Since the election of Emmanuel Macron in May 2017, many foreigners have been investing in real estate in France. If you also wish to invest in France, it's now or never, and we'll tell you why.
A highly attractive French real estate market for foreign investors
Since 2017, transactions have increased by 22.5%, especially in the sector of properties valued between 1 and 4 million euros, and this trend continues to rise. There are several reasons for this, particularly related to the political stability of France compared to other European countries. Major French cities (Paris, Bordeaux, Nice) are particularly popular among foreign investors.
The political stability of France attracts foreign investors
Just like in the stock markets, the real estate market largely depends on the political stability of the country. Economic observers have noticed the return of foreign confidence in France since the last presidential elections in 2017. By comparison, investors are turning away from the United Kingdom due to Brexit.
French cities favored by foreigners
Several French cities are attracting foreign investors due to their dynamism, and this trend is constant. Paris has seen its property prices increase over the past 5 years, reaching the landmark price of 10,000 euros per square meter last July. This average is driven up by prestigious neighborhoods such as the 7th, 8th, and 16th arrondissements. Other French cities are also increasingly attracting foreign clientele due to their high rental profitability and dynamism, including:
- Bordeaux
- The Arcachon Basin
- Lyon
- Nantes
- Cannes
- Nice
- Megève
- Courchevel
Aside from its political stability, France offers foreign investors highly attractive investment conditions, whether it be low mortgage rates or the application of favorable property taxation.
Attractive financial and tax schemes
Over the past decade, French mortgage rates have been decreasing. At the same time, there are numerous possibilities for tax exemption on rental income, even for non-resident foreigners.
Mortgage rates that favor real estate investment
Over the past few years, mortgage rates have been plummeting. If in 2008 they were around 5%, they are now around 1.13% (Source: Crédit Logement CSA). However, to calculate the effective overall rate, credit insurance and bank fees should be added.
The regime for rental income
Once the property is purchased, foreign investors will rent it out under the same tax conditions as if they were French residents. They will pay taxes on their income from French sources, namely rental income from leased buildings. By opting for the actual regime, they can deduct all expenses related to management and maintenance, up to 10,700 euros per year and for a maximum of 10 years. By opting for what is called "déficit foncier" (real estate deficit), they can optimize the value of their property in the long term to obtain an interesting capital gain upon resale.
With over 40 years of experience in luxury real estate, professionals at Michaël Zingraf Real Estate provide you with a wide selection of prestigious properties and fully accompany you in your real estate investments.