other major cities.
Occupancy Tax (Taxe d’Habitation)
Taxe d’habitation is an annual tax owed by the occupant of the apartment and covers local services such as trash pick-up and neighborhood maintenance. If you don’t rent out your apartment, you’re responsible for this tax.
It varies depending on the neighborhood you live in and the size of your apartment. When I lived in the expensive 7ème arrondissement, the tax was ~700€ for a studio, whereas in the 3ème arrondissement, it was closer to ~300€ for a studio.
Vacant Housing Tax (Taxe annuelle sur les logements vacants – TLV)
France recently implemented a law imposing a tax on vacant properties as a way to encourage second-home owners to rent out their properties and combat the lack of housing.
The tax is calculated based on the yearly market rental value of the property.
Let’s say your property could rent for 2,000€ per month, but you choose to keep it vacant and use it occasionally. This means its cadastral value is 24,000€.
The current tax you’ll pay is calculated as :
- 17% of the cadastral value for the 1st taxation year
- 34% of the cadastral value for all subsequent years
This means you’ll owe an additional 4,080€ the first year your property is vacant, increasing to 8,160€ for subsequent years.
Of course, the cadastral rental value of your property is reevaluated each year and adjusts accordingly.
French Income Taxes
While you are not liable to pay income tax to France simply for owning property, you do owe income tax on any income derived from your Paris apartment. This means that if you rent it out, you will owe tax on the proceeds.
French Wealth Taxes
Even as a non-resident, you are subject to annual wealth and real estate taxes in France if the value of your property exceeds €1,300,000 as of January 1st. Cars, vintage art, and other personal effects are not included in this calculation.
The tax is applied on a graduated scale:
| Portion the Property Value | Tax Owed |
|---|---|
| Up to €800,000 | 0% |
| €800,001 to €1,300,000 | 0.50% |
| €1,300,001 to €2,570,000 | 0.70% |
| €2,570,001 to €5,000,000 | 1% |
| €5,000,001 to €10,000,000 | 1.25% |
| The Amount Over € 10,000,000 | 1.50% |
Even though the calculation begins at 800,000€ to determine the amount owed, the tax is only collected if you have French real estate valued at over €1,300,000.
Apartment Renovation and Maintenance
Let’s face it. Most buildings and apartments in Paris are old and require renovation. Be sure to factor in the cost of renovating the apartment to your liking when making an offer.
Life Insurance Policy
Some mortgage providers require that you take out a life insurance policy to cover the loan’s value. Some of them will even insist you buy their company’s policy which is likely going to be considerably more expensive than a 3rd party insurance. A mortgage broker will tell you this in advance and work out the costs all things considered, but it’s something to be aware of!
French Inheritance Taxes
Upon your death, your French apartment will be subject to French inheritance law, even if you are not a resident. It’s a good idea to read up on réserve héréditaire laws which require children to inherit a portion of their parents’ assets.
Work with a French Notaire to Make an Offer
As a buyer, you’re allowed to have your own Notaire, which is a legal officer who prepares binding contracts on behalf of clients. This person will split the fees with the seller’s Notaire.
Work with your Notaire to make an offer on a property.
After your offer is accepted, you’ll sign a compromis de vente. At this point, you must deposit 10% of the purchase price as a down payment into an escrow account. This deposit is non-refundable in case you break the contract signed.
You then have 3 months to secure a mortgage or find funding for your apartment. If a bank refuses to offer you a mortgage, then you can get your deposit back and cancel the offer without any penalties.
The closing period in France can last up to 2-3 months. The notaire needs to confirm that the seller in fact owns the property, holds the title, and all liens will be paid via the sale price.
The Notaire also must confirm the capital gains tax owed by the seller and the purchase taxes or stamp duties owed by the buyer.
Notaire Fees are paid by the buyer. These include your French purchase taxes, Paris administrative fees, and the fees for the Notaire’s services. The total comes to about 7-8% of the apartment purchase price.
Sign the Sales Contract
Once everything is in order, you’ll sign the final sales contract, or Acte de Vente and be the new owner of your dream Parisian apartment!
I hope you found this post on buying an apartment in Paris useful! Let me know your questions in the comments below.
