A few tips before buying property in France

The Euromortgage Shop,  Sunday, 13 August 2017

Watercolor painting of the Montmartre 

To avoid frustration and disappointment, it's important to understand the different stages in the purchasing process: the budget, timetable, legal procedures and issues related to tax...
The following post explain what you need to know before buying property in France.

Choosing the right property

1- Decide the type of property you're looking for : Existing or new? Flat or house? With or without renovation work? In a town or in the country? Near the sea or close to the mountains?
2- Study the market: Contact estate agents. Consult specialised websites and magazines. Talk to local residents.
3- Narrow down your choice: Decide your price range. Choose the region(s) where you'd like to find your property. Defineyour key criteria. Which of them are essential or of secondary importance?
4- But don't forget the golden rule: Position and accessibility must be the decisive factor in the choice of your future property.

Purchasing... in a nutshell

Always two stages in the buying process
Whether you decide to buy a house or a flat, an existing property or one still in the planning stage, the property purchasing process is divided into two stages in France:
First of all, you are asked to sign a preliminary contract known as a compromis or promesse de vente for existing properties, or a contrat de reservation, or reservation contract, for new properties still under construction.
You will then sign the acte authentique de vente, a deed of sale that is always drawn up by a notaire the “notary”: or public official responsible for completing the property conveyance formalities in France. You can expect two or three months to elapse between the signature of the preliminary and final contracts. You are usually required to be present at both these stages in the purchasing process; it is possible, however, to give power of attorney to another person if you are unable to attend. Ask your notaire for further details!

What are your rights?

Seek expert advice regarding tax and inheritance laws.
What you should bear in mind: French laws apply to all property situated in France. You are subject to laws that may be very different from those applicable in your country, notably as far as inheritance laws are concerned.
Take legal advice about the form of your acquisition in order to protect your investment.
A simple principle: French inheritance laws are based on the Napoleonic civil code and, as such, continue to favour blood ties over emotional bonds. If you fail to take the appropriate measures, the surviving spouse will find him/herself at a disadvantage compared with the descendants (children) and ascendants (parents, grandparents) of the deceased spouse, although a recent law tends to offer greater rights to the surviving husband or wife.

Focus on: How much will it cost?

BEFORE BUYING THE PROPERTY:
Expenses related to looking for the property: travelling to France, local living expenses. When you sign the preliminary contract, you will be asked to pay a deposit, usually 10% of the purchase price for existing properties but no more than 5% for properties purchased from plan. Remember to leave enough cash on your account or transfer the funds, if necessary!

BUYING THE PROPERTY:
The purchase price: expressed in euro, this price usually includes the estate agent's commission or the notaire's negotiation fees, in addition to VAT (at 19.6%) in the case of new property.
Conveyance fees : commonly known as frais de notaire (notary fees), the conveyance fees in fact cover the notaire's remuneration as well as all the expenses related to the formalities completed by the notaire on behalf of his client (urban planning certificate, verification of prior mortgages, etc.), stamp duty and tax. In practice, it's the purchaser who pays the conveyance fees that add 7- 13% to the price of existing properties, and 2 – 3% to the price of new property. Remember that these fees cannot be included in the mortgage package!

AFTER BUYING THE PROPERTY:
Removals and moving in expenses: removal expenses, cost of renovation work, contracts with the different utilities (electricity, gas, etc.), compliance with various norms, etc.
Expenses related to using the property : Taxes :
- Taxe foncière (land tax): this tax must be paid by the person who owns the property on January 1st of the fiscal year. Owners of new properties enjoy exemption for the first two years.
- Taxe d'habitation (local rates): this tax covers local services and must be paid by the person(s) occupying the property (owner, tenant, etc.) on January 1st of the fiscal year.

RUNNING EXPENSES :
Gas, electricity, water, telephone, Internet access, etc.


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