Buying Property in France

Once you have found your perfect French property, agreed your purchase price and Worldwide Lawyers has found your English-speaking French lawyer you are ready to move forward with the buying process.

In accordance with French law all property transactions must be overseen by a legal representative of the French Government called a notaire.

When an offer is accepted on a property in France, the estate agent or the notaire will draft an initial sales contract known as the Compromis de Vente. The Compromis de Vente is the agreement that the buyer will buy and the seller will sell the property and is binding on both parties.

Before signing this contract you should seek guidance from your English-speaking French lawyer (this should be a property lawyer separate to the notaire) in relation to your rights and responsibilities and to ensure that you are protected should anything happen that may affect your ability to complete the purchase after signing i.e. obtaining a mortgage or obtaining planning consent.

Usually a deposit of around 10% of the purchase price will be payable by the buyer when signing this contract. There is usually a 10 day “cooling off” period after signing the Compromis de Vente within which the buyer (but not the seller) can withdraw from the transaction without consequence.

Once the Compromis de Vente is signed, the notaire will check the property title, complete any searches relating to the property and will ensure that both parties are able to enter into the contact. When the notaire has everything they need, they will set a date for completion of the sale.

On the completion date both the buyer and the seller will usually attend the notaire’s office to sign the completion document, the Acte Authentique.  This is the conveyance document that transfers the legal ownership of the French property. You can either sign these French title deeds in person or arrange a Power of Attorney for someone else, usually your lawyer, to sign on your behalf.  If you do sign in person it is advisable to have your English speaking lawyer or a translator present in any case to translate and explain the contents of the deeds to you.

Should you require a Power of Attorney, your French lawyer should be able to prepare this for you. You can put the Power of Attorney into effect by signing this in France in in the presence of a French Notary, through the French consulates in the UK, or through a British Notary Public with a Hague Apostille.

At the completion meeting the notaire will usually go through the contract and explain the contents to both parties and provide the results of the various reports and searches on the property. This will be in French and the notaire may not agree to sign the deeds unless he is happy that either you speak French and understand the contents or your English-speaking French lawyer is present. The rest of the purchase price, tax, legal and agency fees, must be transferred into the notaire’s account by the signing date, so that these can be settled immediately after the signing. The notaire will present the deeds to the Land Registry for registration.

The property is now yours!

The next step is to enjoy your new property relaxed in the knowledge that your independent French lawyer has taken care of all legal formalities and your interests have been protected. Congratulations!

The additional costs of buying a property in France is usually around 15% of the property purchase price.

If you are buying through a French Property Company, a Société Civile Immobilière, you may also find that there are some additional fees.

The cost will include:

The property purchase price

As agreed between you and the vendor. You will need to check whether or not the purchase price includes the estate agents fee.

Estate Agents Fees

If the purchase price includes the estate agent fee, usually the seller will have to pay this out of the sale price to the agents. If it is not included in the sale price usually the buyer has the responsibility of paying this to the agent on top of the sale price. The fee can also be shared between buyer and seller by agreement.

Estate agent fees are usually charged as a percentage of the sale price. It is not uncommon for these to be up to 10% of the purchase price.  Sometimes notaires act as selling agents and advertise properties for sale. Their selling fee is often considerably less than an estate agent, typically 5-6%.

Tax

If you are buying an off-plan or a new property you will pay the purchase price plus 20% TVA unless buying from a private individual.

For “resale” or “second hand” properties you do not need to pay TVA but you will need to pay Stamp Duty of around 5% of the purchase price.

Legal Fees

Lawyers fees are usually charged as a percentage of the purchase price- typically 1-2% but can be less depending on the property and the firm.

There may be an additional cost if a Power of Attorney is required. Your lawyer will advise you of their fees for this.

Notaire Fees

The charges are fixed by law on a sliding scale and usually work out to around 2-3% of the purchase price once you include TVA (VAT). The higher the property price the lower the percentage charged.

The notaire’s invoice may include the Stamp Duty and/or Land Registry fees so you should ensure that you understand what has and what has not been included.

Land Registry Fees

This is usually between 0.5%-1% of the property value.

Loan/Mortgage fee

If you require a mortgage, a fee of around 1% of the loan value is charged. This may also increase the notaire’s fees (typically an extra 0.5%-1% of the loan amount) as the loan will need to be registered for the lender.

It is often suggested that it is not necessary for the buyer to have his or her own lawyer in a French Property purchase because the notaire deals with the transaction. The notaire however acts on behalf of the French Government and not on your behalf as the buyer. The notaire will not verify everything you need to know about the property or advise you specifically.

It is therefore imperative that you instruct your own English-speaking French property lawyer who is experienced in dealing with French property purchases to advise you throughout the transaction, make any pre-contract enquiries on your behalf and to ensure that your interests are properly protected. This is especially important if you are buying with a more complex contract such as leaseback or if you are buying an off-plan or new build property.

Another major factor to consider when buying a French property is that French inheritance law and tax is entirely different to in the UK. An experienced French solicitor will understand and advise you as to family issues relating to you as a British buyer in France.  They can advise as to the different options regarding the legal ownership of the property, assist with drafting a French will, matrimonial transfers and gifting a property. Using a French property solicitor during your property purchase for a comparatively small fee, can give you reassurance and save you time, money and hassle in the future when your property is passed on or sold.

You should protect yourself by instructing a French property lawyer as soon as possible and before any formal steps have been taken to purchase a French property or before any mortgage has been formalised. This will allow your lawyer to advise you properly on all aspects of the transaction to ensure your position is fully protected.

Contact us on 01244 470339 for free help to find an independent English-speaking French property lawyer to assist you with buying a property in France.