FACT FILE - Buying a property in France
There
are now more and more people buying a holiday home or settling
in France. Below is a brief guide.
Purchase Procedure
The
normal procedure when purchasing a property in France is
to sign a preliminary contract, which is usually drawn up
by the agent, and pay a deposit of 10% of the purchase price
which is held either by the notary or some times by the
agent in an escrow account. Completion normally takes place
2 to 3 months afterwards, at which time the purchaser pays
the balance of the price + the conveyancing costs ('frais
de notaire') which come to around 6.7% in the case of a
resale, and around 2.5% if it is the first sale and the
property is less than 5 years old.
Notaries
- Notaires
In
France the notary's job is to register the sale of a property,
and ensure that all the legal requirements are met with.
The purchaser has the right to choose his notary (most agents
can recommend a reputable one), and if the vendor also wishes
to appoint a notary he may do so. This in no way affects
the amount of the conveyancing costs, which at the moment
come to a total of about 6.7% of the purchase price + the
costs of the paperwork if a loan is involved. These costs
are borne by the purchaser.
Agents
Estate
agents in France can only operate with a licence, or 'carte
professionnelle', and should also be members of a recognised
association (syndic.) such as the FNAIM, UNIT or SNIP. You
are advised to check that any agent you are using DOES conform
to these requirements and is therefore covered by professional
insurance.
Sru
Law
The
new law, which came into effect in June 2001, provides the
purchaser with a 7 day 'cooling off' period, during which
time he can change his mind about buying the property with
no questions asked. The only requirement is that he notify
his change of mind by registered letter before the expiration
of the 7 day period. This law used to apply only to new
properties, but now applies to ALL purchases by a private
buyer. If the purchaser is a real estate professional, eg
a 'marchand de biens', he does not benefit from this withdrawal
period.
Surveys
Surprisingly,
most French people are not used to having surveys carried
out. New buildings nearly always carry a 10 year warranty
on construction, but if you are buying your dream stone
farmhouse (if you are lucky enough to find one!) there is
nothing to stop you having a survey done, preferably within
the 7 days' 'cooling off' period.
Utilities
Utilities
should be transferred into the purchaser's name on the day
of completion. Most agents will perform this service. If
you are not a French resident the easiest solution is probably
to arrange for a direct debit to your bank account, with
the bills sent to your home address so that you can keep
track. It is therefore advisable to open a French bank account
before completion so that you are already in possession
of all the forms.
Capital
Gains Tax
Non-residents
of France and French owners of secondary homes are liable
for capital gains tax when they sell; after various deductions,
this amounts to 16% of the profit for EUROPEAN residents,
and 33% for residents of non EU countries. French owners
of secondary homes are liable for 16% + 12%(28% total).
Inheritence-
Wills
It
is important to know that French inheritance law is very
different from that in England… the children cannot be disinherited.
You should be aware that FRENCH law applies to any property
you own in France, even if you are not a French resident.
It is possible to leave your share of the property to the
surviving spouse, but this will require a specific document
to be drawn up, preferably at the time of purchase. Your
notary or lawyer can best advise you how to do this. Look
into making a will in France as well as your country of
residence.
N.B.
This information should not be relied on for accuracy and
is presented here without the responsibility of jml Property
Service and the website it is being displayed at. ©jml property
Services 07-05
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