A GUIDE T0 BUYING PROPERTY IN FRANCE

Below is some basic information regarding the Buying Process, Legal Requirements, Fees, Mortgages, and Taxes, to consider when purchasing a property in France

When purchasing a property in France the procedure is very different to that in England. The buying process is divided into 2 stages. Initially there is the:

Preliminary Contract
 

This is also called the 'Compromis de Vente', and is prepared by a Public Notary (Notaire) or an Estate Agent Licensed in France. This is normally signed when you decide on a property you wish to go ahead and purchase.
This is a binding written agreement between the Vendor and the Purchaser, which does have a 7 day 'Coolong off Period' .
It is signed subject to Conditional Clauses know as the 'Clauses Suspensives'.
These Clauses state that the contract will only become binding if conditions can be met - for example, that the Buyer can obtain a mortgage within a stated time; the Notaire obtains a clear title to the property; that there are no covenants, easements etc that adversely affect the property

Also prior to the signing of this part of the contract the Vendor must supply certificates relative to inspections for Asbestos, Lead, Termites, Energy Performance, and Natural and Technological Risks. Thse inspections are carried out by fully registered and insured experts who are approved by their local 'prefecture' and are specifically designed to protect the Purchaser. The cost of these inspections is the responsibility of the Vendor

Secondly there is the

Formal Deed of Sale

This is also called the 'Acte de Vente' and must be prepared by and signed in front of a Notaire when the completion of the sale takes place, and this signing of the title deed proves who is the owner of the property and contains a detailed descrpition of the property itself.

Our Agency in France is owned by Charles Smallwood, a Chartered Surveyor from the UK, who with his Wife Jane, has been selling properties in France for the last 25 years. In the best interest of Clients they will always recommend the most suitable local Notaire to oversee the preparations of the Priliminary Contract. In addition they will accompany all Clients to the Notaire's office and assist in every aspect at the signing of both parts of the property transation. The signing of the two documents is normally about 8-10 weeks apart, or by a timespan agreed between the Vendor and the Purchaser

The full balance of the purchase price, the Notaire's fees and government taxes must be in the Notaire's account by the date of signing the 'Acte de Vente'

Who is the Notaire?

The Notaire is a public official who prepares the title deeds relating to the sale and purchase of land and/or property. They also note the publis record that the deed has been signed in their presence and is understood by all parties concerned. Notaires enjoy a very privileged and highly respected position in French Society.
Most frequently one Notaire deals with both parties in a transcation. This is legitimate and the normal way of operating in France

The Notaire will also make various title checks about the property and

• Ensure the property being sold matches the title deeds and registry documents
• Establish the identity of both parties (with Birth and Marriage/Divorce certificates)
• Ensure the seller is the rightful owner of the property being sold
• Ensure thee are no covenants, other than those already mentioned in the Preliminary Contract, which might adversely affect the property
• Search the Land Registry to establsh that there are no existing restrictions to the right of disposal of the property, such as easements or mortgages on the property
• Ensure that if the property is already mortgaged, the purchase price will be sufficient to redeem the mortgage completely
• Obtain a planning certificate showing the planning rules relevant to the property from the Town Hall

   

In Whose Name Should You Buy the Property?

There are a number of ways to purchase a property in France

• In your own name or in the joint names of you and your spouse or co-purchasers
• In the name of your adult children or in the name of someone who will eventually inherit the property from you
• In the name of a special type of French company called an SCI, which exist mainly to own and manage properties in France
• In the name of an ordinary limited company, whether English or French

   

Each method has it's own advantages and disadvantages, and depends on your own personal circumstances. Specialist advice may be essential

Loans and Mortgages

If the buyer intends to obtain a loan to buy the property, this must be stated at the very beginning of the sales process, and will be documented in the conditions. The contract can and will be cancelled if the loan cannot be obtained.
While the Notaire is drafting the title deeds etc the buyer will be arranging the finance for the purchase. Financing of the purchase can take several forms depending on the circumstances

• A first or second mortgage on your existing UK property
• A Euro Mortgage secured on the French property from a French Lender

Charles and Jane will be happy to offer independant advise to Clients regarding the best product to suit their requirements

Can I finalise the Transaction from the UK?

As part of the professional service offered, our Agents can take Power of Attorney from the Client and sign on their behalf in respect of the preliminary contract. Most Clients like to personally attend for the final signing of the 'Acte de Vente' but it is also possible for this to be signed through the Power of Attorney too

Prior to the final completion, the Notaire will have sent the Buyer a Completion Statement showing the full balance due, including the balance of the property and all other registration fees due for the purchase

Once both parties have signed the deed of sale, 'Acte de Vende', the Notaire will register the transfer (and details of any mortgage applicable) at the Land Registry (Conservation des Hypotheques). The Notaire will retain the original deed and the Buyer will receive a certified copy

Transfer of Funds to/from France

Funds can be transfered to and from France by Bank Telegraphic Transfer. This can be done via your own bank in the UK, or you can employ the reliable services of a Currency Dealer. We personally recommend HIFX plc who offer Clients foreign currency transfers across the world, at a very competitive rate. For a free quotation or to register for their service call  01753 859159  quoting the reference number 134393 or follow this link www.hifx.co.uk/banners/index.asp

How much are Fees and Taxes?

Existing Properties

The buyer of an existing property should expect to pay Notary Fees and Government Taxes of between 6% and 10% of the purchase price, on a sliding scale as below

Please note:

1. There is an additional legal charge when there is to be a mortgage on the property
2. The information above is for a guide only and the exact amount will determined by the Notaire at the time of the purchase

Off Plan or New Build Properties

When buying a property 'off plan' a contract called a 'Contrat de Reservation' will be drawn up and an initial reservation deposit of 4% or 5% will be payable. Payments are usually made at each stage of construction and the contract will specify the payment schedule. If the buyer is taking out a mortgage, the lender will make the stage payments confirming with the buyer before each one is made.

Prices on new off plan properties are not normally negotiable

1. The fees and taxes when buying a property off plan are between 2% and 3%.
2. If the property is sold in the first 5 years by the original purchaser, new the buyer would also pay approximately 2-3%
3. When purchasing a property over 5 years old the amount charged is between 6 and 10% as in the table above