Filed under : French Tax & Legal 101

Compulsory French Life Insurance

In France, compulsory health insurance is required for all buyers wishing to purchase French property. This includes international buyers and expatriates looking to buy French apartments, second homes, leasebacks, and other types of French properties. This may come as surprising news to international buyers, who come from countries where health insurance is not mandatory for purchasing a property.

Commercial Real Estate Sector Must Meet Sustainable Criteria

A survey was taken by RICS Europe surveyors, and the results were shocking: One in five believe that by 2020, 90% of global commercial real estate will fall short of meeting environmental standards if no green initiatives are implemented.

This means that governments around the world will be faced with drafting drastic real estate plans and putting them into action. Although there’s a general view that new buildings are meeting better standards, much change is needed. RICS believes that the top priority over the next decade is to incentivise the refurbishment of existing stock.

This will change how French property investors view the value of French commercial properties. There will be an increased concern about whether the properties meet these sustainability standards, especially if they are interested in investing in the property for years to come.

Major Decrease in U.S. Property Sales

Recent figures show that sales of previously owned properties in the United States dropped a record 30% in May 2010, far more than expected. A tax break that was withdrawn at the end of April was designed to boost sales, and only a 12% decrease in real estate sales was expected. The National Association of Realtors has stated that its Pending Home Sales Index, which is based on the number of contracts signed, fell to a record low 77.6 in May from 110.9 in April. More decreases in U.S. sales are expected for the rest of the year.

Global Real Estate Recovery

The Knight Frank Global House Price Index has shown that property prices in major locations around the world have increased by 53% in the first three months of 2010. Furthermore, for the first time since 2008, annual price inflation for all global real estate markets has again turned positive. However, Asia is experiencing the sharpest increases and the biggest recoveries, while many European countries have not yet recovered.

In Europe, the most positive markets are in Scandinavia, Norway, Sweden, and Finland. Countries with bigger economies, such as France and England, have been slower at recovering as they’ve been more affected by the weakness of the Euro and the debt crisis.

Second Homes for Wealthy French Real Estate Investors

According to a survey taken by Savills International and, France was among the most popular second home locations in 2009. The research found that these French holiday home investors are composed of buyers with significantly higher disposable incomes who are less reliant on mortgages. Savills stated that “in 2010, the overseas second home market will be characterized by cash rich, lifestyle buyers benefiting from lower prices in traditional, established holiday home hotspots.”

This is due to price decreases of up to 30% for properties in popular holiday locations, such as France. More than 20% of the survey respondents stated that they are planning on purchasing additional holiday properties in the future, as long as market conditions and mortgage availabilities improve in those countries.

This is great news for the second home property market in France, especially in Paris.


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