How to buy a house in France as a Kenyan

If you have found yourself gazing into windows of French agents immobilier or online at french properties for sale, it is important to know the quirks of the French property market first. Buying a property in France is tempting. You tend to get a lot more for your money than other countries. It is easy to picture yourself enjoying a glass of local wine on your own sunny terrace. However, making the decision to buy a home in France is a big commitment; it can be an expensive mistake if you get it wrong.

France is one of Europe’s core performing housing markets. It continues to attract international investors. How do you go about buying a property in France?

Proof of your family situation

  1. French resident card, Passport, French National Identity Card

Note that a Student card is not acceptable

  1. Marriage certificate, marriage contract and the Family book (Livret de famille) if you have children.

Documents concerning your income

Work contract

The last 3 month’s salary slips

The last two years tax notifications

The last three months bank statement 

Rent receipt

Amortization table for a real estate loan

Please note that more documents might be required to complete your file depending on your financial, professional or family situation.

The work contract is an important element in the preparation of your file, this is because the bank can evaluate your professional stability. 

Types of work contract

 Long term contract(CDI)

It is one of the elements that assures a bank. The bank prefers long term contracts as to short term contracts, as somebody is considered professionally stable.

Short term contract(CDD)

In the case of short term contracts, the applicant must provide 18 months salary slips without interruption

Short temporary employment contract

For those applicants holding temporary employment contracts from temporary employment agencies for long periods of time, they must submit 24 salary slips without interruption

Bank statements

The bank will go through your bank statement thoroughly. Make sure to avoid bank overdrafts, rejection charges, big withdrawals and consumer credits.

Savings

If you are planning to get a mortgage, the best way to buy a house is to save up atleast 10% to 15% the price of the house. It is advisable to open a savings account like life insurance and make regular deposits in this account.     . 

Consumer credits

Although any type of credit could be labeled consumer credit, the term is usually used to describe unsecured debt that is taken on to buy everyday goods and services i.e a car. It is not usually used to describe the purchase of a house, for example, which is considered a long term investment and is usually purchased with a secured mortgage loan.Consumer credits can go upto 75,000 euros.

Repercussions of having a consumer credit

The bank might be put off if you have an unpaid debt and your capacity to borrow is greatly reduced due to increased expenses. A consumer credit should be avoided where possible as it can act as a hindrance for any real estate project.

WHICH TYPE OF PROPERTYTO INVEST IN

Primary residence

Your primary residence is your home, whether it is a house, a condo or a townhome, if you live there for the majority of the year and can prove it, it’s your primary residence, and it could qualify for a lower mortgage rate. The benefit of buying your primary residence is tax reductions i.e TVA 5,5% , TVA 20% or a zero rate loan. The tax reductions depend on the town where you buy your property. These tax reductions enable first time home owners to buy the new housing.

Secondary residence/Rental property

This type of investment is proposed to people that have only bought a primary residence. Please note that you cannot have two primary residences.

Optimization Properties

For individuals, one of the optimization solutions is to invest in real estate while taking advantage of the measures put in place by the State to reduce taxes. For 2021, these include the following laws:

  • The PINEL law: any person who invests in new real estate and who undertakes to rent his property for a certain period, can obtain a tax reduction of up to 21% of the amount of the acquisition within the limit with a ceiling of € 63,000.
  • The Censi Bouvard law: anyone who makes a furnished rental investment to obtain a tax reduction of up to 11% of the amount of the investment for 9 years.
  • The Malraux law: any person who makes a rental investment in built buildings located in a remarkable heritage site or in certain degraded old districts can benefit from a tax reduction of 22 to 30% under conditions.
  • The status of non-professional furnished rental company (LMNP): this micro scheme allows you to be taxed on 50% or 71% of your rental income, provided that this income is less than 23,000 euros per year or does not exceed not 50% of your overall income.

Buying property through SCI (Société Civile Immobilière)

An SCI is a rather specialist type of French company (société) that is constituted for the ownership and management of real estate (immobilière) 

The fact that it is also civile means that it is a non-trading company, thereby distinguishing it from a company set up to pursue commercial activities.

Where an SCI is used for the purchase of a private home the owners effectively then become non-paying tenants or occupants of the property owned by the company.

The company may also hold more than one property in it, including main and second homes, as well as properties to for letting.

Many French and international buyers choose to buy a French property through an SCI because of the advantages it offers over the other two forms of ownership.

The main reasons are:

  • To facilitate purchase of the property by multiple, often unrelated, persons;
  • To provide stability and continuity in the ownership and management of family property;
  • To facilitate the transfer and ownership of property;
  • To avoid the constraints of French inheritance laws;
  • To create tax advantages;
  • To protect the family home from business creditors.

To have a guideline, it is advisable to consult a real estate specialist inorder to make a wise decision based on your current situation.

Get informed

Diana NJOROGE 

Real Estate Investment Advisor

HOSANNA FINANCE

Tel: +33781434031

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