Purchasing Property in France
Important elements to consider when buying your property in France.
There are a number of stages to the process of property purchase in France which differ significantly from other parts of Europe. It is important to be familiar with the process and legal requirements prior to starting your search.
1. Bons de visite
2. Offre d'achat
3. Sous-seing Privé or Compromis de Vente.
4. Acte authentique
5. Frais de notaire et commission d'agence
6. Taxes France.
BONS DE VISITE
On finding one or more property you are interesting in visiting the estate agent will ask you to sign a ‘Bon de Visit’. Essentially this is a legal document providing proof to the agent that they introduced you to the property. UK nationals who have bought properties in the UK, but not looked before in France may find this unusual, however, unlike in the UK a property in France may sometimes be on the market with more than one agent.
Offre d’achate (purchase offer):
On finding your ideal property make an offer. This is usually done through the estate agent. When offering on a property it is wise to include some terms on which to proceed, such as a time limit for reply, how you are intending to finance the purchase, etc. If the vendor doesn’t reply to an offer within the specified time limit, you offer automatically becomes null and void.
Sous-seing privé (private agreement drawn up by estate agent) or Compromis de Vente (drawn up by Notaire)
If your offer is accepted by the vendor an agreement is drawn up either via the estate agent or Notaire. This stipulates terms between both parties. On signing the agreement you will have to provide a deposit, usually 10% of the agreed purchase price.
Signing this document legally ensures sale and purchase should go ahead. If the vendor breaks the contract they are required to repay twice the sum deposited as means of compensation. If you break the contract you will lose your deposit. After signing you have a 7 day period in which to reconsider without losing your deposit.
As part of the agreement you can include terms on which you cannot proceed, without any loss of deposit.
• You are going to require a mortgage on the property. In the case of not being able to raise the capital from a lender, you will not be in a position to buy.
• You want a structural survey carried out
Other factors may have to be taken into consideration at this point. Ie. If you are intending to buy a property with farming land (more than 1 hectare) there may be an intervention by the Société d'Amenagément Foncier et d'Establissement Rural (SAFER) which has the automatic right of pre-emtion, in order to preserve land it feels should continue to be used for agricultural purposes.
If one or more of the above has a detrimental effect on the purchase it is possible to pull out of the agreement with full refund of moneys paid.
At this stage the property is withdrawn from market.
Acte de Vente
This is the final contract signed by both vendor and purchaser at the office of the Notaire. At this point the remaining balance needs to be paid to the Notaire, who then pays the vendor.
The period between signing the Compromis de Vente (or Sous-seing privé) is usually between 6-8 weeks, but can be longer at the agreement of both parties.
It should be noted the Notaire will require payment of the balance prior to signing the Acte de Vente.
Unlike the UK (or much of mainland Europe) the Notaire is not a solicitor or lawyer appointed to represent the interests of either the vendor or purchaser, but instead represents the French state. Their role is to ensure the transaction is carried out in exact accordance with French laws, including guaranteeing all correct taxes and fees are paid.
Given the Notaires’ function, it is possible for both parties to appoint the same Notaire, however if you would prefer for peace of mind to employ a different Notaire (for example one who speaks fluent English) the fee charged is the same as for one.
French succession law works differently to UK law. It is important to check on the complexities of this prior to completion.
Frais de Notaire et d'agence: (legal costs and commission)
The legal costs of a Notaire vary according to the type of property being purchased. For example the legal costs of purchasing farming land are different to a village house. The usual cost is around 8% of the agreed asking price and is strictly payable buy the buyer.
Estate agents include in their advertised price an element of commission. This is also payable buy the buyer, and if included on the Compromis de Vente it will be necessary to pay the Notaires legal fees on this element. It is possible to remove this from the Compromis de Vente by agreeing to pay the estate agency directly. This must be done prior to signing the private agreement.
Property Tax in France
There are two state taxes that apply to property: Taxe d'habitation and taxe foncière.
Taxe d'habitation: tax due by the "occupier" (owner or lodgers) of the property strictly on the 1st January. If you sign the Acte authentique 2nd Janury, you won’t have to pay this until 1st January of the coming year. This tax applies to the forthcoming year rather than the last year.
Taxe Foncière: tax payable by the owner whether they occupy the property or not. This starts from January 1st and applies for 12 months. If you purchase a property half way through a year, ie. 1st July, you will be eligible to pay 50% of the amount.