In our first episode of the 3 Pillars Podcast: Wealth Management Series, special guest Delphine Belin and host Peter Harper discuss investing and owning real estate in France.

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Transcript TL;DR

Peter Harper: Hello and welcome to the Three Pillars podcast. I’m Peter Harper, the managing director and CEO of Asena Advisers. If you’re not familiar with the business, we’re multifamily office advising foreign family offices and private clients on US direct investment and mergers and acquisitions.

In this episode of the Wealth Management series, we’ll be discussing investing in French real estate with our special guest, Delphine Belin. Delphine, it’s great to have you here with us today.

Delphine Belin: Hello, thank you Peter for having me. And as mentioned, my name is Delphine Beien and I’m a French native, with dual US French citizenship. So I have a master’s degree in international law from the University of Burgundy in France. And I also have 30 years of experience managing real estate in France and advising US citizens on fiscal, administrative and estate planning matters.

Peter Harper: Fantastic, why don’t we kick off? I mean, France is probably my favorite country in the world.

Delphine Belin: Great.

Peter Harper: And I love French wine, French food, all things France. So I was very excited to be talking about this topic. I think a great place to start, is that for any American, when they’re going on that adventure, falling in love with a country, trying to understand general market differences, legal differences can kind of feel overwhelming. Maybe we can start off with some general buying information investment 101 when you’re thinking about investing and buying real estate in France.

Delphine Belin: Sure. I will talk first about something pretty obvious. But when a property is located in France, French law applies regardless of the nationality of the owner. And that is true for all transactions or procedures and fiscal matters. So that’s the first thing that people should know. And then I would like to mention a person that every buyer will have to interact with when buying a property in France. And that person is the French notaire. So it’s not like the American notary and there is no equivalent person in the US. The notaire is a hybrid, high trained lawyer in private civil law who is appointed as a public official and whose duty is to the state. So it’s a mix of private and public and they have a monopoly on property conveyance matters and it covers all related transactions, succession estate planning, donation, etc.. So that’s a big difference between US and France. And last, I want to say that unlike in America, there is no transparency and centralized information on real estates. It’s quite difficult to compare sales – there is no multiple listing services like we have here, and when a French seller is ready to list his property, it will put it in a different agency and sometimes there is different prices for the same property. So it’s a few pointers that, you know, it’s a different country; different rules

Peter Harper:  That’s super fascinating Delphine So a notaire is public and private. Do you have an advocate in addition to the notaire? If I’m an American and I’m saying, OK, I’ll make the decision, I love France, I’m about to go and explore, who are the people that I need to kind of engage with at the start to start that process?

Delphine Belin: So it’s a very good question Peter. So since French law is going to be applicable, it’s crucial for an American citizen to be informed and to consult with a professional, even if they speak French. The cell contract should be reviewed by a specialist who can alert the buyer of any red flags and misinformation. The notaire is a mandatory process, so the selection of an attorney is very important. And I will recommend American investor to choose one that speaks English and has an international law background. It’s not super easy to find, but know that you’re notaire doesn’t have to be local. Even if you want to invest in the French Rivera, your notaire can be based in Paris, for instance. And also the buyer and the seller don’t have to have the same notaire, they can have their own at no extra fees.

Peter Harper: Ok, great, and you had mentioned that there is no sort of central location As far as, you know, in America there is a handful of websites like Zillow and various other things, and then the big agency sites where people kind of use that as a short list before they even engage with a buyer’s agent As far as trying to first find someone, it sounds like then the relationships, the individual relationships with whoever the person is that’s going to help you locate the property is even of higher importance than it would be in America. Because how do you even find the right deals or good opportunities?

Delphine Belin: Yes, well, I think that once, you know, an investor has made his homework and narrowed down the region that they want to invest in, then there are some renowned real state agencies that will help you. In the meantime, you know, it’s hard for Americans to travel right now. Internet is your best friend still. And even if there is not a full transparency, it gives you a good idea of the market. But yes,  once we can travel again, exploring the region in person and meet with a good real estate agency would be my advice.

