French Riviera Real Estate: Everything You Need to Know
Are you thinking about buying French Riviera real estate?
Want to learn more about buying French Riviera real estate and how it works compared to other countries?
You’re in the right place.
The French Riviera has for a long time been an iconic place in the south of France, by the Mediterranean sea, associated with lots of days with sun, a perfect temperature, and a stunning landscape.
The French Riviera has, because of this attracted plenty of tourists over its history, first aristocrats, mainly from Great Britain, Russia, and Paris, during the 18th century and now, people from all over the world.
The French Riviera includes some of the world’s most iconic and recognized cities that have a reputation for glitz and glamour, and are attracting the rich and famous. These are cities such as Cannes, Saint-Tropez, and Antibes, but also lesser known towns such as Menton and Vallauris.
As such, the French Riviera real estate includes some of the world’s most expensive properties. In fact, not too long ago, the world’s most expensive home Villa Les Cèdres on the French Riviera went on sale for a colossal £315 million.
Each and everywhere, you can find luxury French Riviera residential properties, but it also has property that is more affordable to the masses.
The French Riviera is a place that has a rich history, and much of the history of the wealthy aristocrats who once stayed here can be seen in the form of buildings, landmarks, etc.
When it comes to French Riviera real estate, there’s something from everyone.
The French Riviera real estate that is the most sought-after and attractive are the properties that are situated just along the coast, especially in the most prestigious cities such as Cannes and Cap Ferrat. But buying property that doesn’t have sea-view and that is located further into town is quite popular too, as it allows for easy access and a central location that is close to all amenities and the heart of the city.
The French Riviera real estate market consists of both older as well as newly built residences. Some are completely renovated, some are built from the ground up, and some are hundreds of years old, but recently renovated.
There are plenty of picturesque an typical French villas on the French Riviera, but there are even more apartments, large and small.
Some are located on the steep hills, and others at the seafront.
The bottom line is that the French Riviera real estate is a very diverse place when it comes to real estate, which means that no matter who you are and no matter what your preferences are, you’ll be able to find French Riviera real estate that is suitable for you and your needs.
With that said, let’s dig into the more practical parts about French Riviera real estate and discuss things like what you need to consider when buying French Riviera real estate, what the taxes are like, as well as other helpful information.
Prices of French Riviera real estate
The prices of French Riviera real estate varies, just like they do in any other place in the world.
The closer you get to the coast, the more expensive it’ll be, and if you have a sea view, it’ll get even more expensive.
The concept of finding a bargain here is very unlikely, especially if you compare the area to rural France, as they differ a lot from each other.
Great deals on the French Riviera disappear quickly, so if you want to make a great property deal, you need to make sure you act quickly.
Something that some foreign tourists are surprised about when they come to buy French Riviera real estate is that the prices are generally bid down on. This means that the seller sets one price, and most of the time, the final purchase price will end up lower than that.
If you want to live on the French Riviera but come away from the large crowds and tourists, there are a number of small villages where you can purchase real estate in that won’t break your bank, such as traditional villages like Vence, Valbonne, and Tourettes-sur-Loup.
The more inland you go, the less you’ll pay, generally speaking, but just because you go in the direction further from the coast doesn’t mean you won’t be able to enjoy stunning scenery and amazing views. If you compare an apartment in Vence, it might cost you €250,000-€300,000, and if you turn to Valbonne, you might look at about €400,000 for the same apartment.
It’s impossible to say a general price for French Riviera real estate since it can range between everything from below hundred thousand, and then, as demonstrated, stretch up to millions and millions.
Generally, though, people normally buy French Riviera real estate for a few hundred thousand euros.
Why is French Riviera real estate so expensive?
While you can find affordable and quite cheap real estate in the French Riviera, just like you can elsewhere, the majority properties on the Riviera are generally more expensive than many other places on the French Riviera.
The reason why French Riviera real estate is so expensive?
Well, the main reason is that of supply and demand.
