It’s vial to be aware of the rules you need to follow around finances in France – and the pitfalls you might miss. Considerations include:

  • How you’re going to pay for the property itself
  • Ongoing costs of maintaining the property
  • Controlling the risk of currency exchange to and from France
  • Essential person finances in France, e.g. pension and inheritance
  • Ensuring you have the correct tax status
  • Paying taxes on time and to the right authorities

You will need to think carefully about your finances in France at the very beginning of your property search. This means planning not just for how you will pay for your property, but also how you are going to finance your life in France. There are also a number of tax implications when buying property in France, depending on your residency status and whether you are moving to France permanently or buying a second home. This can all be complicated, so it’s therefore definitely worth seeking professional advice from an independent financial advisor. There’s a lot to think about!

Alexis Stratfold

Resident expat who moved to the Languedoc

Finances in France – before you go

One of the most important financial decisions when buying property in France is how to finance your property purchase. This can range from cash, mortgages and pension pots to other loans or financial products, such as equity release. You also need to consider how to send funds to France to pay for the property, factoring in how much you need for a deposit and any regular payments. There are also other considerations with finances in France, like opening a bank account.

Financing options

Couple planning their finances in France
It’s not just your property finances in France that you need to budget for. You will also need to plan for what can often be hidden costs, such as estate agent fees, legal fees, taxes in the UK and France, bank charges and exchange rate fluctuations, which all add up. We highlight the key costs to budget and plan for, so you can avoid losing money unnecessarily when buying your home in France.

Person planning her finances in France
Tax considerations are one of the most important financial areas to address early on. You will need to ensure you are registered to pay tax with the correct authorities – the last thing you want it is to be taxed twice in two different countries! We recommend seeking advice from an experienced tax advisor on finances in France to get matters in order.

Planning the UK side of finances in France
Planning your worldwide estate and inheritance effectively is vital when moving overseas. France has very specific, complex inheritance laws. However, a recent change to legislation means that you can choose whether you follow the inheritance laws of France or your country of origin. It is important to seek the advice of an independent legal professional to plan your estate to ensure your family does not lose out to complicated French inheritance laws.

A key part of planning finances in France is inheritance tax
With finances in France, it is worth considering all the different pension options available to you and how this affects your tax situation. There may be a benefit in moving your pension into another type of pension scheme – a self-invested personal pension (SIPP), for example, or Qualifying Recognised Overseas Pension Scheme (QROPS). Pensions are a complex area, however, so it is always important to seek professional advice from an independent financial adviser (IFA).

A picture of a pot of money, symbolising sorting pensions for finance in France
You need to ensure your home, belongings, health and family are protected. The different insurance costs need to be factored into your overall budget. These can be different in France to what you are used to in the UK. Make sure you research the different options available to you carefully and find a professional firm to provide the right insurance services to meet your specific needs.

A home repair problem that could cause problems for finances in France

Currency Zone

You may not be aware of how crucial currency exchange is to successfully buying your French property. Exchange rates fluctuate constantly. Consequently, as they move, they affect the price of your French property. If you don’t already have the right amount of euros to pay for your property in France, the rate you receive once you have transferred your money into euros could lose you a considerable amount of money if not managed carefully. However, there are ways to control this risk and protect your finances in France.

Picture of money for finances in France
You will need to factor in any regular payments to and from France. These may be regular mortgage, pension or salary payments, regular purchases, or paying any bills for the maintenance and upkeep of your new French property. There are specific plans you can set up to ensure automatic payments. This is normally in order to avoid losing money on transaction and banking charges and to ensure peace of mind that all payments are accounted for.

Sending money to France

Finances in France involves EUR and GBP, like in this picture
Whether you are in the early stages of planning your finances in France, or going through your purchase process already, the free guide from Smart Currency Exchange, “Three essential steps to buying property abroad” will help. It outlines the key steps in buying an overseas property. Furthermore, it explains how currency is an important part of the overseas buying process. It also provides the important facts you need to know about your key property professionals.

Buying a property like this one means carefully sorting finances in France

Finances in France – after your purchase

For permanent residents and holiday-home owners alike, there are a number of tax considerations that need to be factored in to your finances in France. You need to ensure you are set up correctly to pay any local or national French taxes once you are living there. Moreover, you must allow for the costs of the two main property taxes required in France, the taxe foncière and taxe d’habitation.

An important part of finances in France is paying taxes
Planning to draw your UK pension when living in France? There are certain legalities you need to be aware of, such as residential status in France and French tax returns. There are also practical considerations like making regular payments or money transfers between countries. Finally, you also need to be aware of the different pensions available. An important step is to inform the UK Pensions Service if you are planning to move to France.

It's so important to work out your finances in France, including your pension
One of the first parts of finances in France, like anywhere, is opening a bank account. Bank accounts in France are open to both residents and non-residents. Generally, you do not have to travel to France to open the account. You will need to be able to provide key documentation in order to open your account, and there is a variety of types of bank account on offer.

Opening a bank account is a key step to organising finances in France
Buying property and renting it out to holidaymakers is a popular option for many property buyers in France. It can also be a useful source of income once you own your French property. There are a number of important legal and financial considerations to take into account if you are planning to let your property in France. Find out how you can go about this in the right way and comply with legislation.

Letting your property means extra consideration for your finances in France
We compare the cost of living in France to the UK annually, matching the price of a regular supermarket shop in France with its UK equivalent. France is generally regarded as being quite an expensive country, so it’s important to budget for maintaining your lifestyle once you move. There are also some key differences between buying food and household items in France and the UK, such as the regular French markets.

Markets like this one can help lower the costs of day-to-day finances in France

The Property Buyer’s Guide to Currency will help you:

  Understand the currency markets
  Protect your property budget
  Use a Currency Specialist
  Learn from other overseas property buyers

Download the Property Buyer's Guide to Currency

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