Buying property in Europe: Rules to invest in overseas property
Expatriation, second home, investment ... Real estate investment in Europe remains complex. This operation involves rules of French law and international law. It is essential to know the ins and outs before starting.
Is it risky to buy a property in Europe?
The single currency, the free movement of people, goods and capital facilitate today the acquisition of real estate outside our borders. But this type of purchase remains complex. Europe is an economically and politically secure area, but there are differences in legislation between countries. Acquiring property under such conditions can raise important problems in international law, which is why notaries advocate for the construction of a legal Europe.
Buying in Europe: what are the main issues of such an operation?
It is imperative to prepare your project well to evaluate the advantages and disadvantages of such an operation:
- financial cost (in particular when taking into account the exchange rate in case of purchase outside the euro zone),
- administrative and legal procedures,
- applicable tax especially in case of rental of the property or resale with capital gain,
- risk assessment in case of resale or death, etc.
Real estate in Europe: how to secure this purchase?
Each country has its own rules. In Sweden, for example, the transaction is carried out by the real estate agent. In other countries, it may be necessary to hire a local notary or lawyer.
Therefore, before making the decision to buy, it is essential to get closer to the French consulate and local associations such as the local French Alliance to obtain practical information. We need to find a local councilor who speaks French and, if necessary, a translator.
Real estate in Europe: how to finance this purchase?
It is quite possible to borrow in France for a real estate purchase abroad. However, the question of the guarantee remains to be settled. A French bank will hardly grant a loan with a mortgage on the property abroad.
This is why the borrower will have to offer a guarantee on a property located in France or a pledge on a life insurance for example. It may also be easier to borrow directly from abroad. But here again caution is required.
Buying a property in Europe: what impact for your spouse or heirs?
These acquisitions can pose important problems of private international law. It is essential to discuss this with your notary regarding your family situation. In England, for example, the matrimonial regime of the community of property does not exist for the spouses. Any purchase in couple will be done in indivision. In the same way, it is essential to wonder about the destiny of this property in the event of death and the interest of writing a will.
The website "Buying property in Europe" - www.jachetemonlogement.eu - provides fact sheets, in French and in English, explaining how to buy real estate in countries with a notarial system, ie 22 countries within the European Union.
- I want to buy an apartment. My bank refused my loan. Can I ask the seller a staggered payment of the selling price?
- I'm selling my main home acquired 5 years ago. The notary claims a missing diagnosis: ESRIS. It was not provided to me 5 years ago. Am I obliged to have it done?
- I signed a reservation contract for the acquisition of a property on plan. This contract has been notified to me for more than 1 month, can I retract?
- I own an apartment that is not my principal residence. I put it on sale in order to acquire my principal residence. Can I benefit from a tax exemption on real estate capital gains knowing that I am not the owner of my main home?