When there are a high demand and a limited supply. the prices rise, and since there a limited area on which new buildings can be built, and relatively speaking not a lot of objects that come out on the market, the ones that do can have high prices.
Through history, the demand has always been greater than the demand, and this leads to increased prices since the seller has the leverage. Of course, everything is relative. If you compare most French Riviera real estate with property in cities like London and New York, the French Riviera offers great value property, and can even offer good value for money.
Another thing that is affecting the prices of French Riviera real estate is the reputation that the Riviera has. It is known to be a hideout place for the rich and famous and has an amazing climate.
Costs of owning French Riviera real estate
There are two main costs of owning French Riviera real estate.
These are two property taxes known as taxes d’habitation and tax fonciere. Taxe foncière is a land tax and shall be paid by the owner of the property. The tax is a residence tax, and if you own a property and live in it yourself (or have it at disposal).
The maintenance charges cost around 1% and 2% of the cost of the property per year.
In order to cover this cost, ”many” people rent out their real estate during the summer when the rental prices are high, generating between 3% to 6% of the property’s value.
This was just scratching the surface, but we’ll go into everything you need to know about French Riviera real estate tax further on.
Expensive French Riviera real estate
If you’re looking to purchase the best of the best objects out on the market, and don’t care too much about price, Monaco has the most exclusive properties on the Riviera.
After that, you have Cannes, which has lots of exclusive villas and apartments. Furthermore, there are also a number of places where you can find exclusive real estate, but now, we’re focusing on cities as a whole and the real estate reputation they have.
Finding affordable property
As mentioned earlier, despite what many people think, just like any other city, finding affordable real estate on the French Riviera is absolutely possible.
Sure, the Riviera has a reputation for glitz, glamour, and luxury, but there are plenty of properties along the Riviera for sale at a fair price.
The fact of the matter is that more and more of these, not top class, luxury properties are coming out on the market.
As the French Riviera has become more accessible for everyone, with more flights than ever going there, and getting there can cost below 100 euros, more ”regular people” have been able to find their way here.
But these people aren’t screaming for huge villas or apartments, built in the absolutely most luxury materials. Instead, a trend we’re seeing with French Riviera real estate is that developers are now building more studios and one or two bedroom apartments where they otherwise would have chosen to build large luxury apartments.
The French Riviera real estate has some of the highest rental potential in Europe, especially in Cannes. Studio apartments, especially in Nice and Cannes will show to be tremendous investment properties when it comes to rental opportunities. Additionally, the French Riviera real estate also sees some appreciation and is known to be quite high, with claims of about 10% per year in appreciation, and since the land of which you can build on is limited, this doesn’t look like it’s changing any time soon.
Why should you buy French Riviera property?
The French Riviera has plenty of benefits when it comes to buying real estate, however, there are plenty of things you want to consider before opening your wallet.
The French Riviera attracts plenty of people who are retiring to buy their own property there and enjoy the warmer climate, especially if they’re living more north. This also includes other Frenchmen living further in the inland.
An amazing thing about the Riviera is that it never becomes a ghost town during the off-season like many other cities can. In fact, the majority of tourists visit outside of the summer months, and there’s always events and things going on on the Riviera.
The French Riviera: one of the safest places to buy property
The French legal system of buying real estate, while might seem complicated and lengthy, is tremendously safe, making it one of the safest places to buy property.
This is because you won’t face any of the otherwise potential dangers such as last minute let downs.
French Riviera real estate: taxes
Now we’ve gone through the fun part of French Riviera real estate, but now, let’s look at the less fun, but still very important practical part of buying real estate.
In France, you have a transfer tax of 5.09% to 6.40% is levied on the sale of real estate. This depends on the type, location and use of the property.
If you’re going to take a mortgage or loan on your property when buying on the French Riviera, the French government charges a fee.
The fee depends on the amount of the loan.
This is one of the major taxes you need to have in mind when buying French Riviera real estate.
The annual property tax consists of both taxe d’habitation the taxe foncière, as mentioned earlier.