Peter Harper: Fantastic. I’m a tax attorney by background, and we are kind of always focused on the numbers. One thing that always is interesting to me when I’m looking at global markets and foreign markets is holding costs and sort of understanding what the carrying costs of an asset in various markets are like. When someone’s looking at buying in various locations, what type of indirect taxes or costs should they be sort of having in their mind, and what does that kind of look like as a percentage of the sort of capital invested in your experience?

Delphine Belin: So another very good question. So you can add, around eight percent of the purchase price. when you buy your property for the notaire fees so that’s something to keep in mind.

Peter Harper: Yup

Delphine Belin: And then beside the usual property tax, there is an annual tax that comes with ownership in certain situation and it’s called Impôt sur la Fortune Immobilière (IFI). And that could be considered as a French wealth tax on real estates. It only concerns property situated on the French soil and whose value exceeds 1.3 Million Euros.

Delphine Belin: So I want to reassure potential buyers because as unpopular as the tax appears, its impact is not as widespread or substantial as one could imagine. In 2019, it only concerned one hundred and forty thousand owners, and they pay an average of fifteen thousand Euros per household. And as another practical example, on the property that is worth two million, the wealth tax will be around 7,000 Euros.

Peter Harper: That’s great. It’s interesting to get that statistic because, you know, property taxes vary from place to place across the US, but in most markets that are the more sort of affluent markets, that’s actually not prohibitive when you compare that to what I think Americans would be used to paying as far as property tax.

Delphine Belin: I agree. It’s just that the French have a bad reputation with taxes. And when you hear wealth tax

Peter Harper: I agree. I mean, listen to those stories myself. I think one of the things that always fascinates me is – I love the romantic notion of renovating a chateau or villa or some form property in the French countryside, but I think the sort of notion, the sense of “how affordable are they? and what are these ongoing costs with that?”. I mean, one other thing that I think that would be interesting to understand is that given the history of France, how – in the age of some of these properties, assuming that they’re looking to buy something that’s older – how challenging is it to remodel or renovate a property that someone might be buying as a foreigner? And how would someone even sort of go about thinking about that if they’re looking at places to buy?

Delphine Belin: So it is not a problem usually. And a lot of my clients that make big renovations in a chateau or property usually have a sort of an agent right there in France that can help with translation and of the architectural plans, etc. Because English,  it’s spoken in Paris and cities, but countryside, you might be out of luck. So there is some English person, an American person, that you can find locally that will help you with the work, make sure that they do what you want. But then it’s not very difficult, and we have very good builders in France.

Peter Harper: Yep, fantastic. And so Delphine, on the back of all this, I think what I’m hearing is that the opportunity to buy real estate in and renovate real estate to a high quality, given the generally high level of the builders or artisans that are used to dealing with quality, all the product is at a different level and is not something that you should be nervous about. It’s about having the right connections.

Delphine Belin: Exactly

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Peter Harper: Of the back of that, what are you seeing in the markets? I mean, I think in America, when the pandemic kind of hit, everyone started having thoughts back to prior to the financial crisis and was saying, OK, we’re going to have major upheaval in real estate markets. But quite the opposite of that happened and things are kind of taking off. What are you seeing within the market as a whole when it comes to French real estate? And I’d be interested to know which regions within France you think are the most interesting at the moment.

