Buying Guides >> Property in Switzerland | Property in France
A guide to buying property in France
There are no restrictions on EU citizens buying
property in France and the process typically takes
3-4 months. The property purchase becomes binding
at a much earlier stage than in the UK.
The information below is an overview of the
considerations for buying property in France intended
for reference only. It is not legally binding.
Alpine Specialist is able to provide more detail
on the property purchase process and introduce
buyers to any French property advisors required.
Essential facts for buying property in France
Purchase process
To acquire property in France buyers must instruct
a French notary (Notaire) who will ensure all
legal formalities are dealt with and register
the property purchase. The appointed notary also
represents the property seller and oversees the
property sale and purchase. Buyers may also need
advice from a French tax advisor on French tax
implications and a French property lawyer on any
legal implications. Purchases become binding 7
days after both parties have signed and received
a copy of the compromis de vente, which sets out
the main terms of the agreement between the buyer
and the seller. The buyer can withdraw from the
sale at any time during the 7 day 'cooling-off'
period. The compromis de vente can contain clauses
suspensives which allows the buyer to withdraw
from the purchase under certain specified circumstances.
The seller can not withdraw from the property
sale.
Property type and location
Properties in ski resorts in France fall into
two main types: new builds and re-sales.
New build properties in French ski resorts are often sold as leaseback properties. Under this scheme the buyer purchases the property freehold and leases it back immediately to the developer for a defined number of years. The buyer is entitled to use the property during specified weeks each year, and receives a small rent. The buyer can also recover the VAT (or "TVA") on the purchase price, a saving of 19.6%. The only restriction on further sale of the property is that the new purchaser must accept the terms of the lease. The owner cannot amend the interior whilst the ski property is in the leaseback scheme and this is maintained by the developer.
Re-sale apartments are sold by private owners or estate agents. The buyer purchases the property freehold and is free to use, rent, renovate or sell the property.
Property deposit
The deposit amount required depends upon the type
of property that the buyer is purchasing. It is
usually 10% of the net purchase price and is payable
7 days after signing the compromis de vente. The
buyer loses the full amount of the deposit if
he later withdraws from the sale. The remainder
of the purchase price is payable on the signing
of the final contract.
Survey
The buyer is not legally required to carry out
a survey in France. It is compulsory for the seller
to provide the buyer with lead poisoning and asbestos
surveys, and he must also provide area measurements
according to the type of property and location.
Re-sale
There is no restriction on re-sale, though capital
gains tax and VAT may be payable.
Laws
French inheritance laws apply to all property
purchases in France even if the buyer/owner is
resident elsewhere. French inheritance law differs
greatly from UK law and it is essential to take
legal advice.
Taxes
VAT of 19.6% is payable on the purchase of a new
property being sold for the first time or re-sold
within the first 5 years, and is usually included
in the purchase price. Local property taxes (taxe
d'habitation and taxes foncières) based
on the size of the property are payable at a rate
set by the région, département and
commune.
Rental income must be declared in the country
of residency (so a UK resident must declare rental
income in the UK) each year. Credit may be claimed
for any French tax paid against any liability
in your own country.
Mortgages
Mortgage interest rates are reasonably low in
France. Typically, French banks will lend up to
80% of the purchase price over 20 years and at
an interest rate of around 4%.
Other purchase costs
Property purchase costs include notary fees, which
are usually between 2% and 3% of the purchase
price for a property that is under 5 years old
and subject to VAT. Properties over 5 years old
attract notary fees of between 6% and 7%. A purchase
tax is also payable when an individual buys a
plot of land to build a property for personal
use.
Buyers of an apartment in a co-owned building must also contribute to annual running costs of the whole building. Costs differ from property to property and are generally divided up between the owners in proportion to their apartment size. Payable yearly, half-yearly or quarter-yearly they cover outgoings such as administration and expenses, a caretaker, insurance, garden and pathway maintenance, utilities and building maintenance costs.