Guide to buying

All our properties, be it a new development or a re-sale of a property are selected for their location, investment potential, good value and accessibility.

French property investment

To start

Once you have chosen your property, agree prior to contract what is to be included and check that the boundaries of your land are correct. Do not sign a contract until it has been looked over by a legal adviser. Estate agents or notaires draw up the first contract (Compromis de Vente), usually in French. It is a legally binding agreement and you should be protected by a legally experienced French law expert. Surveys are not required in France, but if you are unsure of any aspect of a property it is better to put a survey in place rather than have problems later. You should ensure that you are legally protected should the results of the survey be negative.

The Notaire

Unlike solicitors in the UK, a notaire’s advice is more limited. He will affect the transfer of the property and ensure that any taxes to the state are paid. The vendor selects a notaire, but a purchaser can choose to use an independent notaire. He will investigate the planning information on the property and surrounding area as well as gain information on outstanding mortgages or charges on the property, to ensure undisputed ownership on completion.

The Contract

Contracts are prepared by a notaire or agent. It will include Conditions General (such as taking over the property as it is found on date of completion), Conditions Particulier (such as rubbish cleared prior to completion), and Conditions Suspensive. These could be a) reliant on the sale of your UK property b) obtaining a loan or mortgage c) confirm which ownership structure is suitable (to save on inheritance/French income tax) d) inconvenient easements (such as right of way on your land) or any other clauses relevant to you. Completion dates are agreed when the notaire writes to you regarding the final arrangements.

You will have to pay a 10% deposit to a special account held by the notaire. The balance must be in the notaire’s account for completion. You should allow at least 10 days for this. Also insurance must always be in place in time for completion, with a minimum of fire and public liability.

Once you have received a signed copy of the contract, you will have a 7 day ‘cooling off’ period. During this time you can withdraw from the sale by recorded delivery letter to the vendor. Once the 7 days have passed, you are in a binding contract that you can only withdraw from if any of the Conditions Suspensive are not in place. Completion takes about 3 months from the signing of the 1st contract. It is the Acte de Vente and it can be signed with power of attorney if you are outside of France.

Financing Your New Home

All French mortgages are ‘full status’, with a 10 day ‘cooling off’ period. They can be a fixed or variable rate and completion must be within 4 months of accepting the mortgage offer. There is normally a 1% charge for the lenders fee. Mortgage brokers are available for advice and finding a suitable mortgage for you. Some charge a fee so please check first.

Purchasing Costs

Notaire’s fees (including stamp duty) will be approx. 7% of the purchase price. Agent’s fees will be 5-10% of the purchase price. You should also add legal costs for local advice.

Local Taxes

There are 2 annual local taxes, the Tax d’Habitation and the Tax Foncieres. Both are due in October/November each year.

The local residence tax or Tax d’Habitation is payable by the occupier of the property. If you rent the property on a short let holiday basis the owner pays the tax. It will be on a pro rata basis if the property is uninhabitable for a period, ie: for renovation. The local land and property tax or Tax Foncieres is calculated on a theoretical rental value. This is always payable by the owner of the property. New or newly restored properties are normally exempt from this tax for the first 2 years.

There are also maintenance charges for apartments, or Charges de Co-Proprietaires. These will vary with the size of property and whether there are lifts, pool, tennis courts, gardens etc..

French Income Tax

If in the future you rent out your French home you will have to pay income tax on the profit – Impot sur le Revenu.

Resources

Also If you need more information about property investment, you can visit the section "investing in property" on http://www.direct.gov.uk/.

News

French Property Market Report

The decrease in house prices accelerated in the last quarter of 2008, and prices are forecast to continue to fall over the next three years

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