Real estate in France – how complicated is it to buy a house or apartment in France?

I know quite a few Francophiles who dream of buying an apartment in Paris or elsewhere in France but don’t realize this dream. And the truth is, it’s not surprising. France is considered an expensive country, the French language can definitely discourage doing business, and we haven’t even talked about the bureaucracy. However, since quite a few people have asked me over the years if I know how to buy a property in France, I decided to do some brief research on the subject, during which I was recommended to talk to ENTRÉE, a company that operates in the field of real estate investments in France.

I spoke with Attorney Ofra Berzins Azoulay, Attorney Gregory Weitz, and Attorney Olivier Amsalem, the company's directors, and it seems to me that I was able to extract interesting information for all those who are thinking of buying a house or apartment in France.

What are the advantages of buying real estate in France?

First of all, stability. Investing in the rich and large cities of France can provide a steady and quiet return over a long period of time. A standard lease in France is for 3 to 9 years. When talking about long-term rentals, the returns are high and range from 7% to 10% return (before taxes) and in short-term rentals, results ranging from 11% to 18% can be achieved. This is definitely a combination that is very difficult to find elsewhere in the world.

That sounds good. But is France really stable?

You will be surprised to hear that yes. In practice, much more than Israel. This is a rich country belonging to the G8, an economic powerhouse, a huge country with more than 68 million inhabitants. When the topic of immigration comes up in our conversations with investors, it is important to know that the official immigration rate is about 0.002 percent per year of the total population. This immigration only affects the quality of certain neighborhoods in some cities. In general, real estate in the country is stable and does not experience upheavals like in the United States or Eastern Europe.

Another thing that characterizes the French real estate market is that there are no spins. There is stability in the market over the years, with moderate and controlled ups and downs. When focusing on cities that are of a tourist and academic nature, you can get a very profitable return for a relatively small investment.

Which cities should I focus on if I am interested in buying real estate in France?

We focus on the city of Nice , which is the second most visited city in France, a city with a large number of universities, which attract an educated and affluent population. These are factors that greatly affect the stability of the investment.

Another destination we have been working on for the past year is the French-Swiss border. What is happening in this area is a tremendous growth process that is occurring due to a hysterical real estate crisis that is occurring in Geneva, which is across the French border.
In Geneva, there are no vacant apartments, and crowds of young families and students come to rent in cities near the border, thereby driving up real estate prices year after year.

In addition, towards the end of 2019, the new light rail line will open between the cities on the border between Switzerland and France, significantly shortening travel times between the countries. This is now a rare and once-in-a-lifetime opportunity to invest in a property in Central Europe that yields a high and profitable monthly return.

How much do you need to invest to buy such an apartment?

On this subject, I have some really good news: First of all, we have reached an agreement with a number of banks that allow Israeli citizens to take out a mortgage in France. This is a mortgage of up to 70% of the property price. The arrangement allows the Israeli investor to come with equity of only about 40-50 thousand euros to buy an apartment.

And what is the interest rate on such a mortgage?

The interest rate is really low to ridiculous.. The interest rate ranges between 1.4 and 2 percent, fixed, not linked! This allows for leverage of the investment, high returns and responsible financial planning. For example, today, you can buy a cute apartment, in the center of Nice , worth about 100.000 euros, with equity of only 40.000 euros (including expenses and taxes at the time of purchase). This type of apartment will be rented long-term or short-term, will allow for high returns and, most importantly, will mean that in about 15 years, you will own a profitable property in a central city in France worth at least 100.000 euros.

From your experience, what prevents more Israeli investors from buying real estate in France?

The main difficulty is the language barrier. There is a very large cultural gap between France and Israel, and it is very difficult to operate here, for someone who is not deeply familiar with French culture. In addition, you need to know how to conduct yourself in an orderly manner with the banks. There is the issue of taxation, which requires planning and thinking. And sometimes there are legal challenges that require familiarity with the law.

You mentioned the issue of taxation, what is the tax policy regarding real estate investments?

Regarding taxes, there is a tax treaty between Israel and France that prevents double taxation. According to the treaty, income from real estate in France (including rental income) is taxable only in France and exempt from tax in Israel. There is no need to file a summary report for this income, nor is there a need to file a full annual report with the Israeli tax authorities.

And do you accompany investors throughout this entire process?

Certainly. The company aims to accompany customers throughout the entire purchase process, from choosing the property to connecting with a management company we work with, including legal support and representation with the bank, all while understanding that an investor who does not speak the language and is not familiar with French culture trusts us and expects us to advise and assist him in the most professional manner.

Do you have any more questions?

These were the questions I asked the managers of ENTRÉE , but since I am not a real estate professional or a financial journalist, I am sure that there are probably other important questions that I did not ask. So if you have any such questions, you are welcome to fill out the following form and they will be happy to get back to you with an answer: