The Cost of Owning a Vacation Home in Europe
Do you dream of owning a vacation home, but haven’t found one that fits your budget? According to a recent Forbes article, the average price of a vacation home in the US is $429,000. That’s a substantial investment, in addition to the cost of ongoing expenses like maintenance, utilities, property taxes and more. While the price and upkeep of a vacation home in the US may seem beyond your reach, a second home in Europe can be more affordable than you think.
In 2022, I purchased a second home on the edge of a village in northwest France. The price of the house and ongoing expenses are less than half, and in some cases a fraction, of what a vacation home on America’s west coast would cost. Additionally, owning a home in France has brought me cultural experiences, new friendships and greater travel opportunities than I ever could have achieved with a second home in the US.
If you’re thinking a vacation home in Europe isn't in your budget, you may be pleasantly surprised as I outline the cost of purchasing a home in the French countryside and the annual cost of maintaining it.
Cost of real estate
Just as in the US, home prices in Europe vary by size, condition, amenities and location, location, location. While looking for my home in Brittany, France, I found the closer a house was to the coast or to a large city, the higher the price. The house I found is an hour from the coast, and 50 minutes to an hour from two major cities. In this area, properties are more reasonably priced. In 2022, I purchased two houses situated on a lot of over 16,000 square feet on the edge of a village with a boulangerie, pharmacy, train station, and easy access to a river-front walking path.
The main house is 880 square feet with three bedrooms and two-and-a-half baths. The second house is 450 square feet with two bedrooms and one-and-a-half baths. I paid 170,000 Euros, plus eight percent notaire fees, which are like escrow closing costs and include taxes on the sale. At the .95 average rate of exchange at that time, I paid around $192,000 in cash. Although France has much lower mortgage rates than the US, mortgages are difficult for Americans — especially older Americans — to secure.
Two- and three-bedroom houses in the countryside, villages and towns are currently on the market for between $125,000 and $300,000 with most under $200,000. My area of France is not the least expensive area to buy property, and France is certainly not the least expense country in Europe in which to own a home.
Exchange rates fluctuate, but for the costs outlined here, I’ve converted Euros to US dollars based on the current average EUR to USD exchange rate of 1.07.
Property taxes and home insurance
This is another area where you’ll see substantial savings in a foreign property purchase. In France there are two property taxes. All homeowners pay the tax foncière. Mine was $867 last year. In 2023, the taxe d’habitation, or residency tax, was eliminated for homeowners when the property is their main residence. But owners of second homes and vacation homes in France must still pay it. It’s generally around the same amount as the tax foncière, but I haven’t received my bill yet as I purchased my house in late 2022 and the tax is not charged the first year. Both taxes combined are a fourth of what I pay for property taxes on my house in Portland, Oregon.
As for home insurance, I purchased a high-risk policy, because the house is empty for a substantial part of the year. Although it's one of the most expensive home insurance policies in France, my annual premium is only $740.
Utilities and internet
My home is completely electric, which is the most expensive way to heat a house in France. I only use the wood burner to heat my house on rare occasions, as I don’t like to pollute the air. But I do budget for a cord of firewood a year. I generally stay there four to five months a year during various seasons. Here’s a list of utilities and what I pay on an annual basis.
Electric $1,935
Water $478
Trash $152
Firewood $210
Internet, cell phone, TV and landline $852
My cell phone service through Orange for $71 a month allows me to make calls to and from anywhere in Europe. It also includes high-speed internet, local television and a landline from which I can make unlimited free calls to the US and Canada. And Orange installed a fiber optic connection at no additional charge. However, there are internet/cellphone/data plans starting as low as $27.
Owning a home in a foreign country will require a local bank account to pay your utilities. French banks charge a month fee, and I pay $10.80 a month for a checking and savings accounts and a debit card with Banque Popular.
This post continues in part two, Budgeting for a Vacation Home Abroad where I review the cost of ongoing maintenance, repairs, setting up a household, and other important expenses to budget for. And I do a full breakdown of all expenses involved in maintaining my second home in the French countryside.
