France with Paris, the city of love, has become the symbol of romance and pleasure for people from all over the world and it has been an important goal for the purchase of real estate. In areas of the German-French border the prices for residential real estate are often much cheaper than in Germany. So purchase of property in France is worth this season. Almost all the villages were “bought on the journey” by foreigners. The demand from abroad makes some prices rise – for the French people living there it is not the case for joy, of course. French holiday property by the sea is much more expensive than anywhere else, but it is considered to be exclusive. If you go further to France then it is possible to find some real estate that is almost free – there is also the loneliness of derelict land. You can be also offered excellent real estate at a favorable price. It is worth paying attention to the cost of repairs and maintenance. There are no restrictions for EU citizens here.
Buying property in France needs some information. The law in France differs in important respects from the law of different countries, particularly the property buyers in France should be careful in order not to get into legal pitfalls.
Those who are interested in buying vacation property in France first should know that there is a very well-developed consumer law here. Particularly it refers to the real estate purchase. A preliminary contract before a notary certification is a usual thing. In most cases “compromis de vente” (a binding mutual promise, a contract for the purchase and sale of real estate) concluded. In this framework it is usually a down payment of 10% of the purchase price agreed the seller is entitled to if the buyer changes his mind and give us the notarial certification. However, the buyer possesses the 7 day right of recession in which the compliance deadline is essential. Otherwise, the contract is already virtually closed with the intention of purchasing. When the contract is let, let give the seller the notice of penalty pledges in case he sells the property to others or refuses to sell it despite these reservations.
When concluding a “promesse” they usually discuss the suspensive conditions (“conditions suspensives”). Here the exact formulation of the conditions suspensives is very important as a suspensive condition should not be met. If it occurs in the preliminary sale than the sale cannot be performed. This can include conditions such as the issuing of a building permit or the condition of a financing agreement.
Only in the second step, after all suspensive conditions of a “promesse” are met, the purchase of property is verified by a French notary. The main task of a notary is to verify that all the regulations are met and whether the property with mortgages or other dept burden. The ownership of the property goes with payment of the purchase price without basic entry to the land records. Nevertheless, the entry into the land records is the very important reason because the registration ensures that the property is not sold or otherwise charged.
As for the income taxes, then you should pay nearly 4.9 percent of total. In addition, about 3 percent conclude notary and land costs. For land and completed properties in less that 5 years are also around 20 percent value-added tax to be paid. Also in France the successor to the real estate taxes are acquiring to note that the land tax (taxe foncière) should be paid by the owner at 1.1 of each year.
Buying the real estate in France you should remember that it is not easy to deal with other countries’ banks. The French mortage banks work under obligatory instructions of granting of the credit for financing the construction. In France you do not need to pay the credit in advance if your plans changed and you want to sell your property you bought some time ago.
Questions about real estate financing in France can be answered by our partner company Le Catalan in the south of France. Here you will also get help in buying property in France. Otherwise: in France there is the so-called “Real Estate Agent”. It is a state-approved broker with the prescribed training that should have the liability insurance and guaranteed sum deposited. Brokers is France are a highly professional group with strictly regulated trainging. Even French notaries (notaires) intercede with objects. Another feature is the land dealers (“marchand de biens”) who can work as a broker without the authorization to work. They usually buy the object and then re-sell it from their own name. The fee for brokers in France is approximately 5-8% but it is not legally established, so that it is a matter of negotiation. The broker’s fee is usually paid by the buyer, as a rule.
Important differences exist even in succession. In the French succession law the turn of successors begins with the spouse. The French successive law is still valid for the property owners with a foreign passport.
However, property sales in France should be discussed in details in any case.