The formula for calculating the tax is complex and depends on several factors, such as whether your property is your primary or secondary residence. Residences that are secondary will be taxed higher.
The taxe foncière is a tax that is based on the notional rental value of the apartment. This tax takes the age of the building, the area of a city, as well as the size of a property into account.
The owners of the apartments in a building on the French Riviera share the responsibility for common parts of the building, but you own your own apartment.
When living in an apartment, you have a monthly copropriété (co-op) which exist so that things related to the building, including general maintenance, garbage collection, etc. can be financed.
This monthly charge varies, and if you have a larger apartment, you’re going to have to pay more, as you own a larger share of the building. This monthly cost tends to be lower in provincial cities and towns.
On the French Riviera, this cost can be everything from $50 to $200 and beyond.
In France, you have an inheritance tax, which is paid by beneficiaries.
The tax rate is applied to the net value of the asset. This is after the deduction of liabilities. The tax-free thresholds depend on ”the relationship between the beneficiary and the deceased”.
Spouses or couples that are in formal civil relationships aren’t subject to French inheritance taxes. There is, however, an inheritance tax for lifetime gifts.
For these cases, the tax-free allowance is currently €80,740 and €100,000 for parents and children.
In France, there’s a wealth tax, and as of January 2018, the previously existing wealth tax system was abolished in favor of a new one that only taxes real estate.
The residents of France that have a property worldwide that is worth €1,300,000 or more have to pay this new property wealth tax.
Non-residents are only liable for the property they own in France.
Individuals with a real estate value of less than €800,00 have a 0% tax rate.
People who own real estate that’s valued between €800,001 and €1,300,000 have to pay a 0.5% tax rate.
The taxes increase progressively from there based on bands of property values, with a maximum rate of tax at 1.5% for properties over €10,000,000.
Rental Income Tax
No matter if you reside in France or not, you’re liable for paying tax on any rental income earned from your French property. For the regular tax residents of France, this is levied at regular income tax rates.
For non-residents, the rate will be at a minimum of 25%.
Income Tax Rates
If you live in France, you will have to pay French income taxes.
As of 2018, the tax rates of France were the following:
• On income less than €9,807: 0%
• From €9,807 to €27,086: 14%
• From €27,086 to €72,617: 30 %
• From €72,617 to €153,783: 41%
• Above €153,784: 45%.
Capital Gains Tax on Property
If you sell your property within five years of ownership, you’ll be liable to pay capital gains tax and social charges totaling 34.5%.
You have a discount at 6% per year on capital gains after the fifth year of ownership.
If you’ve owned your property for 22 years, you won’t have any capital gain taxes, but you will still be subject to social charges until you’ve owned your property for 30 years and more.
When buying French Riviera real estate, you need to have in mind the legal fees. These fees are not only the notary’s fees (frais de notaire), but they also include disbursements, taxes, various duties, including searches at the land and mortgage registry.
Furthermore, there might be a sales tax for properties less than five years old that hasn’t been previously sold.
The notaries fee is set by the French government and is 5.09%, and 0.715% for properties less than five years old.
Some notaries try to charge more fees to English speakers, so be careful. Of course, if your documents need translation, you are probably going to have to pay more, but it is best to first but determine what the fees are before you proceed.
Lastly, when buying French Riviera real estate, you want to have commission charges in mind.
These commissions are the fees charged by the real estate agent for the purchase.
The fee normally represents between 4% and 10% of the purchase price of the residence.
Real estate agents can set their own commissions, and the cost of this commission is paid on the seller or buyer, depending on the agreement. In other words, there’s no standard agreement and instead varies. Normally though the purchaser is the one who is liable for this charge as the commission fees are already built into the selling price.
This is obviously something you need to ask about when contacting an agent and start looking at properties on the French Riviera.
So before you start signing any contracts, you need to ask if you are liable for their commission fee before.
A trick that any use to save some money is to deduct the agency commission fee from the sale price and instead pay it directly to them. That way, you’ll decrease the notaries cost.
This is, however, something that needs to be clear before you sign the initial agreement.