Decide if you are going to live in the apartment as a second home or rent it as a vacation rental. If you are planning to use the apartment as a second home, pick a place based on your personal preferences for location and size. If you think you may rent the apartment to short-term vacationers, consult with a tourism professional to determine which locales are in favor with visitors and what types of apartment and amenities are in demand. For example, in Paris, studio apartments and apartments that sleep at least six individuals maybe more desirable than two-bedroom apartments. An apartment with an elevator may be a must-have for a vacation rental, but not important if you are buying the apartment as a second home.
Consult with an American accountant to determine what taxes you will pay on income and what expenses you can write off. This depends on whether the apartment is classified as a second-home or rental by the Internal Revenue Service. In both instances, you will have to pay French property taxes. Property taxes will vary depending on where in France you purchase the apartment.
You will also have to pay French taxes on rental income. Since you are not a French citizen, the tax rate will be low. For example, on 6,000 euros of rental income in 2008, you would have paid 5.8 percent in income tax.
Make a list of your must-haves and deal-breakers. Prioritize this list and refer to it while you are looking at apartments. Be prepared for cultural differences in how properties are presented to sell. For example, most French apartments are sold with gutted kitchens containing no cabinets or appliances. You are expected to design and install your own kitchen after purchasing the apartment.
Find an agent immobilier who understands English to help you locate an apartment. An agent immobilier is a French real-estate agent. However, there is a difference between an agent immobilier and a realtor in the United States. In the United States, you work with one realtor who can show you any property in the Multiple Listing Service (MLS). In France, there is no MLS. Instead, sellers list their properties with one agency. You may need to work with many different agent immobiliers to view multiple apartments that meet your criteria.
Hire a Notaire, a French lawyer who specializes in real estate law.. Your agent immobilier can recommend a bilingual notaire. Notaires are required for all transactions and act as a quasi-representative of the State to ensure that the process is fair to both buyer and seller. Using notaires, there is little risk that you will be misled concerning the apartment.
The notaire typically charges 7 to 8 percent of the purchase price. The seller pays the agent immobilier's commission.
Open a French bank account by visiting a local French bank in person and completing the necessary paperwork. Bring your passport. You are required to have a French bank account to buy property, and should pay any fees at closing from this account. There is no minimum balance required to open an account.
Make an offer on an apartment by signing a Promesse de Vente with your notaire present. The Promesse de Vente is a legal document that states that the seller is obligated to sell the property to the buyer. Once the document is signed, you have 11 days to change your mind regarding buying the apartment. The seller cannot decide not to sell the apartment to you.
Finance the property. Most Americans pay cash or take out a home-equity loan on their primary residence to pay for the apartment. If you cannot pay for the property in cash, you can apply for a French mortgage. Remember that these mortgages are priced in euros and the monthly payment for a fixed-rate mortgage can vary depending on the exchange rate of the euro to the dollar.
Close on the apartment. Your notaire will guide you through the process and ensure that you have the necessary documents to purchase an apartment in France.
