Money column
Currency expert Mar Bonin-Palmer considers the stages of a French property purchase
I
f you are planning to buy a property in France, you will need to pay for your property in euros. If you are holding
a diff erent currency, it is important to ensure that you are aware of the impact that the exchange rate can have on the price you pay and the ways you have to protect – or even maximise – your budget. Exchange rates are
constantly fl uctuating. This means that when you decide to buy a property abroad, the real-terms cost of your purchase can change with the rates. Imagine getting to the point of buying your dream property, and the price is diff erent from when you made the off er. That’s the reality of the
foreign exchange market – small changes make big diff erences when you exchange a large amount of money. As an example, in 2024
we have experienced a lot of volatility, to the point in which the GBP/EUR rate fl uctuated from a low of 1.1534 to 1.2151 (the highest we have seen since 2016 – sourced from Bloomberg). To put this in perspective, the diff erence in price at these rates on a €500,000 property would be more than £22,000. Planning and choosing a
reliable, experienced foreign exchange company can help you avoid unexpected surprises when exchanging your money.
LOOKING FOR A PROPERTY You can never be too prepared when it comes to your fi nances. Opening an account early will give you access to experts who can help you get familiar with both the currency and the process. At this stage, consider doing
the following:
• Get familiar with the euro: Look at what’s changed over the last 12 months and get comfortable with the idea of spending in the currency.
• Start monitoring the exchange rate: Keep an eye on fl uctuations and get an idea of what you think is a good and bad rate.
• Defi ne your budget and account for fl uctuations in rates: How does all this impact your budget? What would the diff erence be if you exchanged when the rate is in your favour versus when it isn’t? Come up with a range that your budget can tolerate.
ONCE YOU’VE FOUND A PROPERTY This is the fi rst point at which you will need to know the exact exchange rate of your property price in your home currency. Make a note of the exchange rate when you make an off er. This will give you a benchmark to help you make decisions later on. Once your off er has been
accepted, you need to ensure you have your fi nances in place. Next, you’ll sign a purchase
contract, usually known as a ‘compromis de vente’. This is a legally binding commitment to buy the property. There’s a 10-day cooling-off period, but after that, you’re all in!
PAYING THE DEPOSIT The deposit (dépôt de garantie) is your fi rst payment - 5-10% of the purchase price must be paid once the purchase contract has been signed and the cooling-off period has expired.
90 FRENCH PROPERTY NEWS: March/April 2025
COMPLETING YOUR PURCHASE Normally, completion takes around two to three months in France. On the completion date, signing the title deeds takes place in front of a notaire. To make sure there are no delays, you’ll need to wire the fi nal funds; any outstanding fees are wired directly to your notaire’s account before the day of completion. At this point, like in the UK, you should be aware that several taxes and fees might apply to you. With a few months before
your fi nal payment is due, this time can be unsettling for buyers as exchange rates can fl uctuate signifi cantly. If you didn’t fi x the rate at the time
of paying your deposit, make sure you monitor the exchange rate and take the opportunity to plan and get some guidance from a foreign exchange expert. This will help you maximise any opportunities and manage the risk – so there are no unwelcome shocks!
BUYING OFF-PLAN If you buy off -plan (before the property has been built), you will probably need to pay for the property in instalments. Depending on whether you are purchasing an apartment or a house, the payment percentages due at each stage will vary. Here is a guide: • Foundations (apartment 35%, house 20%)
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