I suspect it was used for furniture etc.
If I were your parents I would tell you that you are in no financial position to do this. Your 401k/IRA is not liquid money, and should only be for retirement. So, forget about those amounts in making any calculations.
But, I’m not your parents, so instead I’ll just say, “COOL! I hope it works out for you!”
That is very useful information. Thanks Sanvito!
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But some lenders will only grant mortgages for up to 50% of the purchase price for non-EU nationals.*
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Open a French savings account containing a minimum deposit which covers at least 24 mortgage payments
Just heard back from HSBC and they require a 6-month old bank account as a pre-condition. So that’s good to know.
Good luck with buying an apartment.
One thing I would be concerned about is how property owned in another country is titled and how that might affect any estate plans you might have. Not a pleasant subject, but something to consider.
We do have another 200K or so invested in non-retirement index funds we could tap into if we need to. I, perhaps naively, didn’t think it would be necessary to also use that as collateral with the bank because what I mentioned was more than enough in my head ^_^. But hey that’s what this thread is for.
Do american citizen get taxes on oversea property as well as income? I definitely knew about the income, and it’s “only” an issue when you pay less in taxes than you would in the USA. So, it’s an issue in Dubai but it’s not an issue anywhere in Europe (and most of the world, the US has comparatively low taxes).
As far as the property, any rental management, short term or long term, would have to go through an agency. We are not going to operate anything as we have lucrative fulltime jobs.
Good point about the PMI. Thanks! I had not considered it!
As far as purchase goes, you should revise our net worth upward by 200k as mentioned earlier in this post.
And absolutely. I loathe risk. I loathe gambling. With few exceptions. But what am I to day? 8% inflation is a lot.
[quote=“Pardel-Lux, post:16, topic:962537, full:true”]
I concur with everythin @md-2000 has written. And I doubt any French (or European) bank in general will give credit to a US-citizen.[/quote]
Well my wife is australian, i’m happy to let her own the apartment in full.
What the heck? That sounds more like something you would do to a sanctioned country like Russia. Don’t they remember Normandy? Why I never!
You make excellent points. Yes, maintenance costs are a huge factor in picking a property. Yes, new projects can be easier. We are definitely taking that into account though stock for those is tiny, comparatively. Perhaps the best will be something semi-recent. Perhaps built in the past 5 years or so?
ps: If extreme right candidate LePen somehow wins the 2nd round, we might reconsider our plans.
You might find a castle for < 300k pounds
Some sweat equity required 
Brian
Why not just go to France as often as you want and just stay in hotels or houses rented through Airbnb when you do?
Why not rent? Fair question. I thought the answer was obvious 
:
We would like to diversify our future savings away from the stock market, especially one that is at an all time high. We are already “exposed” to it as bankers say. Inflation is 8% these days, and possibly rising. In other words, it’s good to ask if we can afford to buy, but I also asked myself: Can we afford NOT to buy? Inaction might cost us 10K a year in inflation. $20k in lost equity potential. And that’s even if we don’t rent the apartment or use it at all. Sounds mighty unwise to me.
Also, and anecdotally, the last time we rushed in to buy when real estate prices were rising, waving inspection and making an offer the same day, it saved us about 100K in 9 months. And we lost 100K for not buying a year earlier. The lesson I learned is to have a bias for action and not procrastinate like I did for my 401k for 10 years.
And so, as the french say, we are trying to “lier l’utile a l’agréable” (link the useful to the pleasant) with this purchase, by investing in real estate in a nice city we like (and can hopefully afford).
Out of interest, where abouts in France are you thinking? This isn’t a financial question BTW, I just love property hunting.
Well, the IRS started it. Basically, they tax even Americans residing abroad with no connection to the USA except citizenship. As opposed to other countries - If I depart Canada and have no connection showing I may return soon, I pay no taxes for the full years I am not resident, or on income earned abroad while not resident - except there is a basic tax on the pension I am earning from Canada… For the USA, you could have left America with your parents when you were 2 years old, technically you still must file income tax forms with the IRS on your income from anywhere.
(A number of dual citizens here in Canada were dealing with that a few years ago - since the mandatory $100,000 foreign asset declaration would ensnare most Canadian retirement savings plans - and failing to declare was a punishable offense, but declaring it put you on the IRS radar for “why haven’t you filed tax returns up until now?”. I believe they clarified the rules a bit more, but I think that was only for Canadians.)
Banks are also reluctant to deal with the spouses of Americans - since the USA requires joint filing, as I understand so the spouse is similarly creating a risk for the bank. That was an additional issue for dual citizens here, the risk the bank they dealt with for most of their life would cancel their accounts if they found out they were American.
AFAIK there’s no tax on foreign property, but you must declare assets or property over $100,000 (?) held abroad. I assume this also means if you later sell for a profit, that money is taxable in the USA. (and France?)
I assume France has similar rules to Britain about renovations to heritage buildings, if you end up going that route.
Again, you need a visa AFAIK to live/visit in the EU more than 90 days a year(?). For less than that long, why would you bother buying a property?
I know here in Canada, if I don’t have someone physically checking my house (every day or two) while I’m not home, my house insurance could be void. As others mention, I would assume a property management firm might take care of that?
Is an apartment in France like North America - here, if a condo building needs major repairs - say to a leaky roof, or garage pillars - then everyone has to chip in an assessed amount to do the work. (unless you can defer the work, like they did in Florida…) What about heat, electricity, insurance, other expenses? Like I said, you have to anticipate that the cost of the purchase is not the only expense. Not sure how municipal property taxes work in France. I also recall reading France has a “wealth tax” assessed on your total assets; not sure how that applies to foreigners, especially non-millionaires.
