Once you have selected the property you wish to purchase, may we suggest it is imperative you give careful thought to the buying process.
Knight Frank strongly recommends you take independent tax, legal, financial and other appropriate advice to ensure both your new asset is structured in the optimum way and also the purchase process in as smooth as possible.
It is the requirement of French law that conveyance of land and property is undertaken by a Notaire. The Notaire is the focal point of the legal transaction and is an officer of the French state.
In the event a buyer or seller wishes a legal professional to act exclusively for him/herself then the French system accommodates this in one of two ways. Either a solicitor can be appointed to liaise with the Notaire, or a second Notaire is appointed, thereby facilitating permitting one Notaire to act for the buyer and one for the seller.
Before instructing a legal adviser/Notaire, it is important to consider their relevant experience of the local market, appropriate language skills and costs.
If purchasing an existing property you will normally sign a Compromis de Vente, which will have been drawn up by the Notaire. The Compromis de Vente is essentially the Sales Contract and typically will have attached / included:
• Asbestos, lead termites and energy reports
• Conditions precedent, known as Clauses Suspensives
• Property boundary plan (Cadastral Plan)
• Details of any mortgage you are using
Once approved the Compromis de Vente is then signed and the buyer pays the deposit (typically 10% of the agreed purchase price).
A specific feature of French law is that once the buyer and seller have signed the Compromis de Vente the buyer (not the seller) has a 7 day cooling-off period in which to change their mind and withdraw without penalty of losing their deposit.
New Build Property
If you are buying a new property you will be required to sign a different form of contract called a “Contrat de Reservation”, which will also have “Clauses Suspensives”.
Usually stage payments are required to be made as works progress. There are different tax implications when you buy new build property.
Like many other jurisdictions property acquisition can be made with the asset being used as security to obtain a loan.
Knight Frank Finance offer excellent and in some cases exclusive finance deals to buyers. Please ask us for more information.
Acte de Vente
Once the 7 day cooling-off period has elapsed (the deposit is then non-refundable) and all “Clauses Suspensive” have been fulfilled, usually all the parties involved in the transaction present themselves before the Notaire to sign the “Acte de Vente”. The Notaire will be able to complete once he has received cleared funds in Euros including his fees.
Taxation, Inheritance and Structuring
It is essential that you take independent professional advice.
French tax need to be interpreted for your personal situation particularly in relation to Capital Gains Tax, Wealth Tax and Inheritance Tax. Equally, whether you choose to buy in a particular structure e.g. SCI (Societe Civile Immobiliere), your own name or your childrens’ names etc. must be aired formally.
None of the information contained in this Buyer’s Guide represents formal advice and should not be relied upon in any way. You are strongly recommended to take your own independent advice on all aspects of the purchase process.