BUYING PROPERTY IN FRANCE

The Role of the Estate Agent

Although you can buy a property privately through a Notaire, most purchases are done through an Estate Agent, or immobilier. French Property Portal has links to established English speaking Estate Agents throughout the whole of France, and their aim is to make your project go as smoothly and quickly as possible. All are members of registered bodies such as FNAIM, SNPI or UNPI. It's a good idea to contact the Estate Agent directly with a list of your requirements and make the most of their professional and local knowledge of the purchase process of buying property in France.

After visiting a property, the Estate Agent may ask you to sign a "bon de visite", which confirms the fact that they have shown you the property, and in the event of a purchase, avoids any conflicts.

House sales in France become binding far earlier in the procedure than in the UK, and it is possible to secure the rights to purchase a property directly after your visit, although gazumping is uncommon.

Prices of the properties should always include the Estate Agent's fees (between 4% and 10% of the price) and will include the letters FAI to confirm this. Do check with the Agent whether there will be any additional fees, and remember that VAT will be added to these, at the rate of 20%.

Making an Offer

Although the initial asking price may be above your budget, many people may not realise that properties in some regions of France can be bought for up to 30% less than the asking price, so it's important to try and find out how long the property has been for sale, and any other relevant information that the estate agent can give you, and feel free to make an offer, as you would if buying in the UK! One of the reasons France is such an attractive place to buy is that the cost of buying a French house will get you a lot more for your money than in the UK!!

Once your offer has been accepted, and the Agent has helped you check out the "plan cadastral" (held at the local Mairie) to ensure that there are no pending private or communal planning permissions for work which affects your intended property, the Notaire will take over all the organisation and paperwork to ensure that the legal process of buying your French property goes smoothly .

Procedures

It is obligatory in France for the seller to produce surveys which detail the presence – or in some cases more importantly, absence – of the following

• Asbestos
• Lead
• Termites
• Energy Efficiency
• Natural or Industrial Risks
• Gas Installations
• Electrical Wiring
• Septic Tank
• Radon
• Swimming Pool Security

Structural surveys are not generally undertaken in France, however if you are concerned about potential structural problems then you can find an English speaking surveyor to help you with this, or if you are envisaging a lot of renovation work, it would make sense to contact an English speaking builder who could give you an idea of costings .

Role of the Notaire

In France all property sales go through a Notaire. As public officers they ensure the contract compliance is handled correctly and, in addition to confidentiality, guarantee the necessary legal certainty.

They prepare the documents beforehand thereby preventing the majority of subsequent disputes. There are over one hundred legal and tax points to which Notaires pay careful attention when drawing up the deed of sale.

For example, Notaires may :

• ask the parties to the contract for proof of their identities and marital status,
• check the seller's instrument of title, the property's mortgage status, agreed easements and applicable town planning regulations,
• expiry of pre-emption rights,
• check that the compulsory pre-sale surveys are performed before the preliminary contract is signed.

Their considerable legal knowledge and awareness of any amendments to legislation are the best legal guarantee when the preliminary contract is drawn up (before the deed of sale).

You will not therefore have any unpleasant surprises.

Once the instrument is signed, it becomes the subject of a major formality: land registration, which involves recording the legal status of the property at the land registry office. The aim is to keep a record of the rights of ownership over the building and the mortgages taken out on it. In their capacity as public officers, Notaires have the monopoly over access to this file. This is called the cadastre.

Finally, the Notaire guarantees the title deeds by keeping them for 75 years in their office. After 100 years they are archived in the national records and will soon be stored electronically.

Notaires also provide legal and tax advice on housing development, construction and renovation projects. Lastly, Notaires who manage property provide investors with all the necessary expertise to do so efficiently.

