10 questions to ask when buying a property in the French Alps
Posted on Friday 14th February 2014 by Lesley Thomas
Where do I want to be?
Location, location, location, still holds true no matter where you buy, however location can be a wholly subjective thing. When purchasing a home in the mountains, starting off with which country to want to be in, might seem like an obvious beginning, but some start their search not knowing, if they want to be in France, Switzerland, Austria or Italy.
How close do I want/need to be to an airport?
The answer to this question really comes down to how frequently do you want to use your property, how far are you prepared to drive when you land and is there a particular ski domain you want to be in?
If you just intend a couple of weeks of winter and summer use, your happy to drive and want to specifically be in one of the resorts of the “Trois Valleys” ski domain that include Meribel, Courchevel, La Tania and St Martin de Belleville or the Espace Killy (Val d’Isere and Tignes), then 2 – 2 ½ hours from an airport would not be considered a big deal, particularly if you have older children.
However if you are anticipating regular weekend visits, or have younger children, then the less time spent in the car the better and a resort closer to an airport might be the better solution.
There are a number of resorts that include Chatel, Samoens, Chamonix, Megeve, Morzine, Les Gets and St Gervais which are all 75 minutes or less from Geneva Airport, which make ideal destinations for those looking for shorter journey times.
Do I want a chalet or an apartment?
Some might feel the answer to this question is geared around budget, but it’s not. Chalets and apartments can offer different benefits and drawbacks for different people. A chalet can lend itself to a greater outdoor living experience, privacy and possibly depending on where it is located, peace and quiet, but equally some feel it does not have the ‘lock up and leave’ element that an apartment can offer.
Apartments tend to be mostly located in resort centres ensuring the use of a car to get round is not required. Apartment buildings often provide facilities such as a swimming pool and Spa, whereas chalets don’t, unless these are specifically included in the build.
Both types of properties have their admirers and detractors, so you need to be clear in your mind, which is the right choice for you?
When do I want to use my property?
Most when they think of the Alps think of snow, but the summer months in the Alps are also very popular due to them being warm and abundant in sun. Owing to their unique micro-climates certain parts of the Alps get more sun than that experienced in the Cote d’Azur!
If you want a longer ski season then resorts at a higher altitude are key, such as Tignes and Val D’Isere, but if you are looking for somewhere with life both in the summer and winter, then perhaps altitude is less of an issue for you, as many of the ski resorts still have lifts open until Mid-April for skiing anyway.
Do you want brand new or a resale?
For those seeking a property to use “now” and don’t want to wait for a project to finish, or for those looking to undertake a renovation project of their own, there are a great selection of resale properties available to consider throughout the Alps.
When purchasing a brand new property either off-plan or just built, then you will benefit from the 10 year guarantees from the builders, both for the interior and exterior and there are no renovations or modernisation to worry about.
If it’s important to have an input into the interior design and the layout of the property then an off plan property is for you. You will also be exempt from paying one of the two property taxes that exist in France, as Taxe Fonciere does not become payable until Year 3 of ownership of a new property.
Notary fees are lower when purchasing a new property, typically 3% compared to 7% when purchasing a resale. On a €1 million property this can be a saving of up to €40,000
Classic Freehold or Leaseback?
When buying in France the answer to this question can depend on the reason for purchasing in the first place. For those wanting full access to your property with no restriction on usage, possibly renting out your property when you are not using it, then classic freehold is probably the option most suitable for your requirements.
However for those looking for a guaranteed rental return, require less frequent access to your property and want to enjoy a VAT free purchase, then Freehold Leaseback is probably the better choice for you.
There is flexibility with the leaseback option too, with different leaseback packages offering different levels of personal usage each year. Leaseback purchases are certainly becoming ever more popular with increasing bad press coverage on traditional pension returns and costs of running those pensions. This has led more and more people ceasing paying into traditional pension funds opting to invest in property instead, mixing an element of fun and life style with longer term investment gain.
How do I arrange Finance?
With French mortgage rates at an historic low and likely to remain so for some time, coupled with the pound getting stronger against the Euro, it makes sense to purchase using euro-based mortgages. Developers can offer better rates of lending, depending on the project and who is backing it, with some offering up to 85% LTV.
Typical rates for repayment mortgages for overseas investors are currently below 3%. Alpine Property Investments can make the necessary introductions to a French Mortgage Brokerage for anyone thinking of purchasing with finance.
What about the Legal aspects?
France’s legal system is quite different to that of the UK and it is vital to use the uses of an English speaking notary. The notary ( notaire ) is a mandatory part of the purchase process in France. The notary is a government official, who works with both the buyer and seller normally, although it is possible to appoint your own notary, who would then split the fees with the seller’s notary.
What costs do I need to have in mind?
There are several fees and taxes payable when purchasing a property anywhere, in France these include, Notary and Legal Fees (usually between 2.5 to 7%), mortgage fees (if applicable) and foreign exchange costs for those needing to move funds between two currencies.
Are there property taxes in France?
Yes there are two, both of which are set by the local councils.
The first is the Taxe D’habitation which is chargeable from ownership and is only applicable to Classic Freehold Properties and not Leaseback (the management company pay this in this case).
The second, the Taxe Fonciere, is not chargeable until Year 3 of ownership.
On apartments and chalet developments there are also Communal Management fees to pay annually, for the maintenance of communal areas and facilities, such a swimming pool, snow clearing paths and roads and grass cutting.
For a more detailed answer or additional information please contact us.