Pay Less in France

Although France may seem inexpensive, one should not omit the opportunity to save some money. Here are a few tips which, depending on individual circumstances, can reduce expenses (thereby providing more money for wine, restaurants and fun in general) by up to 10%:

• House Price. When buying property in France, don't assume that the asking price is the final price. Just as at home, there is almost always room for negotiation. Even if the asking price seems very reasonable, keep in mind that prices in much of France are relatively low, so the 'reasonable' asking price may well be above the market rate.

• Taxes. Aside from the bit three (income tax, sales tax, inheritance tax), the two main taxes in France are Taxe Foncières (property tax) and Taxe d'habitation (habitation tax). These roughly correspond to the 'council tax' in the UK. However, they are broken into two separate taxes, both of which are relative to the value of your property (typically calculated based on square meters) and the location of your property. Together, they can easily run to thousands of euros per year. When buying a property, you should verify what the taxes on the property are.  In the case of a property which has been renovated and extended, consider checking that the tax declaration is based on the current condition of the property. Sometimes people 'forget' to declare renovations and extensions, resulting in an artificially low tax rate. However, immediately upon buying the property you may be contacted by the tax office, asking for a declaration of the current size and facilities, which may result in an immediate jump in the rates.

• Food. One of the great attractions of France is the marketplaces. In addition to the quality of food generally being higher than in the large stores, it is often less expensive as well (for comparable products). However, keep in mind that even in marketplaces, premium food will command premium prices. In addition, one can often buy direct from the local farmers, at a lower rate than in the stores.

• Currency Exchange. If you need to convert money to or from Euros, there are two items that you should keep in mind. One is to ensure that you get the best exchange rate possible. The second is that you eliminate, or at least minimize fees for transferring money from one bank to another (e.g. from your UK bank to your French bank).

  • As an illustration, some banks take 5% or more of the money being converted, as opposed to a currency exchange specialist typically taking 1%. This means that if a house costs 100 000 euros, if you use a currency exchange specialist to convert pounds to euros you may need to provide the pounds sterling equivalent of 101 000 euros but using a bank you may need to provide the pounds sterling equivalent of 105 000 euros. Simply by using a different company, you save 4%, which in this example is 4 000 euros.

  • If you need to transfer money on a monthly basis, the difference is typically even more extreme. Firstly, banks take a larger percentage commission for smaller amounts than they do for the large amounts associated with buying a property. Secondly, banks typically charge transfer fees at a fixed rate, which for smaller amounts is a bigger percentage. Consequently, by using a bank instead of a currency exchange specialist, you can lose up to 10% of the amount you transfer monthly (or other periodic interval).