Delphine Belin: Ok, well, you know, definitively the pandemic happened, but there is some sort of optimistic economic markers despite the pandemic. The French GDP is expecting to go back to its pre covid level at the beginning of 2022. It’s good news. And France seems to be to have been less impacted by the global crisis because its GDP, is less based on exportation. So that’s a good point. Infection rates are low as well as interest rate on French mortgage. The housing prices have been going up since 2016 and they’re expected to continue that rise. Unfortunately, with the pandemic and the border closures, the foreign investment in real estate have been at their lowest level in 10 years. But again, the return on foreign investors is expected. They usually represent between 10 and 20 percent of the buyers. And with the return of the housing market in Paris, is predicted to increase significantly in 2022. And also, I think it’s very true in France that we can observe a shift from urban life to rural life. A lot of people with remote working, have invested in houses. Instead of living in a small apartment in Paris or in the big cities, they have purchased houses in the countryside or in a small town, and they have a garden. And that’s a big tendency in France. And that also explains why in 2020, the Parisian market dropped by 18 percent in terms of the number of transactions.

Peter Harper: And that’s fascinating, I mean, I think that sort of trend if you compared that with New York City, probably that has been a similar trend line as well. We’ve seen similar things happen. And then in the US, in certain markets, Palm Beach, where I’m based, is seeing an astronomic rises; as far as volume of sales was up 300 percent in the last 12 months because of, you know, huge migration numbers from northeastern states, people looking for similar things. Delphine, find in light of that, looking forward to the balance of this year and next year, what markets do you like and why?

Delphine Belin: So Paris is always a very sure value. The distinction between Paris and the rest of France is that your investment is going to cost you twice as much with an average of 1,100 euros per square foot. But the Parisian real estate market is very good for resale and capital gain, with an increased value of 29 percent over the past 10 years. So Paris is always a sure deal and foreign investors are coming back and apparently, they want to invest in France. Just know that the return on rental investment property is lower in Paris than in the rest of France and is because there is a higher purchase price and higher property tax. But outside of Paris, there is a ranking of the 10 best places to invest, the ranking is based on capital gain, potential of employment, demographic perspective, economic development, proximity to Paris – there is a very well-developed train system in Paris with fast train and all the towns I’m going to mention are within two hours of Paris. There are usually university towns and touristic towns. That’s the common denominator of all those cities. And I’m going to tell them where they are. In number one, we have Rennes. Then there is Nantes, Strasbourg, Anger, Toulouse, Bordeaux, Lyon, Clermont-Ferrand, Tour, Lille, so all those cities have great potential for investors and it’s half the price of Paris.

Delphine Belin: So we talk about Paris, we talk about towns outside of Paris, and I want to mention also the countryside you mentioned earlier, you know, buying your chateau in the countryside, etc. Tt is true, and there are, a lot of chateaus in France. I mean, a lot. It’s not uncommon also to find a very reasonable price, old stone house with character and charm. And depending on the condition, you know, for 1,000 square feet property that will cost between 50,000 and 100,000 euros. So it’s very reasonable. What I say is not true for a certain region in France, the Luberon, Provence, Côte d’Azur – the houses are much more expensive than in the rest of France, but also there is a higher return on investment, whether it’s rental or resale.

Delphine Belin: And I also want to make a distinction between the new construction and older houses. The older houses tend to keep their value over time with the slow growth, unless there is a big remodel. And then there is the new construction and their value usually increases the first 10 to 15 years, then plateau and then start to decrease. And the reason why is it’s always possible to build new houses. But there is a limited inventory of older houses and they’re very old and there is very high demand right now. People are not afraid to remodel anymore. With the pandemic, home improvement has been a big deal.

Peter Harper: That’s fantastic and super helpful. Listen, I think we’ve covered a lot of ground. The key takeaways for me is that there is a lot of opportunity to find good buying opportunities in France, whether you’re looking for something in a big city like Paris or in regions that are close to Paris and that don’t be afraid of remodeling, because if you find the right deal, then over time you might find there’s more value in that. Delphine, this has been super insightful. We’ll have Delphine’s information available so if anyone wants to learn more about buying in France, or wants to start their journey, please reach out to us via our website,, and we’ll make sure that you get connected with Delphine so you can get more in-depth advice and learn what to do. Thanks very much again for joining us.

Delphine Belin: Thank you Peter for having me.

To contact Delphine Belin, email her at [email protected] or contact Asena for more information.

Peter Harper