ONGOING COSTS

Taxes

American buyers will be pleased to learn that property taxes in France are generally lower than comparable taxes in the United States. The biggest tax bites in a property transaction are (a) the transfer taxes at closing, which are included in closing costs, and (b) capital gains taxes when the property is sold.

There are two principal types of taxes levied on real estate:

• Taxe foncière, which must be paid whether the property is inhabited or not.
• Taxes d'habitation, local taxes (including the taxe d'habitation) paid to support village or regional services such as trash collection.

The local taxe d'habitation varies with the number of people who inhabit the house. This tax is generally minimal, amounting at most to a few hundred euros a year regardless of the value of the property.

Property insurance

A property must be insured against fire and catastrophic loss. Mortgage lenders will require proof of such insurance before issuing a loan commitment.

Let us again use the example 700,000 € property in Provence. Assuming the contents are insured for 100,000 €, and further assuming a policy rider to indemnify the owner from claims due to rental tenants, the annual premium for such a policy in 2008 will be around 1,750 €.

For an apartment in a central Left Bank arrondissement with a 100 m2 worth 500,000 € with contents valued at 50,000 €, and also with a rider for rental tenants, the annual premium will run in the vicinity of 1,200 €.

As in any country, the competence and dependability of insurance brokers varies widely. JUST FRANCE SALES can recommend to its clients a reliable English-speaking insurance broker experienced in dealing with overseas buyers.

Utilities

EDF (Electricité de France) and GDF (Gaz de France), both state-owned companies, are the two major utility providers in France. France Télécom, now privately owned, has a virtual monopoly on local service in the country. Happily, recent changes in French and European law have led to more competition between long distance carriers, and discount international plans are now available.

Electricity

American buyers will find that electricity is about 25-35 percent more expensive in France than in the U.S. EDF offers a complicated system of programs designed to help subscribers economize by avoiding consumption during specific hours and on specific days of the year. The cost of natural gas and fuel oil is also somewhat higher in France than in the U.S.

Telephone

France Télécom rates for installing new lines and adding services are quite reasonable. Normal monthly telephone subscription rates run about 32 € per line. All local calls, as well as reduced-rate calls to Internet service providers, are billed at a fraction of a euro per minute. While rates for international calls can be shockingly high, JUST FRANCE SALES can guide you to an alternative carrier that offers reliable service to the United States at less than 10 centimes per minute.

Water and sewage

Utility costs may include quarterly water and wastewater treatment bills for properties hooked up to municipal water systems. These charges are roughly similar to those in the U.S.

Satellite or cable TV reception

Owners who want a wider selection of TV viewing than the standard five French broadcast channels will subscribe to a cable or satellite reception provider. Service must be established through certain local companies that vary considerably in rates and competence. Monthly subscription rates are comparable to or less than those in the U.S.

High-speed Internet

With the exception of some extremely remote communities in central France, high-speed Internet service is now available in even the smallest village. The cost is 30-40 € per month.

As your closing date approaches JUST FRANCE SALES can advise you on security deposits that may be required before certain utility services are initiated. We can also tell you how to:

• Transfer utility accounts to your name
• Subscribe to a telephone long-distance plan that will substantially reduce tariffs for international calls
• Set up a plan whereby you can determine telephone tolls for a specific period by using the Internet or an automated telephone system. This service is useful when calculating telephone costs that are billed to renters.
• Arrange with a local provider for installation of cable or satellite television reception.

Maintenance costs

Having waded through the costs of acquiring, insuring, and perhaps renovating a property, the proud new owner now embarks on the road trod by any homeowner in any country - maintaining and improving the property in a style befitting a dream home. The non-resident owner must also take into consideration the cost of retaining a local caretaker or housekeeper who will check up on the property periodically and open the house for repairs or deliveries.

Given the great number of human variables involved in ownership, including the nature of the property and the expectations of the owner, it is impossible to estimate the annual expense of maintaining a given property in France. However, we can say with assurance that the rates charged by electricians, plumbers, carpenters and other tradesmen offering services essential to home maintenance are not out of line with those in other Western countries. In our experience the rates compare quite favorably with those in our own country, the United States, while the quality of service in France may be considerably higher.

In addition to taxes, utilities and normal property maintenance, the prospective owner should keep in mind the expense of:

• Garden and swimming pool maintenance
• A local caretaker
• Periodic housecleaning
• With most apartments, monthly building association or condominium fees.