Purchase Costs of Buying Property in France

Newly built properties and those bought again within 5 years of construction, are charged a reduced notaire's fees of 3 % of the purchase price.

All other properties/plots of land, the buyer has to add on average 7 % notaire's fees to the purchase price.

There is land tax to be paid each year, this depends on the size of the house/land as a very rough guide (for every 100.000 euros of house cost, you would expect to pay 200 euros per year).

Capital Gains Tax is 16 % on the gain for an Irish/UK resident. You can deduct all invoices for work done by builders. There is no capital gains tax payable on sale of a primary residence.

The purchase procedure for buying a property in France will differ depending on if it is a new off-plan or a resale property in France.

Buying Off Plan Property in France

Step 1 - "Contrat de reservation" - Signing of reservation contract

Normally a 5% deposit is paid at this stage, the contract needs to be signed and returned to the developer or agent.

The developer or agent will then sign and return this to you. You now enter a cooling off period of 7 days. If you need to arrange a mortgage you will have 2-3 months to do so. You need to send confirmation that you have applied for a mortgage to the developer or agent. Once you receive the letter of approval for the mortgage you also need to send this to the developer or agent.

Any contract should have a "clause suspensive" in it which lets you cancel the contract if you cannot get the level of finance you require from a bank. When the notaire receives a confirmation letter of your mortgage approval of mortgage they will prepare the deed of sale and send it to you.

Step 2 - "Acte de Vente" - Signing the Deed of Sale

To sign the deed of sale you must either make an appointment with your Notaire or sign a proxy giving the Notaire authority to sign on your behalf. At this stage you will normally have to make your first stage payment, . Transfer of ownership will be given to you upon signing the deed of sale. Durinig the period of construction you will have a series of stage payments. A schedule of work, certified by the surveyor will be completed. When each stage of work is completed you will receive a letter from the developer requesting the next stage payment. When construction is completed and you have made all your stage payments you will receive the keys to your property in France.

Purchasing a Resale Property in France

Step 1 - "Compromise de vente" – The First contract

The first contract that the purchaser and vendor will both sign, and this is a legally binding document. In France there is a two contract purchasing procedure. The first contract secures the price of the property once both parties have signed, and ties both parties to the agreement made while searches and ancillary matters are carried out.

It normally takes about three months for the Notaire to finalise all matters. A provisional completion date will usually be stated in the first contract and if the buyer does not meet this date the vendor maybe free to withdraw from the proposed sale and retain any deposit paid.

It is essential to keep on top of any issues that need sorting out so the proposed completion date can be met. You will have to provide several pieces of personal information such as birth certificates, marriage certificate, divorce or death certificates, your passports, together with any information on financing the purchase for the compromis to be compiled.

Lead, asbestos and termite reports: These reports are required by French law. It is the vendor's responsibility to obtain and pay for them where required under the terms of the contract. A compromis should not be signed unless it is accompanied by these reports which, of course, will be in French. If there are any problems with the property which are brought to light in the reports it is essential to negotiate with the vendor as to who will be responsible for the remedial work.

It is crucial that you will know when any works be done, at whose cost, and to ensure that any such agreement is contained in an amendment to the compromis. Something missed at this stage could prove very costly later.

The cooling-off period: Once both parties have signed the compromis it will usually be sent to your home address by recorded delivery. Buyers have a seven day cooling off period from the date they receive the compromis.

This is the time that should be used for obtaining a survey if you wish to and for negotiating with the vendor if there are problems with the lead, termite and asbestos reports. After this point the contract is binding on both parties. Your lawyer should advise you on what to do during this period and how matters proceed at the end of it. It is normal for the 10% deposit to be sent to the Notaire when the 7 day cooling off period has passed or this may be requested as soon as the compromis is prepared. If you need a survey done on the property you will need to act very quickly to ensure that this can be done during the 7 day cooling off period.

Searches: All property in France is registered and it is the work of the Notaire to obtain all the reports needed in connection with the purchase. He or she will conduct searches on the ownership of the property, the land boundaries and the rights of way as well as checking that any required planning permissions are in place for work carried out. It can be a slow process and patience will be required.

Insurance: If you do not have your property in France Insured, you are committing a criminal offence!

Power of attorney: As you get close to completion you will have to decide if it is possible for you to return to France to sign the final contract in the Notaires office, or whether you need to sign by power of attorney. This will give someone in France (probably the clerk in the Notaire's office) the right to sign the contract on your behalf. As the final contract will declare that you are accepting ownership of the property in whatever state it is in on the day of signing, it is essential to have the property checked before you sign.

Step 2 Deed of Sale - "Acte de Vente"

Before attending the final signing you will need to check over the property and the contract. It is likely that the contract will arrive with you close to signing date and it will be in French. You may have to arrange for a translator to be at the signing to assist you. At the end of the signing process you will be handed an attestation of ownership by the Notaire while the deeds will be sent away to be registered.

You will need to remember to chase for the return of these about 6 months after signing

This information is intended only as a guide and independent legal advice should be taken before signing or entering into any purchase contract.