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euro-rentavilla.com has now been in operation over 15 Years

euro-rentavilla.com Guide to buying a property - France

See Also: Mandatory Property Surveys

The Property has been found - you have all the information - Surface area, total of taxes on the land and property and administrative charges you have to pay. The selling agent should clarify everything for you to avoid unexpected problems.

Offre d'achat: is the offer to buy. If you are wanting to make a reduction in the asking price from the seller (vendor) the Estate Agent can help you make a written purchase offer. This offer has to state the day uou visited the property, the price that you are offering and state a time limi that you want the seller to respond in.

The offer will not include the deposit payment. Provided the offer is accepted the Estate Agent will arrange an appointment for both parties to meet to sign the initial contract - Compris de Vente

 

 

Compris de Vente: is the initial contract that binding by both parties. It agrees for one to sell and the other to buy and time limits for either party to change their mind. Once this has been digned then neither can pull out except under a clause that the buyer cannot get a mortgage on the property. The contract will state any town planning requirements, mortgages on the property and will require the complete discharge of debts by the Freeholder.

A deposit that is usually equillant to 10 per cent of the purchase price is then paid by the purchaser to the Estate Agent. This will be placed in a separate account until the date is agreed for in the contract (compris) for the signature on the act of sale before a Notary (lawyer).   

Acte Authentique: The purchase is finalised by a "Notarial act of sale" (Acte Authentique) that is signed in front of the Notary of the purchaser and also sometimes in front of the seller's Notary. The Notary's fees are entirely the responsibilty of the purchaser. These include his / her fees, registration charges and any other disbursements. The total can often be more than 7 percent of the selling price.

The transfer of the property is then completed.Organising a buying visit inspection? Click here

Gas checks:

Since 1st November 2007 all properties offered for sale in France with natural - mains gas services installed more than 15 years ago must include a Diagnostic Gaz in the Dossier de Diagnostic Technique (This is rather like the HIP - Home information pack in England and Wales). It costs around  100 -  150 for the test that includes supply pipes, boiler, water heater and radiators. The certificate will be valid for three years and the seller has to organise and pay for this before a compris de vente can be signed.

There are also new rules for surveys from November 2007 all the technicans carrying out these tests must be accredited by COFRAC Comité d’accreditation français (Similar to Corgi in the UK). The new rules could effect around 10 million properties when they go on the sales market. If a property has bottled - cylinder gas (like calor gas) this is not covered by the new test.

Buying or selling info in France - If you need to check out what property has sold for in France then you need to visit www.immoprix.com . The data is provided by Notaires. You'll find prices and indices for each type of property (house, apartment, land) based on its geographical location (region, department, municipality, district, neighbourhood).

FACT File - Property Taxes in France

So you are about to purchase that ideal property - If you require finance or don't you still have to take into account the payment of property taxes. In France the tax system is centralised, however the location of the property will ultimately determine how much you pay.

First of all you have to pay the"notaire's" fee. Most of this in fact goes to the government like Stamp Duty in the UK. This will work out around 6% to 8% of the purchase price. There is also a small land registry tax to pay.

The property sale is now complete. You have the"Taxe D'Habitation" which is a local tax. The amount you will pay is determined from the cadastral value of the property. This is based on the size and location -not market value. It is generally thought to be reasonable particularly in rural areas. It should be noted that if you let your property as a holiday let and go there a few times a year you still pay the"Taxe D'Habitation", but in many areas you will also have to collect a"Taxe de Séjour" from your "paying guests". The authorities see it as you are making money from renting out the property then so you should pay them some revenue as well. This might only be a few cents per person per day, but it still has to be paid and it will depend on your local town hall.

The "Taxe foncière" is also paid annually. This generally quite low. There is also a wealth tax "Impot de solidarité sur la fortune" that is paid by owners of property worth in excess of €732,000.

Inheritance tax:"Impot sur les successions" this usually has to be paid when the owner dies or one of them.

You are also expected to pay tax on any rental income and although France has tax treaties with many countries including the UK it is worthwhile employing an accountant to help you manoeuvre through the French tax minefield.

Holiday rental income is subject to VAT at 19.6 per cent. For furnished lettings up to an annual value of €76,000 there is a 72 per cent rate deduction in respect of expenses under the 'Micro-Bic' regime. The remaining 25% net profit is taxed at 25%. If the investor has assets with a value in excess of €720,000 the owner will be subject to an annual wealth tax of between 0.55 per cent and 1.8 per cent. If you dispose of your property after less than two years you will be subject to income tax at 16 per cent and after that up to 47 per cent. See also:French Property Tax Deadline May 09

FNAIM -Fédération Nationale de l'Immobilier - France

FNAIM is the 1st professional organisation of estate agents.Set up in 1946, FNAIM (French national real estate federation) is recognisable by the famous Yellow Cube logo, it brings together, over 11,000 real estate agencies. In becoming FNAIM members, professionals undertake to abide by the quality charter developed by the Federation. The charter underlines the ethics, integrity and professionalism required of all FNAIM members.

As a professional trade association, FNAIM is concerned with representing and defending the interests of real estate professionals and their clients, the consumers. Its mission has encouraged it to maintain privileged ties with public authorities and to participate actively in the preparation of statutory and regulatory provisions for all topics likely to have decisive implications for exercising a real estate profession, in particular, and the housing policy, in general.

With a number of analytical tools at its disposal, FNAIM is unquestionably a leading reference in the provision of information and economic studies on the real estate market. Every quarter, it puts out business updates presenting the position of old housing on the property transaction market and once a year, that of the income-producing real estate market. It also publishes studies on the real estate industry and statistics worth knowing. FNAIM can thus focus its lobbying action on viewpoints based on fact and supported by reliable economic data.

