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French expats buying property within the EU - the pros and cons

In 2020 over 1.6 million French nationals were living outside France. Of these, 652,456 were living in the European Union (EU), 277,978 resided in North America and 224,688 lived in non-EU countries within Europe.

French expats choose to settle abroad for many reasons, from relatively high taxes back home, to professional opportunities and personal circumstances. It follows that many French expats may, at some point, wish to consider purchasing property abroad. As EU countries are the most popular destinations for French citizens, this article explores some of the pros and cons of buying property in the EU.

Planning on buying property overseas? Avoid hefty markups on exchange rates when buying and selling overseas real estate with CurrencyFair's low-margin FX rates.

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Benefits of buying property in the EU for French expats

It's relatively straightforward

As an EU member country, it is fairly simple for French citizens to secure residency and buy property in other EU countries, which might also explain why many French nationals choose to settle there. Most major European countries allow overseas investors to buy real estate with the same rights as local citizens, with a few exceptions. For example, French expats looking to buy in Hungary, Denmark, Poland and Malta would first need approval from the local authorities. And real estate purchases in Liechtenstein are restricted to residents only.

Buying within the eurozone avoids currency-related costs

If you're considering buying in the eurozone, then you mitigate the risk of fluctuating currencies making your property more expensive than you anticipated.

However, if you're looking to invest in countries that don't have the euro, you should plan carefully to minimise bank transfer costs and exposure to shifts in the currency market. Banks typically charge eight times more for every money transfer than CurrencyFair. By using CurrencyFair to transfer currency for your property purchase, you'll always get the best rate available at that time, as well as reduced fees in comparison with the banks.

Political and economic security

At the time of writing, all EU member states benefit from relative political and financial security. It's always a good idea to buy real estate in a stable country, otherwise you could encounter issues when you want to rent out or sell the property.

Low-cost, convenient travel

Another major advantage of buying within the EU is the ease of travel between France and other European countries. Short distances mean there are a number of straightforward options for travelling back and forth, such as flights, train, and even travel by car. Most of these transport methods are also relatively inexpensive, so you can visit as much as you need to.

Familiar languages spoken

If you prefer to live and work in French,  it's a huge benefit that many EU countries are also French-speaking. You'll find French speakers in Belgium, Luxembourg and Italy. For this reason, French expats also seek to live and work in Switzerland, despite the country not being part of the EU. 

Many French professionals are also comfortable settling in English-speaking countries, which is another reason to opt for an EU country, as English is widely spoken.

The risks of buying property in the EU

Unexpected costs

As with any property purchase, you must plan carefully to take all potential costs into consideration. Often, it's those extra expenses that you haven't planned for that could put your project at risk. For example, if you're buying a home outside the eurozone, think about how you will transfer currency to make the purchase. Not to mention how you will pay your mortgage or regular expenses. Unexpected market changes could increase your costs by a significant amount.

Also, make sure you plan to cover any legal or administrative costs, for example if you need to hire a notary or translator.

Admin and legal considerations

Following on from the point above, keep in mind that purchasing a property comes with different legal procedures, depending on the country.

Let's take the example of deposits. In Belgium, a deposit is not a legal requirement, but a 10% down payment is traditionally paid. This is a guarantee for the vendor, and most sale agreements will stipulate that the seller may keep this money if the buyer withdraws. In Spain, the Spanish Civil Code dictates that if the buyer defaults, the vendor can keep the deposit. But if the vendor fails to go through with the purchase, they must pay the buyer double the amount of the deposit.

In terms of who handles the transaction, in Spain you'll find that the deposit is usually paid through a real estate agent. This is also the case in Sweden, where an agent typically handles the entire purchase. However, in countries such as Luxembourg, both parties must liaise with a notary for the sale to be legally binding. It's important to be aware of these legal distinctions, so you're not vulnerable to fraudsters who could take advantage of the situation.

Tax matters

Finally, make sure you consider all tax implications of owning a property abroad. If you're a tax resident in a different country, then it's unlikely you'll need to pay tax on the property in France. However, it's always your responsibility to carry out due diligence and check all tax requirements before you buy. Prior to signing any contracts, check out our blog covering practical tips for buying a property in the EU, which explores some of the tax implications. And as always, seek relevant advice from tax authorities both in France and in your new country of residence.

Planning on buying property overseas? Avoid hefty markups on exchange rates when buying and selling overseas real estate with CurrencyFair's low-margin FX rates.

Learn moreDisclaimer: This article is for general information purposes only and does not take into account your personal circumstances. This is not investment advice or an inducement to trade. The information shared is for illustrative purposes only and may not reflect current prices or offers from CurrencyFair. Clients are solely responsible for determining whether trading or a particular transaction is suitable. We recommend you seek independent financial advice and ensure you fully understand the risks involved before trading. Leveraged trading is high risk and not suitable for all. Losses can exceed investments. Opinions are the authors; not necessarily that of CurrencyFair or any of its affiliates, subsidiaries, officers or directors.

Photo by Sebastian Herrmann on Unsplash


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