Relocating to France from the US involves important financial considerations. For Americans thinking about moving to France, it’s crucial to understand the different costs associated with the move. This includes navigating taxes, living expenses, and healthcare costs. Proper financial planning ensures a smooth transition and helps avoid unexpected expenses. In this article, we cover the key financial considerations for Americans moving to France, providing essential information on taxes, banking, currency exchange and healthcare.
Table of contents
Cost of living in France
Housing costs
Housing costs can vary significantly depending on the region. Major cities like Paris are most expensive, while rural areas and smaller towns are more affordable. On average, renting a one-bedroom apartment in Paris can cost around 1,200 € per month, while in other regions like Normandy or Brittany, it might be around 600 €-800 €.
When it comes to buying a property in France, the average property price is 582,692 €. This will vary depending on the region. Paris and the French Riviera are renowned for their expensive properties.
Everyday expenses
Daily expenses such as groceries, dining out, and transportation are generally lower in France compared to major US cities. For example, a meal at an inexpensive restaurant in France costs around 15 € per person, compared to 20 $ in the US. Public transportation is also more affordable, with monthly passes averaging 70 € in most cities.
> You might be interested in this article: Cost of living in France in 2024
Healthcare costs
Public healthcare system
France’s public healthcare system, known as Sécurité Sociale is one of the best in the world, providing comprehensive medical coverage to residents. Expats can access the public healthcare system by contributing to the social security scheme. Contributions are typically around 8% of your income, which is significantly lower than private healthcare costs in the US. These contributions grant access to a wide range of medical services, including doctor visits, hospital care, and prescription medications, often at minimal out-of-pocket costs.
The public healthcare system operates on a reimbursement bases, meaning you pay for services upfront and are later reimbursed a percentage by the state. The reimbursement rates vary depending on the service, with general practitioner visits typically reimbursed at 70%, and hospital stays at 80%. Prescription medications are also partially reimbursed based on their classification.
Private health insurance
While the public healthcare system is comprehensive, many expats choose to supplement their coverage with private health insurance, known as mutuelle. Private health insurance covers services and costs that are not fully reimbursed by the state, such as specialist consultations, dental care, and private hospital rooms. The cost of private health insurance in France can range from 50 € to 200 € per month, depending on the level of coverage and the provider.
Having private health insurance ensures more extensive coverage and quicker access to certain medical services, providing peace of mind for expats accustomed to the higher costs of private healthcare in the US. Additionally, some employers offer private health insurance as part of their benefits package, which can further reduce personal expenses.
> You might be interested in this article: Health insurance in France as an expat
Taxation
Income tax
France operates a progressive income tax system with rates ranging from 0% to 45%. The tax brackets are designed to tax higher incomes at higher rates. For US expats, it’s important to be aware of the double taxation agreement between the US and France. This agreement helps avoid being taxed twice on the same income by allowing tax credits and deductions. However, expats are still required to file tax returns in both countries. Utilising the Foreign Earned Income Exclusion (FEIE) and foreign tax credits can mitigate the financial burden. Additionally, France offers deductions for various expenses, such as education, childcare, and certain healthcare costs.
Wealth tax
The French wealth tax, known as Impôt sur la Fortune Immobilière (IFI), applies to residents with real estate assets exceeding €1.3 million. This tax is levied on the net value of the property, which means that mortgages and other debts can be deducted. The rates for this tax range from 0.5% to 1.5%, depending on the total value of the real estate. This tax is particularly relevant for expats with significant property investments in France or elsewhere.
Value-added tax (VAT)
France has a Value-Added Tax (VAT) system with a standard rate of 20% on most goods and services. Reduced rates of 10%, 5.5%, and 2.1% apply to specific items such as food, books, and medical supplies. Unlike the US sales tax, VAT is included in the price of goods and services, simplifying budgeting as there are no additional charges at the point of purchase. This system makes it easier for consumers to understand the total cost of items upfront.
Death tax and inheritance tax
Inheritance tax in France, known as droits de succession, is imposed on the value of the inheritance received by beneficiaries. The rates and allowances vary based on the relationship between the deceased and the beneficiary. For example, children and spouses benefit from higher allowances and lower tax rates compared to distant relatives or non-relatives. The rates can range from 5% to 45%.
France also imposes a form of death tax on certain gifts and inheritances. This tax is calculated based on the value of the gift or inheritance and the relationship between the giver and the recipient. It’s crucial for expats to understand these taxes to plan their estate and minimise tax liabilities for their heirs.
Banking and currency exchange
Opening a bank account
Opening a bank account in France is essential for managing daily expenses and receiving income. Most French banks require proof of residency, a valid ID, and an initial deposit to open an account. It’s advisable to research and choose a bank that offers services in English to facilitate communication and ensure you understand all terms and conditions.
Banks such as BNP Paribas, Société Générale, and HSBC are popular among expats for their comprehensive services and customer support in multiple languages. Online banks like Boursorama and ING France are also gaining popularity due to their lower fees and ease of access. Having a French bank account will streamline transactions such as paying rent, utilities, and receiving your salary.
Need help opening a bank account in France? Check out our expat care packages now.
Currency exchange
Fluctuations in the exchange rate between the US dollar and the euro can significantly impact your finances. Managing currency exchange is crucial to minimise costs associated with moving and living abroad.
To make the most of your money transfer, consider using a foreign currency brokerage services like Ibanista. We specialise in helping expats moving abroad by offering exchange rates and low fees for international money transfers. Unlike traditional banks that often charge high fees and offer less competitive rates, we provide a cost-effective solution for transferring funds between the US and France.
Our services are tailored to meet the needs of expats, ensuring that you get the best possible rate when converting your currency. By using Ibanista, you can save a significant amount of money, which can be better spent on settling into your new life in France. Book a free consultation call to with one of our currency expert or request a quote today.
Moving and settling costs
Moving services
Hiring a moving company to transport your belongings from the US to France can be costly. Prices vary based on the volume of items and the distance, but it typically ranges from 3,000 $ to 6,000 $.
Initial setup costs
Initial costs for setting up your new home in France include deposits for rent, utility setup fees, and purchasing new furniture or appliances. Budgeting for these expenses is crucial to avoid financial strain during the transition.
Final notes
Moving to France from the US involves several financial considerations, from understanding the cost of living and healthcare to navigating the tax system and currency exchange. By planning ahead and being aware of these factors, you can ensure a smoother transition and enjoy your new life in France with peace of mind. Whether it’s budgeting for everyday expenses or understanding the tax implications, thorough preparation is key to a successful relocation.