FNAIM is also backed by a Legal Department that keeps an on-going legislative and regulatory watch on the industry and allows the Federation to be a source of analyses and proposals in its dealings at Parliament level. It also meets the needs of members by being available for consultation by telephone or post.

New Mandatory Property Surveys

Diagnostic de Performance Energétique - DPE (Energy Performance Survey): From the 1st July 2007, these are mandatory for all sales. This survey is provided purely for information purposes (like in England and Wales, Scotland, Northern Ireland and The Republic of Ireland) and covers levels of energy consumption and greenhouse gas emissions. Properties are rated from A to G (A represents optimal performance) and the survey is valid for 10 years. It also includes recommendations for improving energy consumption Article L134.L of the Building and Housing Code. If you are letting out your property remember The DPE - Diagnostic de Performance Énergétique should accompany any new or renewed lease agreement for a lease period of longer than four months. It is the responsibility of the property owner to have a building examined and to make any obligatory improvements.

CREP -Risque d'Exposition au Plomb - Lead Survey: This has been mandatory since July 1998 for properties built before the 1st January 1949. The lead survey is valid for one year only. If the survey is not provided a vendor can be liable to criminal action if let is detected under Article L1334-5 and 1334-8 of the Public Health Code. If you are letting out your property remember As of 12 August 2008, landlords of property built before 1 January 1949 must attach a CREP (Risque d'Exposition au Plomb) report detailing the risk of exposure to lead poisoning within the building. This CREP must accompany any new or renewed lease agreement.

Carrez Law: For the sale of an apartment all relevant documents must include a reference to the exact surface area in a property, if not the buyer is entitled to have the sale annulled up to one month after signature. If the surface area proves to be smaller than the stated amount, the new owner has one year in which to obtain the a reduction in the purchase price. If the the surface area has been underestimated, the vendor (seller) has no recourse against the buyer (Law 96-1107 of 1th December 1996

Natural Gas Installations -installations de gaz : From the ist November 2007 it has been mandatory to carry out a survey on the state of any gas installations that are over 15 years old. The survey has to be carried out by an ISO 17024 certified surveyor and is valid for one year only. It covers the gas pipes and ventilation / combustion systems. Comes under Article L134-6 of the Building and Housing Code.

Asbestos Survey - amiante: An asbestos survey must be included in the sales agreement for any property built before the 1st July 1997.The survey has to be carried out by an ISO 17024 certified surveyor and samples are then analysed by an approved laboratory - COFRAC

Electrical Wiring: A report on the condition of the electricity supply in the property, where the wiring is over 15 years old. This requirement is a recent (2008) change in the law, and is scheduled to become operational on 1st January 2009. A survey is valid for three years. No survey is necessary where a certificat de conformité can be produced as evidence that the property complies with the regulations, provided the certificate is less than three years old.

Natural and man made risks report - un plan de prévention des risques naturels: A report on the existence of natural risks that include flooding, earthquakes etc or a man made risk like transportation of hazardous substances or the nuclear industry is required for an property located in a high risk area. High risk areaa are defined by the Prefecct L.125-5 of the Environment Code and the reports are valid for six months.

Termite Survey - etat des risques parasitaires: This survey must be included in the deed of sale for properties located in contaminated areas as defined by the Prefect. A surevey is valid for 3 months only.

Property Surveys that are likely to be introduced in France

Septic tanks Survey - Fosses septiques: A report on the condition of a septic tank, for those properties which do not have mains drainage.The government keeps moving back the date when this survey requirement is scheduled to come into operation. The date now being suggested is 2013.

Property Insurance in France - Home and Household property insurance in France

Called a contrat assurance multirisques habitation or assurance multirisques vie privée or la multirisque.

The insurance should cover the cost of repairs or rebuilding including permanent fixtures and fittings within the property, such as fitted kitchens and bathrooms due to damage caused by : natural disasters, floods, fire, storms, burst pipes, explosions, lightning and theft. It should also give you civil liability insurance (responsabilitée civile propriétaire).

When calculating the value of your home, you need to take into account the cost of rebuilding it and the sum insured should be sufficient to rebuild all buildings as well as all outdoor structures such as swimming pools, terracing or perimeter walls. The rebuild value should take into account also the as removal of debris, architectural and other professional services. This value (like in the UK) is often quite different to the market price of the property and the price of the land should be excluded. Insurers do not have to be based in France and as such an Insurance company broker based in the UK with a policy written in English can be beneficial. Click Here for further information.

Written notice to cancel a French insurance policy

If you use a French insurance company under the Codes des Assurances, it is necessary to give a minimum of 2 months written notice prior to the Annual Renewal date to avoid having to automatically continue with the insurance for the following year. You will not normally have this rule if you use a company that is based in the UK for example, but it is important to check this fact out, particularly if you are looking for an alternative provider.

Holiday Homes

The owner of a self catering holiday property that is rented out as holiday accommodation must make sure that the insurers are aware it is let for holidays. You should check that there is adequate public liability cover as a landlord.

If the property is a holiday home insurers must be advised of the periods of non-occupancy. If for example you need to keep the electricity on during periods of non occupancy for heating, alarms, garden irrigation etc, you should let the insurance provider know.

N.B. The above information is given in good faith by jml Property Services and the website it is being displayed on. It should not be relied on for accuracy and property owners should consult tax experts / accountants in the country their property is in and also their home country. ©jml property Services ©jml property Services 07-05 / 01-09 /12-09

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