Investing in French Property from Hong Kong
Investing in French Property from Hong Kong can be smooth and plain-sailing with the help of Erna Low Property.
We will ensure the process runs as efficiently as possible, bridging the gap between you and the developers/sellers with our abundance of English speaking contacts across France, from mortgage brokers, Notaries and tax advisors. No aspect of your purchase will ever be ‘lost in translation’.
When it comes to signing your deeds of sale, you will not have to travel to France - it can be signed using a Power of Attorney at a Notary Public in Hong Kong. In fact, you won’t have to travel to France at all; the whole process can be carried out remotely, via phone, email and post.
Hong Kong currently has a double taxation treaty with France which means that as a resident of Hong Kong, when you are renting a property through an onsite management company or if you purchase a leaseback property you are able to benefit from the same income tax incentives as our clients in France and the UK.
For more information, please don’t hesitate to contact us.
Hassle free ownership
Buying a leaseback property is a very popular way for foreign clients to invest in French property. By having a property that is fully managed by an onsite management company, you can enjoy the ownership of your apartment or chalet without having any responsibility for the upkeep. This is particularly important for clients who do not live in easy reach of France and therefore cannot travel to the country often. By owning a leaseback property, you can simply turn up and enjoy your property and lock the door behind you. There are many other benefits of investing in a leaseback property, please click here for more information.
The purchase process
Once our clients have decided on the property of your choice, we will guide through the entire purchase process with the assistance of our legal and financial contacts in France. The standard process will look like this:
Deposit: A deposit is payable to reserve the property. The amount fluctuates between 2% and 10% but the funds are always held in Escrow – they cannot be touched by the seller until the buyer has signed their final deeds and the amount is fully refundable until later in the process.
Contracts: We will prepare the contracts at our office in London and courier them to the buyer. They will review the document with the Notaire and sign once they are comfortable doing so.
Cooling off: Once the developers have countersigned the contracts they will return them to the buyer via courier. From the day the documents are received, we must respect a 10 day cooling off period, which is the time during which the buyer can review their project and ensure they are happy to move forward.
It is at this time that the deposit becomes non-refundable. However, if the buyer is unable to obtain a mortgage, they are still entitled to have their funds returned.
Notaires: At this point the majority of the work is overseen by the Notaires involved in the purchase. They will carry out their due diligence, collate the relevant information from the local authorities and prepare the final deeds along with the power of attorney document.
Power of Attorney: Generally, our clients will sign their final deeds via power of attorney. This document will be sent to them via courier and must be signed in front of a public Notary in their country of residence (we will always help our clients find their closest Notary).
Transfer of funds: The client must transfer the relevant funds to the Notaire before the deeds can be signed. We will put all of our clients in touch with our preferred FX broker to ensure that they are getting the very best exchange rate possible. Whether the full cost of the property is payable at this point is dependent on whether the property is being bought off plan, and whether or not the client is purchasing with a mortgage.
Final signature: Once the signed power of attorney document has been received by the Notaire, they will sign the final deeds of sale and the purchase will be complete.
As before, Erna Low Property are here to ensure that the above entire process is carried out in the most efficient and hassle-free way possible, regardless of where our clients are based.
In France, the purchase costs are encapsulated into one sum that the buyer must pay to the Notaire. These costs are fixed by the French authorities depending on the age of the property. For new build properties, or those newer than 5 years, the fee will be approx. 2.5% of the purchase price. For properties older than 5 years, the cost will be between 5% and 9% of the purchase price.
All owners of property in France must pay two taxes – taxe fonciere (land tax) and taxe d’habitation. The cost of each of these taxes is generally between €11 – 20/m2/year. If purchasing a leaseback property, the taxe d’habitation is covered by the management fee.