It is the way the USA wants it, the European banks would rather do without this threat from the IRS. I guess the USA considers this to be a sanction against Europe, potentially at least, and not a burden on the USA (their citizens will cope, of course: it’s the law!). This is also relatively new, post Clinton for sure. Your wife may be Australian, but she will be asked whether she has any business relationships with the USA, income there, shares… or a husband.
I find it difficult to google this subject, as when I try anything related to banks, Europe and taxes the first results are flooded with Russian assets because of sanctions ans Ucraine, but I found this:
It is rather long and more centered on Swizzerland, but shows how complicated the matter can be. Perhaps asking a tax adviser would be a good idea.
I would still consider renting and investing in something else. But that is just me, of course.
Just as an aside: the stock market in the USA has been at an all time high around 75% of the time during the last 120 years, has it not? The exceptions being post '29, post '73, post dot(com) and post '08, and only post '29 for a substantial period of time.
90 days within 180 days, so you can effectively stay there for six months a year, just not all in one go. And presumably the OP might consider renting the property out when they aren’t there - that’s my plan. They’ve already stated it’s an investment to enjoy, not a home.
Interesting, I’ve never heard of that for home insurance at least here in the UK. I mean, how would they know?
Highly likely, I would have thought.
I did a broad calculation for a 3 bed rural house which worked out about €300 per month, including broadband, gas & electric, insurance, and property taxes, of which there are two for non-residents. These also include TV licence and waste collection. Of course, that doesn’t include property management fees or service charges for apartments. Or maintenance.
Non residents are only taxable on this wealth tax if their property is worth over €1.3million. Of course, you would need to pay tax in France on rental income, and capital gains on selling if the property has increased in value - not sure if there’s a threshold there.
My wife and I did something similar, well, she did as it was her money. She originally wanted to buy in Chicago, which I was against. She eventually bought a nice place near San Diego, which is closer (only a 10 hour drive from where we live). Financially, it was worked out well in this housing market, but quite a bit of that is due to the location. Even so, there are continuing costs that you need to consider. Yes, it does diversify our holdings, but it has it’s downsides too.
How often and for how long will you be able to visit? You will spend much of your time there in the first months, maybe a year, doing minor repairs and improvements. I don’t know your location, but for me if we bought in Chicago it would have been a real pain as that’s a good two day drive. Frankly, I wouldn’t ever go if she bought in Chicago, but San Diego is a long but reasonable drive.
Note: inflation is now 8.5% as of today, making my search even more justified and urgent.
Toulouse is #1, followed by Montpellier in France. My younger brother lived in both. There is no science to it 
Yeah but it’s the European banks that said US customers aren’t worth the extra hassle that are being rude. I feel rejected.
The USA doesn’t require it. You just pay more taxes if you file separately so few couples do it.
Hmm, good point. Yeah that makes sense. Thanks for the info.
we’re definitely not wealthy enough for that tax. Likely we never will be, but fingers crossed we are!
Not often and not for very long. It is imperative that it either be vacant or under some A to Z agency management of some kind where they don’t need to contact us for anything except to ask how much we’re willing to discount our rent to get tenants quickly and maybe approve repairs once in a while.
There are no direct flights to Paris from our home, much less Toulouse! it’s a 20h trek doormat to doormat at best.
I’ve made that trip before. It definitely left an impression.
I don’t envy you Lautrec to Toulouse.
[JFTR: I probably could have helped myself. I chose not to.]
I seriously suggest that you buy a property closer to where you are located. You’ll be able to visit and enjoy it much more often and it will very likely still perform quite well at it’s main job of asset diversification. When you want to go to France, be like Dewey Finn and stay at hotels or vacation rentals. It’s not like Toulouse is a huge attraction.
I don’t know about anyone else, but it was not obvious to me that you thought, “Perhaps we should diversify outside the stock market. I know; we’ll buy a second home in France!” And if your goal is diversification, direct ownership of foreign real estate is only one way of accomplishing this. It may not be the best way, which is one reason I suggested talking to a financial advisor. You could instead, for example, invest in REITs or a mutual fund that’s in the real estate sector.
You are correct that the stock market is at all-time high. But so is real estate, I think.
The “hassle” is that if the IRS decides the bank failed in its duty, they will I think fine them 1/3 of every transaction the bank does with a US bank. or some similar penalty, until it is all put right. (I read an article and the fine was some extraordinary imposition on the bank) The upshot is, if you are a bank that does any business even close to the USA, (like, do you have customers who accept VISA cards and may expect payment from US tourists?) the fine can become very hefty. Then, you need to pay expensive lawyers in the USA to sort out whether the bank was at fault, and the case can drag on for a while - when is a legal matter ever short and sweet? And why would the IRS be in a hurry to settle and give back money, when they have the money in their paws? It’s a huge amount of extra paperwork and high risk with no great reward to have American customers.
Oddly enough, just Americans. Nobody else has been the 500-lb gorilla in the banking world.
If the insurance inspector says something like “vandals apparently turned on the taps and plugged the drains and the evidence is the water ran for a week”, or “the rodent damage is obviously a month or more old” or any other such issue. My father-in-law (who used to be an insurance agent) is happy to check our home regularly when we’re on vacation.
I heard the story of the fellow who had an electric on-demand water heater. they were away for the weekend when the cat walking across the taps turned on the hot water. fortunately, they were only gone for the weekend and the drain was not plugged, so they could still afford the electrical bill.
Never mind, I think my numbers are off
Upon re-reading, You’re right. It’s not obvious. 
I knew about REITs and it is a great advice. It spreads the risk over many properties and there is little overhead. I did not know about real estate mutual funds. We might go that route if the realities of buying are too daunting.