The Compromis de Vente (preliminary signing) and Clauses Suspensives (conditional clauses)

This is usually the first document you will sign, setting out the main terms agreed between Buyer and Seller. At this stage it is normal to pay a 10% deposit, which is held by the Notaire. It can be prepared either by the Estate Agent or the Notaire, it must be signed by both parties, and is a legally binding document. After this, the only options for cancelling the agreement are those set out in the conditional clauses (Clauses suspensives) so it is important that you understand very clearly what these clauses consist of and to make sure that all your needs are covered. Essential conditions i.e. that the sale can only be completed after a satisfactory mortgage is secured, the financial details and repayment terms of this mortgage, obtaining planning permission for any works you intend to do, or other points you think crucial to the finalising of the sale, and especially a clause to protect yourself from any planned development close to your intended property. It is vital to discuss these points in detail with the Estate Agent and the Notaire, and to make sure that all your protective clauses are in place, as everything is final after this!

Cooling Off Period

However, after signing the Compromis de Vente, as the buyer, you have a ten-day period in which you can withdraw from the purchase without incurring a penalty, but the seller cannot. After this period the contract becomes binding on both sides, so all your protective clauses must be in place and to your satisfaction before this.

Deposit

Obviously you will need to arrange the transfer of the 10% deposit (in euros) which will be held by the Notaire, and is non-refundable if you withdraw from the purchase, except in the case of a conditional clause listed in the Compromis. Visit EnglishSpoken.com for a list of English speaking currency providers.

Mortgages

You will need to supply details of how you are going to finance your purchase and as mentioned above, if you are buying your property with a mortgage, one of the most important clauses in the Compromis de Vente is that the sale can only be finalised upon the securing of this loan.

To secure a mortgage at the most advantageous interest rates, you can use a mortgage broker such as Private Rate, who specialise in helping expats secure financing for the cost of buying a French house.

For more information please read our mortgage guide.

Local Authority Searches

Once the Compromis is signed, the Notaire will begin the official and legal processes which include searches on the property including land registry rights to ownership, boundaries and rights of way.

In France these searches do not include any potential private planning permissions near your house. This is a question you must ask either the Estate Agent, or the Mairie, and which will be shown on the "Plan Communal" but if you have concerns, you can include a clause suspensive to the Compromis to the effect that if aggressive planning permission has been granted close to your house, you can withdraw from the contract.

The process of all the searches and preparation of the legal documents can take up to three or four months before the final signing takes place.

Tax, Legal Points and Costs

If you have questions about your fiscal situation, inheritance law, residency issues, income and capital gains tax or other issues in this category, please visit EnglishSpoken.com to find an English speaking legal advisor who specialises in French property law.

Costs may include the Notaire's fees (which include certain costs to do with the sale). These fees are set by the government and depend on the tax bracket of the property and are as follows:

€0-6,500 – 3.945%

€6,500 – €17,000 – 1.627%

€17,000 – €60,000 – 1.085%

€60,000+ – 0.814%

In total, the sum of fees involved in buying the house cannot exceed 10% of the property's value.

You'll also need to pay stamp duty when buying a house in France. Properties over five years old are charged at 5.8% (though a few are charged at 5.08%), while newer homes are charged at 0.7% plus 20% VAT. Some homes are sold TTC (toutes tax comprises) – meaning all taxes are included.

There are two taxes on residential property: land tax (taxe foncière) and local taxes (taxe d'habitation), which are due on 1 January every year, so you will pay a pro-rata amount.

Acte Authentique – The Final Signing – Acte de Vente

Your Notaire or the Estate Agent will notify you of the proposed date at which the final contract will be signed. It is advisable that you are present for the signing of this important document, but you can arrange a power of attorney if this is not possible. As this contract has a clause stating "sold as seen on the date of signing", it is crucial to organise a viewing of the property on the day of signing, to ensure that everything is in order! Changes can occur to buildings, especially those in more remote areas!

The balance of the payment will need to be organised to be available for transfer on the signing date, at which point all the outstanding balance, including all associated legal fees must be paid to the Notaire's account, and at which point you take legal possession of your house!

If you’re dreaming of moving to France or buying a second home, the French Property Portal has over 21,000 properties for sale throughout France with something for all budgets. Our dedicated team and myself can offer advice and help you plan for investing in France. Simply use our online chat feature or leave a message to schedule a call back. We look forward to hearing from you!