Buying the Dream: France

Why settle for a country house when you can settle in a foreign country? Carolina Buia reports on making yourself at home in nine to-die-for destinations
Overview: Whether it's because of the food, the fashion, or the history, it's no secret that many Americans have become bona-fide Francophiles after just one trip. And though some Yanks have passed up a good glass of cabernet to accompany their "freedom fries," plenty are still scouring Provence for that second home. Those looking to live in Paris can secure a renovated thousand-square-foot pied-à-terre in the sixth or seventh arrondissements for $850,000 ($600,000 for a fixer-upper). In Aix-en-Provence, known as the City of a Thousand Fountains, a perfectly restored 1,300-square-foot seventeenth-century home is listed at $530,000. Farther east, the Côte d'Azur is a perennial destination for three-quarters of all expats in France. A modern two-bedroom apartment in Cannes without an ocean view sells for $300,000, while a five-bedroom waterfront property in St-Tropez lists for $4 million.
Fine print: There are no restrictions on foreigners owning land. However, real estate listings are a secretive affair in France (only half of all listings are registered with brokers), so you'd be wise to scan the local papers. You will generally be asked to sign a purchase agreement and plunk down a ten percent deposit; should you change your mind after seven days, you might lose your deposit. Financing is readily available. Be aware that some properties may have an unusual rente viagère attachment, whereby you or your heirs promise to make payments to the previous owner for the rest of his or her life in exchange for a low down payment. Drafting a will locally should also be a top priority since arcane inheritance laws that date to the Napoleonic era entitle all of your descendants to a share of your estate unless you specify otherwise.
Hidden costs: It is the French custom for the buyer and the seller to use the same notaire, or attorney; in France, lawyers work for the republic and are in theory impartial. Nevertheless, real estate experts recommend that foreigners hire their own. This does not mean that your fees will double, however, as the two lawyers must split a set fee paid by the buyer (typically 0.8 percent of the purchase price). The value-added tax on a wide array of goods and services is a whopping 19.6 percent.
Rental prospects: There is always demand for short-term leases on Paris apartments, but you'll want to think twice about putting out an À LOUER sign. Aside from stringent laws that make it difficult to evict tenants, rental-income taxes on a furnished apartment in Paris can exceed 40 percent. In the south of France, demand outstrips supply in the summer months: A five-bedroom house in Provence can fetch $1,500 to $2,500 a week, while a similar home in St-Tropez can rent for $10,000 to $30,000 a week. Make sure you lease through a reputable real estate agent. And be aware that demand plummets after the summer, when "it becomes virtually impossible" to find a tenant, according to Brian Groocock of John Taylor Realty.
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