Buying real estate in France
French laws regarding buying property can vary slightly depending
on the type of property you buy.
Capital Gains tax is chargeable on second home sales owned for
less than two years. This would be charged at 33% with reductions
on the profit percentages for each additional year of ownership
up to 20 years plus.
There are no restrictions on foreign ownership.
Buying real estate in France
For a regular freehold residential property.
An agreement to buy is negotiated between the buyer and seller
and an initial contract is drawn up by the Real Estate Agent or
a Notary and signed by the buyer and seller which legally binds
both parties.
You would now pay a deposit of about 10% of the purchase price
which remains held in a special account by the Notary or selling
agent until completion of the sale when the property will no longer
be open to offers from other parties. This contract is known as
a bilateral agreement, compromis de vente in French, and the most
popular type of contract. You would lose the deposit if you do
not proceed with the purchase.
The final contract is signed at the
Notary’s office and
the deeds pass to the buyer and the land registered. You must then
pay the balance of the purchase price to the Notary who will then
pay the vendor. You will also need to provide the Notary a copy
of your birth certificate translated into French and, if applicable,
a copy of a Marriage Certificate, also translated.
Solicitor / Lawyer
A solicitor/lawyer is recommended to protect your interests and
conveyance the property title when buying real estate in France.
They will be in addition to the Notary who is mandatory for property
transactions.
Fees
You would expect to pay a total of over 12% of the selling price;
less for properties under five years which have VAT (20.6%) built
into the price.
The Notary fee would be around 3%, transfer tax 7.5% (less than
1% for new properties) and registration fees around another 6%.
The vendor should pay the Real Estate Agents fees.
Property Tax in France
Real Estate taxes are levied on property plus residential tax
for living as a owner occupier or as a tenant (renting or not).
Both are calculated on the average property rental values.
*In France new property purchases attract Vat of 19.6%, but this
can be avoided through the leaseback scheme. Leaseback restricts
the number of weeks per year that the buyer can use their property,
so that it can be rented out as holiday accommodation. Popular
in ski resorts and coastal areas with developers quoting an average
of 5-6% gross annual rental income. In some cases the buying price
you are quoted is with the tax already recovered by the contractor.
Leaseback Property
Mortgages
You can borrow up to 80% from French banks and should be declared
at the time of the preliminary agreement. The normal repayment
term is 15 years.Click here to arrange a mortgage in France
For more information on buying property in France, please contact
the Real Estate Agent or visit the French Governments website:
www.info-europe.fr |