This is a brief guide to buying a French property. It is by no means an exhaustive list of everything to consider and you should get detailed advice on your own transaction to ensure all relevant points are covered.
Also, the procedure for buying a new-build property is different and if you are buying a property or apartment in a co-ownership setting (known as copropriété) other points will also be relevant.
Before you make an offer:
- Most visits to properties are accompanied when an estate agent is marketing the property. You may be asked to sign a bon de visite confirming that you viewed the property through a specific agent.
- Inspect the property carefully. Check the boundary lines and get a copy of the land registry plan. Check access (is it by a communal road or via a neighbour’s private land?). Check if there are any rights of way over the property, or if you need rights of way over a neighbouring property.
- Take a trip around the local area. Are there factories or buildings nearby which may cause a nuisance or pollution? Are there any canals, lakes or rivers which might cause a flooding problem for you?
- While in France visit the local town hall (Mairie) to get as much information as possible about the area. For example if you want to build on land and you will need planning permission, you could find out from the Mairie if there is a planning policy in the area which would allow you to carry out your intended works.
- Think about getting a survey on the property. This is not obligatory in France but it can give you peace of mind. Property in France is sold as seen so it is important that you know exactly what you are buying and what condition it is in. Think about asking an architect or builder to inspect the property for you.
- Find out from the seller or estate agent what items are included in the purchase price (such as furniture) and which items are sold for an extra price. They should be listed in the contract.
Making an offer
If you are putting your offer in writing, get advice on the wording of the offer letter. It’s important that an offer letter confirms it is made subject to any outstanding points on which you want clarification, and be subject to signing a preliminary sale contract.
Work out your financing for the purchase, including your budget for associated costs such as registration tax, the Notaire’s legal costs (the buyer pays these), the solicitor’s costs in advising in the transaction, estate agent fees (if the contract provides that you are liable for this cost), removal costs and all travel costs. It may be helpful to contact foreign currency exchange providers to make sure you get the best deal for transferring money to France.
You should also start to think about how to best structure the ownership of the property. This should take into account your future intention for the distribution of the property under your Will.
The preliminary sale contract
This is usually referred to as a compromis de vente or promesse de vente. If you are buying a new build you will be signing a reservation contract (contrat de réservation).
It’s important to make sure all relevant provisions are included in the preliminary sale contract – these provisions will be repeated in the final sale deed. Watch out for contracts translated into English; the translation may not be accurate and it is the French version that will prevail if a dispute arises.
The contract will include conditions precedent (conditions suspensives) that need to be fulfilled in order for the purchase to proceed. Common conditions are obtaining satisfactory searches (which are carried out after you sign this contract) and getting confirmation that no compulsory purchase rights will be exercised.
If you are buying with a mortgage you will benefit from an additional condition allowing you to back out of the purchase if you fail to get a mortgage offer on the terms specified in the contract. If the conditions are not fulfilled the contract will be null and void and you can recover your deposit.
You will also be given other documents including a dossier de diagnostiques technique (various reports the seller must produce for you, for example reports on the presence or absence of termites, lead or asbestos).
On signing the contract you will be required to pay the deposit, usually between 5% and 10%.
After signing the preliminary sale contract you benefit from a ten-day cooling off period during which you can back out of the contract if you change your mind. It’s better to be as sure as you can before you sign though. You will now need to make your mortgage application, make your final decision on the ownership structure, sort out insurance and organise the rest of your financing for the purchase. The Notaire will carry out his/her searches and obtain all information and documents required to fulfil the conditions suspensives.
If you’re not going to be present at the Notaire’s office on completion day you will need to sign a Power of Attorney document (procuration) in good time. This can be signed outside of France, usually before a Notary Public.
When the Notaire has completed his/her work and searches s/he will notify you of a date for the completion meeting at his/her office – usually about two to three months after signing the preliminary contract. You will need to transfer the completion monies in good time, which will include the Notaire’s fees, disbursements and registration tax. If you need an interpreter to be present at the meeting this can be arranged with the Notaire. Also arrange for house insurance to be effective from completion day.
Make a last inspection of the property before completion – remember property is sold as seen in France.
You should review your Will to make it includes suitable provisions to deal with the distribution of the property on death, particularly as some family members have statutory inheritance rights under French law.
You will also need to work out your French tax reporting responsibilities, such as payment of local taxes (eg taxe foncière and taxe d’habitation), income tax (impôt sur le revenu) and other taxes in France such as wealth tax .
To obtain a copy of our purchase questionnaire, which can be useful to have when viewing properties, or to discuss how we can help you with your purchase, email firstname.lastname@example.org
For further information contact Sarah Bogard, Senior Solicitor & Chartered Tax Adviser on 01227 763939.